Mutual Recognition of Pharmaceutical Good Manufacturing Practice Inspection Reports, Medical Device Quality System Audit Reports, and Certain Medical Device Product Evaluation Reports Between the United States and the European Community

[Federal Register Volume 63, Number 215 (Friday, November 6, 1998)]

[Rules and Regulations]

[Pages 60122-60164]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 98-29609]

[[Page 60121]]

_______________________________________________________________________

Part IV

Department of Health and Human Services

_______________________________________________________________________

Food and Drug Administration

_______________________________________________________________________

21 CFR Part 26

Mutual Recognition of Pharmaceutical Good Manufacturing Practice

Inspection Reports, Medical Device Quality System Audit Reports, and

Certain Medical Device Product Evaluation Reports Between the United

States and the European Community; Final Rule

Memorandum of Understanding Between the Food and Drug Administration

and the Office of the United States Trade Representative; Notice

Federal Register / Vol. 63, No. 215 / Friday, November 6, 1998 /

Rules and Regulations

[[Page 60122]]

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 26

[Docket No. 98N-0185]

RIN 0910-ZA11

Mutual Recognition of Pharmaceutical Good Manufacturing Practice

Inspection Reports, Medical Device Quality System Audit Reports, and

Certain Medical Device Product Evaluation Reports Between the United

States and the European Community

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule.

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

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

regulations pursuant to an international agreement between the United

States and the European Community (EC). The agreement is entitled

``Agreement on Mutual Recognition Between the United States of America

and the European Community'' (MRA). Under the terms of that agreement,

the importing country authority may normally endorse good manufacturing

practice (GMP) inspection reports for pharmaceuticals provided by the

exporting authority determined by the importing authority to have an

equivalent regulatory system. Likewise, the importing country authority

may normally endorse medical device quality system evaluation reports

and certain medical device product evaluation reports provided by

conformity assessment bodies (CAB's) determined by the importing

country authority to have equivalent assessment procedures. FDA is

taking this action to enhance its ability to ensure the safety and

effectiveness of pharmaceuticals and medical devices through more

efficient and effective utilization of its regulatory resources. The

proposed rule which published in the Federal Register on April 10, 1998

(63 FR 17744), carried an incorrect docket number in its heading. This

final rule carries the correct docket number.

DATES: This regulation is effective on December 7, 1998. The Director

of the Office of the Federal Register approves the incorporation by

reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51 of a

certain publication listed in new Sec. 26.60(b), effective December 7,

1998. Written comments and information relevant to implementation of

the MRA and this regulation may be submitted at anytime.

ADDRESSES: Submit written comments and information relevant to

implementation of the MRA and this regulation to the Dockets Management

Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm.

1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Merton V. Smith, Office of

International Affairs (HFG-1), Office of External Affairs, Food and

Drug Administration, 5600 Fishers Lane, Rockville, MD 20857, 301-827-

0910, or E-mail: ``MS[email protected]''.

SUPPLEMENTARY INFORMATION:

I. Background

On June 20, 1997, the United States and the EC concluded an

agreement on the MRA. The MRA includes two sectoral annexes covering

products regulated by FDA. The sectoral annex on medical devices covers

medical device quality system-related inspection reports and certain

product evaluation reports. The sectoral annex for pharmaceutical GMP's

covers pharmaceutical GMP inspection reports. The MRA also includes

sectoral annexes covering products regulated by other U.S. regulatory

agencies, including telecommunication equipment, electromagnetic

compatibility, electrical safety, and recreational craft. Finally, the

MRA includes a ``framework'' agreement that contains general

provisions.

At the conclusion of negotiations, the United States and the EC

submitted the text of the MRA to their respective authorities to

complete the necessary procedures for approval and implementation. For

FDA, these procedures included publishing a proposed rule that was

published in the Federal Register of April 10, 1998 (63 FR 17744). The

proposed rule was based on the provisions contained in the two FDA

sectoral annexes and the ``framework'' agreement of the MRA concluded

on June 20, 1997. FDA received comments from 14 persons in response to

this proposed rule. Many of these comments supported the proposed rule.

Some comments raised significant issues but none that, in FDA's view,

necessitated any substantive changes to the proposed rule. On May 14,

1998, FDA informed the Office of the U.S. Trade Representative (USTR)

that it supported the signing of the MRA. The MRA was signed in London

on May 18, 1998. Provisions of the MRA are between the United States

and EC, and do not create rights in third parties.

II. Summary of Comments

A. General Comments and Issues

Most comments by industry associations and pharmaceutical and

medical device manufacturers generally were supportive of the MRA and

the proposed rule. Some comments by others expressed concern about

possible diminished public health and safety if certain precautions are

not taken.

1. Five comments strongly supported the MRA and the proposed rule,

citing its potential to improve patient access to safe and effective

technologies, reduce unnecessary regulatory redundancies, enhance the

access of United States and EC companies to each other's markets,

provide significant savings to both companies and regulators, and set

the stage for further regulatory cooperation and harmonization. They

indicated that the proposed rule and the MRA allow for incorporation of

the best regulatory attributes.

FDA agrees with these comments. FDA takes the view that equivalence

of GMP reports and other conformity assessment reports and evaluations

between the FDA and EC Member State authorities and CAB's can be relied

on to help ensure the safety, quality, and effectiveness of products

exported to the United States while also reducing the regulatory burden

on manufacturers. For the United States, the MRA and this regulation

also permit FDA to redirect some of its inspectional resources from

countries whose systems are found equivalent to, or higher to, risk

priorities not covered under the MRA. The agency may thus better target

its limited foreign inspection and other resources devoted to imports

and other regulatory concerns. Thus, FDA will be able to leverage its

resources by relying on information from its counterpart regulatory

authorities in foreign countries that have demonstrated equivalence.

Under the MRA and this regulation, as equivalence is achieved between

regulatory systems of EC Member State authorities, or CAB's, and FDA,

there will be reduced need for importing countries to engage in

resource-intensive foreign inspection, sampling, and examination of

products being for entry from countries with equivalent systems. This

can assist in speedier approvals of safe and effective products and in

more comprehensive and effective surveillance of GMP's and quality

systems. In addition, during the transition period, collaborative

confidence-building activities between FDA and EC Member State

authorities and CAB's can result in harmonization of requirements at a

high level of

[[Page 60123]]

consumer protection, thus enhancing regulatory controls.

2. One comment described three fundamental principles which

underlie the comment's concerns about the MRA and the proposed rule:

(1) The paramount goal for FDA implementation of the MRA and the

proposed rule must be to safeguard public health of U.S. consumers; (2)

equivalence determinations performed by FDA must improve or at least

maintain current U.S. public health protections; and (3) the United

States' democratically accountable, policy-making process must be

maintained.

FDA agrees with these comments. FDA has consistently articulated

these same principles in its policies relating to international

cooperative agreements over the last decade. In 1988, the FDA and

Directorate-General III (Industrial Affairs) of the European Commission

began early discussions in consideration of agreements in the areas of

pharmaceutical and medical device GMP inspections. The FDA's primary

motivation in seeking such agreements was at that time, and still is, a

desire to leverage its limited inspectional resources and to enhance

public health protection through increased assurance that regulatory

counterparts are applying similar controls. FDA described the value of

pursuing international cooperative agreements with selected foreign

regulatory bodies in its 1992 ``Report of the Task Force on

International Harmonization'' (Ref. 1). The Task Force concluded that

such international agreements are an effective means of facilitating

the safety, effectiveness, and/or quality of products that are offered

for import into the United States and of efficiently setting priorities

for the agency's inspectional resources. The Task Force concluded that

a properly conceived and executed agreement would permit FDA's use of

foreign government inspectional information to assist in the agency's

regulatory decision-making and could help FDA to set priorities for

foreign inspection or import surveillance programs. As a result of

specific Task Force recommendations, in 1995 FDA revised its Compliance

Policy Guide (Ref. 2) to emphasize that the agency's primary goals for

entering into agreements with foreign governments are for the purposes

of better utilizing its regulatory resources and furthering its mission

of protecting the U.S. consumer.

The significant increase of international commerce in

pharmaceuticals and medical devices and the question of how FDA can

continue to ensure the safety and effectiveness of these medical

products prompted the agency to convene a Foreign Inspection Working

Group in 1995 to evaluate the agency's foreign inspection program and

related import product monitoring. In 1997, this group issued its

``Summary Report of the Foreign Inspection Working Group'' (Ref. 3)

that recognized the need for inspectional approaches that involve

cooperative activities such as the development of international

agreements between FDA and counterpart regulatory authorities in other

countries.

Section 26.21 of this rule provides that the importing country has

the right to fulfill its legal responsibilities by taking actions

necessary to ensure the protection of human and animal health at the

level of protection it deems appropriate. In addition, under Sec. 26.74

nothing in this part limits the authority of FDA to take appropriate

and immediate measures that it determines necessary to prevent

compromising human health and safety, or to fulfill its legislative,

regulatory, or administrative responsibilities.

To ensure a democratic and open process, the FDA will make

available in a public docket the complete administrative file that

constitutes the basis for FDA's equivalence determinations. In

addition, any other related documents the agency receives under the MRA

and this regulation will be releasable to the public (or not

releasable) according to current Freedom of Information Act (FOIA)

provisions. FDA also will assess the degree to which a foreign

regulatory system or CAB is accountable to consumers and other

interested parties as part of its equivalence determinations. (App. D

of subpart A, criteria I.F.). A regulatory system that is not

sufficiently transparent to assess accountability may not be found

equivalent.

3. One comment stated that the MRA and the proposed rule would

replace FDA-conducted inspections of foreign pharmaceutical plants and

FDA reviews of foreign medical devices with inspections and evaluations

performed by EC Member State authorities and CAB's located in EC Member

States.

The implementation of the MRA and this regulation may or may not

result in the replacement of some FDA inspections and product

evaluations of medical devices produced by manufacturers located in EC

Member States. Inspection reports and product evaluations may normally

be endorsed under certain conditions only if, after a comprehensive

assessment during the 3-year transition period, FDA determines that

such reports will provide the information that FDA needs for its

regulatory decision making.

4. One comment stated that the MRA negotiation took place primarily

for trade facilitation purposes. Evidence of this conclusion was

offered by the fact that the negotiations were co-chaired by USTR and

the Department of Commerce (DOC) and that press releases and other

public statements have characterized the discussions as ``trade

negotiations.''

FDA participated in the negotiations leading to the MRA under its

own authority to enter agreements with foreign authorities (see, inter

alia, sections 519 and 803 of the Federal Food, Drug, and Cosmetic Act

(the act) (21 U.S.C. 360(i), 383)). Furthermore, the agency believes

that the MRA and this regulation, properly based on a rigorous

determination of equivalence of regulatory systems, can help ensure the

safety, quality, and effectiveness of these imports while also reducing

the regulatory burden on manufacturers, thereby facilitating

availability of these important medical products. The goals of

facilitating trade and protection of the public health are not

necessarily incompatible. The role of USTR and DOC was one of

coordination. FDA's ability to reach decisions on the basis of its

public health priorities was upheld, and never compromised, during the

negotiations. FDA officials led the negotiations concerning the FDA

annexes, and FDA's views were incorporated into the portions of the

``framework'' agreement where FDA's interests were affected. USTR and

DOC as well as European trade counterparts undoubtedly desired an MRA

for trade reasons. Those agencies, however, supported FDA's position in

the negotiations and did not interfere with FDA's desire to maintain

health and safety protections. FDA believes that this degree of FDA

autonomy will continue as the MRA and this regulation are implemented.

Furthermore, FDA has entered into an interagency Memorandum of

Understanding (MOU) with the USTR that ensures that any decisions about

the MRA that relate to matters under FDA's jurisdiction will be made

only by FDA (see the notice of availability for this MOU published

elsewhere in this issue of the Federal Register). Specifically, the MOU

requires that USTR notify FDA of matters that the Joint Committee will

be considering. The MOU states that while USTR would normally speak and

vote for the U.S. Government in the Joint Committee, subject to

arrangements with other agencies covered by the MRA, FDA will speak

for, and vote on behalf of, the U.S.

[[Page 60124]]

Government on any matter pertaining to FDA's statutory or regulatory

authority raised within the Joint Committee or within any other bodies

established under the MRA. In addition, the Sectoral Annex for

Pharmaceutical GMP's is specifically exempted from certain provisions

of the ``framework'' agreement, in order to avoid any possible

confusion about the use of CAB's that are not utilized in the Annex.

Finally, throughout the ``framework'' agreement and the FDA product-

related annexes there are clear safeguard requirements that stipulate

if there are health and safety concerns on the part of the importing

authority, the importing authority may take appropriate action.

5. One comment stated that the goal of the MRA and the proposed

rule appears to be to harmonize health, safety, and environmental

standards to the lowest acceptable levels.

While the process of confidence-building and equivalence

determination may lead to harmonization of some standards, FDA

disagrees that lowest common denominator standards will result. During

the transition period, collaborative activities and joint equivalence

determinations by FDA-EC Member State authorities and CAB's may result

in harmonization of requirements that will enhance consumer protection.

By law, section 803(c)(1) of the act requires the Commissioner of Food

and Drugs (by delegation under 21 CFR 5.10) to work to ``harmonize

regulatory requirements,'' but conditions these actions on findings by

the Commissioner that ``such harmonization continues consumer

protections consistent with the purposes of this Act.'' FDA's

experience in working as a party to the Global Harmonization Task Force

(GHTF), the International Conference on Harmonisation of Technical

Requirements for Registration of Pharmaceuticals for Human Use, and the

International Cooperation on Harmonisation of Technical Requirements

for Registration of Veterinary Medicinal Products has demonstrated that

regulatory public health authorities do not compromise health and

safety as standards are harmonized, because the relevant discussions

and and the resulting documents have been thorough, science-based, and

protective of public health. (Harmonization can lead to higher

standards because in instances where one regulator has a requirement

that others lack, the ensuing discussions of why one regulator has such

a requirement often leads to understanding, acceptance, and inclusion

of a corresponding provision in the harmonized standard.)

6. One comment expressed the belief that the MRA and the proposed

rule put U.S. consumer protection at risk of compromise and cited as

evidence the fact that the negotiations extended well beyond their

original deadlines, and were reportedly near collapse due to concerns

about whether EC regulation is as stringent for pharmaceuticals and

medical devices as U.S. regulation.

The comment is correct in stating that the MRA negotiations took

longer than expected and that FDA had concerns during the early stages

of MRA discussions that early MRA drafts would not provide appropriate

public health protections for U.S. consumers. For example, the

provision for a 3-year confidence-building transition period was not

considered during early MRA discussions. Acceptance of the need for a

transition period during which time equivalence would be assessed was

one of the keys to moving the MRA negotiations ahead. Indeed, Article 2

of the Sectoral Annex for Pharmaceutical GMP's states that the

determination of equivalence of the regulatory systems by the parties

is the cornerstone of that Annex. FDA believes that the requirement of

a comprehensive assessment of equivalence before inspection reports and

product evaluations will be normally accepted, and other safeguard

clauses such as Secs. 26.21 and 26.74, as discussed previously, provide

strong public health protections. In the medical device provisions, EC

acceptance that FDA must, as a matter of law and policy, maintain final

decision making authority over premarket notifications, and that the

MRA could cover premarket notifications only for certain devices,

enabled conclusion of the MRA.

7. One comment stated that FDA must make a commitment to seek

additional resources to accomplish the activities required by the MRA

and the proposed rule.

In the preamble to the proposed rule, FDA acknowledged that neither

startup costs nor operational costs are being covered by additional FDA

funding in FDA's current budget and that startup costs will have to be

absorbed by current funding. Certain key activities of the MRA and this

regulation, such as joint inspections of manufacturers located in EC

Member States, may be accomplished as part of FDA's inspections of

these manufacturers that have been scheduled for the next fiscal year

as part of FDA's normal budget process. Other activities of the MRA and

this regulation will likely result in new costs. These additional costs

are difficult to estimate because they depend significantly on the

initial findings from FDA's equivalence assessments of EC Member State

authorities and CAB's. FDA will likely be better able to estimate these

additional costs as experience is gained during the first year of the

transition period. After the first year, FDA will reassess its need to

seek additional funding for the activities required by the MRA and this

regulation.

8. One comment stated that a failure to devote adequate resources

to the programs of the MRA and the proposed rule during the

implementation stage would endanger their success.

FDA agrees with this comment. FDA will engage in activities during

implementation as its resources permit. FDA recognizes the critical

need to undertake a number of activities during the transition process

as part of its assessment of the equivalence of CAB's located in EC

Member States, including participating in seminars, workshops, joint

training exercises, and observed inspections, as well as the analysis

required for the equivalence determination process. In addition, any

significant problem that is identified may require additional

activities to address and resolve it. Finally, the parties will need to

develop a consensus on what must be present in quality system and

product evaluation reports (or, where harmonization cannot be achieved,

each side will need to identify what it needs). Further, the parties

will develop a notification and alert system for defects, recalls, and

similar problems. All of these activities will require resources, and

FDA recognizes their completion is critical to the success of the MRA

and the implementation of this regulation.

9. One comment stated that the number of repetitive inspections

must actually decrease if the potential value of the MRA and the

proposed rule is to be realized.

FDA's interest in the MRA is its view that public health protection

can be better assured through enhanced regulatory cooperation. Although

FDA agrees that cost savings to industry and to government regulatory

authorities can be realized by an actual decrease in the number of

inspections that are unnecessarily duplicative, there are additional

benefits that may be achieved by the activities required under the MRA

and this regulation that make the MRA endeavor worthwhile. For example,

the cooperative activities between FDA and EC Member State authorities

that will of necessity be part of the equivalence determination

[[Page 60125]]

process may result in harmonization or congruence of requirements

resulting in strengthened consumer protection, more effective

regulatory approaches, and reduced regulatory burden on each side of

the Atlantic.

10. One comment suggested that FDA must use the inspectional

savings anticipated by the MRA and the proposed rule for increased

surveillance activities.

Any resource savings resulting from the MRA and this regulation

will be used by FDA as necessary and appropriate to enhance the

effectiveness of FDA's regulatory programs.

11. One comment stated that FDA should complete confidence building

activities as expeditiously as possible and should devote adequate

resources to that job.

FDA agrees with this comment and, as stated previously, will devote

resources to this program to the best of its ability.

12. One comment noted that the proposed rule did not address FDA

guidance documents and asked how guidance documents would be handled

under the MRA and this regulation. The comment implied that some FDA

guidance documents contain requirements.

FDA will handle guidance documents under this MRA as it handles all

guidance documents, according to FDA's Good Guidance Practices (62 FR

8961, February 27, 1997). If FDA determines that there is a need for

guidance documents under the MRA, it will publish them or refer to them

as appropriate. FDA periodically makes available to the public lists of

guidance documents and those that are relevant to the implementation of

the MRA or this regulation will be referred to during such

implementation. Guidance documents do not themselves contain

requirements; they do sometimes refer to or explain requirements that

exist in statutes or regulations.

13. One comment expressed concern that the MRA and the proposed

rule might result in lower health, safety, and environmental standards

in both the United States and the EC. The comment expressed concern

that the ``framework'' agreement might allow undue pressure to relax

regulation in one sector of commercial activity in order to secure

market access in another unrelated sector. Consequently, the comment

asked FDA to seek ``the elimination of the umbrella framework

agreement'' to ensure that U.S. health and safety standards are not

compromised.

FDA declines to take the action requested by the comment. The

``framework'' agreement will not result in lower health or safety

standards for FDA-regulated products. The MRA and this regulation

expressly preserve the authority of a party to determine, ``through its

legislative, regulatory, and administrative measures, the level of

protection it considers appropriate for safety; for protection of

human, animal, or plant life or health; for the environment; for

consumers; and otherwise with regard to risks'' (MRA Article 15,

``Preservation of Regulatory Authority,'' and Sec. 26.74 of this

regulation).

Additionally, this regulation expressly recognizes, at several

places, that statutory and regulatory requirements applicable to drugs

and devices remain in place unchanged (see, e.g., Sec. 26.1(b)

(definition of ``equivalence'') see also Sec. 26.32(c) and

Sec. 26.62(c) and that each party may take actions necessary to ensure

the protection of human and animal health ``at the level of protection

it deems appropriate'' (see Sec. 26.21; see also Sec. 26.74(a) and (b)

(preservation of regulatory authority)).

This position is consistent with both the statutes FDA administers

and international agreements such as the Agreement on Technical

Barriers to Trade which expressly recognizes that ``no country should

be prevented from taking measures necessary to ensure the quality of

its imports, or for the protection of human, animal or plant life or

health, of the environment, or for the prevention of deceptive

practices, at the levels it considers appropriate, subject to the

requirement that they are not applied in a manner which would

constitute a means of arbitrary or unjustifiable discrimination between

countries where the same conditions prevail or a disguised restriction

on international trade * * *.'' (See paragraph 6 of the preamble to the

Agreement on Technical Barriers to Trade).

FDA further notes that, under an MOU with USTR concerning the MRA

(see the notice of availability for this MOU published elsewhere in

this Federal Register), USTR will notify FDA of matters to be

considered by the Joint Committee, which will be established to

consider issues relating to the effective functioning of the MRA. While

USTR normally will speak and vote for the United States in the Joint

Committee, subject to arrangements with other agencies covered by the

MRA, FDA will speak for and vote on behalf of the United States on any

matter pertaining to FDA's statutory and regulatory authority. FDA will

also represent the U.S. Government on such matters in any other

committee or bodies with similar functions established under the MRA or

its annexes. This MOU will ensure that, insofar as FDA-regulated

products and issues are concerned, public health and safety issues are

adequately considered and addressed.

14. One comment strongly disagreed with FDA's position that a 30-

day comment period for the proposed rule was adequate. The comment was

characterized as ``a preliminary identification of key issues involved

in the [MRA or the proposed rule] process'' and requested that the

comments be viewed as ``the beginning of an ongoing open process in

which public comments will be considered at later junctures'' with

future opportunities to discuss issues with FDA and other government

officials.

As stated in the preamble to the proposed rule (63 FR at 17744 at

17747), FDA provided a 30-day comment period because a longer comment

period was unnecessary in light of the numerous opportunities for

public input the agency provided during the MRA negotiations. These

opportunities included the creation of a public docket for MRA-related

issues on May 9, 1996, dissemination of a document concerning the MRA

on October 18, 1996 (including an opportunity for public comment on

that document), public exchange meetings on March 31, 1995, and October

30, 1996, a Transatlantic Business Dialogue (TABD) meeting on November

8 and 9, 1996, which included a discussion of the MRA, and other public

meetings on March 14, 1997, and September 23, 1997. The MRA itself was

initialed by governmental representatives on June 20, 1997, and has

been available on the World Wide Web (WWW) for over a year. Therefore,

the agreement upon which the proposed rule was based had been available

for analysis and comment by interested members of the public for some

months. In view of these opportunities for public discussion and

consideration of the MRA, the 30-day comment period for the proposed

rule was adequate.

FDA also stated that it was in the public interest to proceed

expeditiously to implement the MRA, and that the 30-day comment period

was not contrary to Executive Order 12889 (63 FR 17744 at 17747).

As for the comment's remarks concerning future opportunities for

public comment, the agency shares this interest and notes that the

public has many avenues for contacting FDA on almost any issue. For

example, a person may send a letter to the agency, request a meeting,

submit a citizen petition to request issuance or revision of a

[[Page 60126]]

regulation or to request agency action or reconsideration on a

particular matter, or submit comments on a document published in the

Federal Register (see, e.g, 21 CFR 10.20, 10.30, 10.33, 10.65).

In sum, FDA agrees that the agency will need to communicate with

the public, on a regular basis, as the MRA is being implemented.

Interested persons may submit comments on the MRA, or implementation of

the MRA, to the agency at any time. In addition, as noted previously

FDA's administrative practices and procedures regulations (21 CFR part

10) provide a range of processes for interaction with the agency.

Furthermore, the agency contemplates frequent meetings and other

communications with the public as MRA implementation progresses.

B. Composition and Operation of the Joint Committees

Several comments encouraged, or would revise the rule to provide

for, opportunities for public, industry, or specific agency involvement

in various programs or bodies established by the MRA and the proposed

rule or by their operation.

1. Four comments said that FDA should ensure industry or public

access to and participation in the activities of the MRA and the

proposed rule. Three comments advocated industry participation and

suggested that FDA and the EC consult the industry during the

transitional and operational phases of the confidence building stage.

Two of these three comments specifically identified TABD as being

critical or essential to implementing the MRA and the proposed rule.

Another comment expressed the opposite view, i.e., concern about what

the comment described as the TABD's involvement in the MRA

negotiations. One comment asked FDA to ensure greater public

participation and access for nongovernmental organizations in future

mutual recognition agreement negotiations and throughout their

implementation.

The agency appreciates and values public and industry input and

advice on many matters and intends to employ a variety of means to seek

input from the public on the implementation of the MRA and this

regulation. However, the MRA and its sectoral annexes represent an

agreement between governments that contemplates examination of one

another's equivalence in specific areas of regulation. Although FDA

believes it would be inappropriate to amend the rule to require

industry or consumer participation or the participation of specific

industry or consumer representatives on delegations to meetings or to

require FDA or the EC to consult industry, FDA plans to consult

interested persons--whether they represent the industry, public

interest groups, or any other interested person--at appropriate stages

of implementation of the MRA and this regulation.

As for the comment requesting greater public participation in

future mutual recognition agreement negotiations and implementation,

that request is outside the scope of this rule. However, we refer

interested persons to ``A Plan that Establishes a Framework for

Achieving Mutual Recognition of Good Manufacturing Practices

Inspections,'' dated May 20, 1998 (see ``What's New on the FDA

Website'') (``www.fda.gov/opacom/newonweb.html'').

2. Four comments discussed representatives to either the Joint

Committee or the Joint Sectoral Committee in proposed Secs. 26.17 and

26.47 (``Role and Composition of the Joint Sectoral Committee'') and

26.73 (``Joint Committee''). Three comments requested clarification as

to which U.S. Government agencies would be represented on the Joint

Committee or the Joint Sectoral Committees; two comments advocated

including officials of USTR and the Department of Commerce on the Joint

Sectoral Committees; and one comment recommended including EC trade

offices on the Joint Sectoral Committees. All four comments advocated

industry representation, or regular participation, in the Joint

Committee and/or the Joint Sectoral Committees.

FDA declines to amend the rule to describe which U.S. or EC

governmental bodies will send representatives to meetings of the Joint

Committee or Joint Sectoral Committees as requested by the comments. In

general, the government representatives to either the Joint Committee

or the Joint Sectoral Committees will vary depending upon the issues

presented to those committees (see, e.g., Sec. 26.73(a) (stating that

the Joint Committee consists of ``representatives'' of both parties)

and Sec. 26.73(b) (authorizing the Joint Committee to establish Joint

Sectoral Committees ``comprised of appropriate regulatory authorities

and others deemed necessary''). Thus, each party has the flexibility to

determine which government authorities should be present and to match a

particular governmental authority's expertise to the issue or issues

before a committee. Amending the rule so that either committee would

have to include specific representatives of U.S. Government authorities

would unnecessarily impair such flexibility, and it would be especially

inappropriate for FDA to amend the rule to specify what representatives

the EC would send to the committees.

In any case, as explained in section II of this document, the USTR

will normally speak for and vote on behalf of the United States in the

Joint Committee, subject to arrangements with other agencies covered by

the MRA, and FDA will speak for and vote on behalf of the United States

on any matter pertaining to FDA's statutory or regulatory authority.

Furthermore, the Joint Committee (when FDA is representing the United

States) and the Joint Sectoral Committee likely will be addressing

technical issues of the sort that FDA, not USTR or DOC, will be

considering. The agency is confident that, in all cases, the

composition of the Joint Committee or Joint Sectoral Committees will be

appropriate for the topics being discussed.

As for the comments seeking industry representation or

participation in the Joint Committee or the Joint Sectoral Committees,

FDA declines to revise the rule to require such industry representation

or participation. Because the MRA, including its sectoral annexes, is

an agreement between governments, it is neither necessary nor

appropriate to amend the rule to include or to require nongovernmental

entities or organizations on the Joint Committee or the Joint Sectoral

Committees.

3. One comment asked for clarification about the composition of the

Joint Committee and asked whether U.S. citizenship is required for U.S.

members.

U.S. representatives addressing FDA topics will be FDA officials.

Except in extremely rare circumstances, U.S. citizenship is a

requirement for employment by FDA. European representatives will be

European Commission officials, possibly accompanied by officials of

member country regulatory authorities.

C. Transparency and Confidentiality Issues

Several comments discussed the need for ensuring public or industry

participation in equivalence or other regulatory matters under the

rule. Other comments emphasized a need for withholding certain

information, such as trade secrets and confidential commercial

information, from public disclosure.

1. One comment suggested that the rule contain a mechanism for

public participation in the equivalence determination process. The

comment would provide the opportunity for public comment or input

throughout the 3-year transition period, as soon as FDA

[[Page 60127]]

decides which foreign regulatory systems and CAB's it will review to

determine whether they are equivalent, and again when FDA makes a

preliminary determination of equivalence. The comment also called for

public notice in the Federal Register and a response to any public

comments when FDA issues a final determination.

FDA intends to hold periodic meetings with interested parties. FDA

also plans to prepare and to make public summaries of key meetings held

with its EC counterparts concerning implementation of the MRA and this

regulation. Further, FDA will make available to the public the

administrative file that constitutes the basis for any of FDA's

equivalence determinations subject to exemptions from disclosure

provided in the FOIA and restrictions in related statutory provisions

discussed in the response to comment 2 in section II.C of this

document. These approaches should give interested persons insight as to

the information FDA considered when making an equivalence

determination.

FDA also will use the Federal Register and its Internet home page

to make available information on equivalence determinations under the

MRA and this regulation. Interested persons can submit comments on

these determinations.

The agency believes it is important that all interested parties

have an opportunity to contribute to the equivalence assessment

process. To facilitate such contribution, FDA intends to hold public

meetings during the 3-year transition period. In addition, FDA invites

all interested persons to provide the agency with information that is:

(1) Generally relevant to implementation of the MRA and this

regulation; and, (2) of particular relevance to equivalence criteria in

Appendix D of subpart A of this rule, and their application to the

authorities listed in Appendix B of subpart A of this rule. Information

should be sent to the Dockets Management Branch (address above), and

should be identified with docket number 95N-0185.

2. Three comments would revise the proposed rule to ensure that the

public has access to: Draft programs for assessing equivalence of a

regulatory system under proposed Sec. 26.6(b); information provided by

a foreign government concerning that government's regulatory activities

under proposed Sec. 26.6(c); ``audit'' reports by European authorities

submitted to FDA; or records of CAB's reviewed by a foreign government

to the extent that such records would be publicly available if they

were reviewed by FDA. One comment explained that public disclosure

would ensure accountability and enable U.S. consumers to maintain

confidence in an ``equivalent'' inspection system. One comment would

also revise the proposed rule to state expressly that neither party may

obstruct public access to information that is publicly available under

the laws or regulations of that party.

In contrast, four comments sought clarification concerning

disclosure or confidentiality issues and proposed Sec. 26.76, such as

whether reports between the parties would be subject to public

disclosure under the FOIA; whether information provided to the EC would

be subject to EC confidentiality policies; and whether alert or

vigilance reports (required by proposed Sec. 26.50) exchanged between

the parties as part of an ongoing investigation would be subject to

public disclosure.

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

Sec. 26.76(a) of this regulation and Article 17 of the MRA, each party

agrees to maintain, to the extent required under its laws, the

confidentiality of information exchanged under this regulation and the

MRA. Trade secrets, confidential commercial or financial information,

and information relating to an ongoing investigation are not subject to

public disclosure (see Sec. 26.76(b)). Additionally, the parties may

designate portions of information that it considers to be exempt from

disclosure, and parties are to take all precautions reasonably

necessary to protect information exchanged under the MRA and this

regulation from public disclosure (see Sec. 26.76(c) and (d)).

Those receiving information under the MRA will treat the

information according to their domestic laws and policies. FDA will

treat information it receives consistent with the FOIA, Privacy Act,

and FDA's regulations and policies. EC Member States will treat

information they receive according to the applicable laws in their

respective territories. Therefore, information supplied to FDA by a

foreign government or CAB and other information or documents discussed

by the comments are subject to the rules on public disclosure (or

nondisclosure) in the FOIA, the Privacy Act, parts 20 and 21 (21 CFR

parts 20 and 21). FDA further notes that other laws, regulations, and

agreements may provide additional safeguards against public disclosure

of trade secrets and confidential commercial information. For example,

section 301(j) of the act (21 U.S.C. 331(j)), in brief, prohibits any

person from using to his or her own advantage or revealing trade secret

information acquired by FDA under various provisions of the act.

Article 39 of the Agreement on Trade-Related Aspects of Intellectual

Property Rights (better known as the ``TRIPS'' agreement), to which the

United States is a signatory, states that:

Members, when requiring, as a condition of approving the

marketing of pharmaceutical or of agricultural chemical products

which utilize new chemical entities, the submission of undisclosed

test or other data, the origination of which involves a considerable

effort, shall protect such data against unfair commercial use. In

addition, Members shall protect such data against disclosure, except

where necessary to protect the public, or unless steps are taken to

ensure that the data are protected against unfair commercial use.

These laws and agreements would also be applicable to information and

documents acquired by FDA under the MRA and this regulation.

Consequently, given the existence of various agreements, laws, and

regulations pertaining to public disclosure and confidentiality, no

revision to this rule is necessary.

The public availability of the documents or information identified

in the comments would, therefore, depend on whether they contained

information that, under U.S. laws, regulations, or other obligations,

is exempt from public disclosure. In some instances, portions of a

document may be publicly available. For example, alert or vigilance

reports under Sec. 26.50, when provided to FDA, would be available for

public disclosure under Sec. 20.111 if the investigation of the

reported incident has been completed; however, personal identifiers

would be redacted, as FDA currently does under Sec. 20.111.

3. Two comments would revise proposed Sec. 26.76 so that a person

submitting information to FDA could decide whether all or part of the

information is confidential or trade secret and therefore not subject

to public disclosure.

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

agency believes this issue is handled adequately under current FDA

regulations and policies. FDA policy is to make the fullest possible

disclosure of records to the public, consistent with the rights of

individuals to privacy, property rights in trade secrets and

confidential commercial or financial information, and FDA's need to

promote frank internal policy deliberations and to pursue regulatory

activities without disruption (see Sec. 20.20). Under FDA regulations,

marking records submitted to FDA as confidential raises no obligation

by FDA to regard such records as confidential, to return them

[[Page 60128]]

to the person submitting the records, to review the records to

determine whether all or part of them are available for public

disclosure, or to withhold them from public disclosure (see

Sec. 20.27). FDA determines whether data or other information are

confidential and not subject to public disclosure, consistent with

Sec. 20.28.

4. One comment would revise proposed Sec. 26.76 so that trade

secrets, ongoing investigations, and patient records are confidential.

FDA declines to amend the rule as requested by the comment. Such a

revision is unnecessary given current statutory and regulatory

requirements involving public disclosure and confidentiality, including

the prohibition in section 301(j) of the act against disclosure of

trade secrets, all of which apply to information FDA receives from the

regulatory authorities and CAB's.

5. One comment would revise the rule so that a foreign country

receiving documents from FDA would have to make those documents

available to the U.S. public, even if the foreign country's laws would

not make those documents publicly available. The comment would make

information submitted to a foreign country available to the public if

that information were publicly available in the United States.

FDA declines to revise the rule as suggested by the comment.

Requiring a foreign country to make information available to U.S.

citizens when such disclosure would be contrary to the foreign

country's own laws and regulations is beyond the scope of this

rulemaking and beyond FDA's regulatory authority. In addition, the

public availability in the United States of information provided to EC

officials is already dealt with in FDA's regulations, particularly

Sec. 20.89. (Under Sec. 20.89, disclosure of nonpublic information to

foreign officials does not automatically result in that information

being available to the public generally.)

6. One comment would revise proposed Sec. 26.20 as it pertains to

the application of the alert system against individual companies. The

comment expressed concern about lack of transparency and due process

before a company is placed in or removed from ``a negative regulatory

status'' and suggested that the elements to be considered as part of

the alert system be described.

The comment misunderstands the purpose of the alert system

provisions of the MRA and this regulation. The agency wishes to clarify

that the purpose of the alert system is to implement a timely exchange

of product quality information and not information on the regulatory

status of inspected firms. The agency is keenly aware of the need to

avoid predecisional or otherwise inappropriate regulatory

classification of a firm or product. In implementing Sec. 26.20, FDA

intends to apply the same standard of fairness and due process it

currently affords to manufacturers with respect to regulatory matters.

While keeping in mind the need to be fair to manufacturers, however,

the agency must keep public health and safety paramount in ensuring

that the alert system functions effectively to protect consumers from

unsafe or ineffective products. Regarding ``transparency,'' as

discussed in section II of this document, FDA will apply to the alert

system established by the MRA and this regulation the applicable

requirements as to disclosure and nondisclosure.

The proposed rule did set forth the elements to be considered in

developing a two-way alert system (see 63 FR 17744 at 17752), and the

alert system is designed to serve as a means for notifying each party

of crises and emergencies. For example, the documentation element for

the two-way alert system refers to elements such as ``definition of

crisis/emergency and under what circumstances an alert is required''

and ``mechanism of health hazards evaluation and classification''

(id.). The crisis management system element mentions ``crisis

management and communication mechanisms,'' ``establishment of contact

points,'' and ``reporting mechanisms.'' In short, the alert system does

not place specific firms in a ``negative regulatory status'' or

otherwise punish firms as the comment suggests.

7. One comment asked about the confidentiality of submissions under

the MRA, particularly submissions to medical device CAB's.

Confidentiality by FDA and EC regulatory authorities is addressed

under Article 17 of the MRA. Confidentiality concerns are also

addressed in FDA's regulations (e.g., part 20) and guidance materials.

FDA urges manufacturers to include clear and definitive language

regarding their views on the confidentiality of submissions in

contracts developed with CAB's. Just as submitters currently identify

information they believe to be confidential commercial or trade secret

information in submissions to the agency, they should clearly mark the

same types of information in submissions to CAB's. Although FDA needs

to make the final decisions as to confidentiality, as discussed

previously in comment 3 in section II.C of this document, the

contractual agreement between submitters and the CAB's should address

the desired handling of information marked in this manner and

contractual provisions should specifically address the need to share

information with regulatory agencies participating in the MRA,

including FDA.

D. Equivalence issues

1. One comment recommended that equivalence determinations and

suspensions of equivalence determinations should be made by the

importing authority only, rather than jointly by the parties to the MRA

and the proposed rule. The exporting country should develop the case

for equivalence, while the importing country should have complete

control over the final equivalence decision. This would maintain the

importing country's sovereign prerogative to protect the health and

safety of its citizens.

FDA agrees that the importing authority must have control over the

decision as to whether the exporting authority is equivalent, and the

agency believes that the decision-making process set up by the MRA and

this regulation provides adequately for this. The MRA and this

regulation stipulate that equivalence determinations will be made by

the Joint Sectoral Committee, which consists of representatives of the

parties. This regulation states that decisions of the Joint Sectoral

Committee ``will be taken by unanimous consent'' (Secs. 26.17(b) and

26.47(b)). Therefore, no equivalence determinations can be reached in

the Joint Sectoral Committee without concurrence by both sides. Hence,

in all cases, the relevant authority of the importing country (FDA, in

the case of imports into the United States) will have definitive

decision making authority.

Similarly, the importing party's right to determine that an

equivalence determination should be suspended is also protected by the

MRA and this regulation. Decisions to suspend equivalence are taken in

the Joint Sectoral Committee, and when that Committee cannot reach

unanimous consent on the appropriate action, the matter is referred to

the Joint Committee. (As discussed earlier, FDA officials will speak

for, and vote on behalf of, the U.S. Government on any matter

pertaining to FDA's statutory or regulatory authority raised within the

Joint Committee or Joint Sectoral Committees.) If unanimous consent is

not reached within a set time period in the Joint Committee, the

contested authority must be suspended. Thus, if

[[Page 60129]]

during these deliberations, the importing authority remains convinced

that an exporting authority's equivalence determination should be

suspended, the contested authority will be suspended even if the other

party disagrees.

Furthermore, the importing country's sovereign prerogative to

protect the health and safety of its citizens is further protected for

pharmaceuticals by Sec. 26.21 and for medical devices by Sec. 26.67(f).

Section 26.21 provides that a party may, if necessary to ensure the

protection of human and animal health at the level of protection it

deems appropriate, take actions such as suspension of the distribution

of the pharmaceutical, product detention at the border of the importing

country, withdrawal of the batches and any request for additional

information or inspection as provided in Sec. 26.12. Section 26.67(f)

provides that a party may, prior to the suspension of a CAB, cease

accepting the results of conformity assessment procedures performed by

that CAB if the decision for such action is made on the basis of

health, safety or environmental considerations, among others. The

``framework'' of the MRA and this regulation also contain a provision

(Article 15 and Sec. 26.74, respectively) preserving domestic

legislation.

2. One comment stated that equivalence determinations must be based

on an exacting review of the foreign regulatory system. This comment

emphasized that equivalence should be determined to exist only where a

finding can be made that the foreign system meets or exceeds the level

of public health protection, enforceability, transparency, and

effectiveness of the U.S. system.

FDA agrees with this comment, and intends to carry out a careful,

detailed, and complete review of foreign regulatory systems in order to

determine whether equivalence does, in fact, exist. FDA's review will

examine whether the foreign system, as it is implemented by the

exporting authority, provides the same (or a higher) level of public

health assurance as the FDA system. The enforcement activities of the

foreign regulatory system and the foreign system's effectiveness in

assuring public health protection are very important components of the

overall equivalence analyses. For pharmaceuticals, they are

specifically covered in subpart A of this regulation, Appendix D,

Subsection I (Criteria for Assessing Equivalence for Post- and

Preapproval). Criterion I. (Ability to enforce requirements and to

remove products found in violation of such requirements from the

market) and Criterion V. (Execution of regulatory enforcement actions

to achieve corrections, designed to prevent future violations, and to

remove products found in violation of requirements from the market)

focus on the execution of regulatory enforcement actions. All of the

criteria taken as a whole cover the public health protection and

effectiveness of the foreign system. In addition, Criterion I. F.

(Accountability of the regulatory authority) relates to transparency,

in that there must be a system through which the regulatory authority

is accountable for its actions. Similar criteria will be developed and

applied for competent authority oversight of medical devices. FDA

expectations as to medical device CABs' reviews of premarket

evaluations are set forth in a guidance document announced in the

Federal Register of July 2, 1998 (63 FR 36240).

3. One comment requested clarification of equivalence assessment

(Sec. 26.6) and asserted that enforcement and regulatory compliance

systems between the United States and the EC need to be comparable. The

comment explained further that, before assessments can be made, local

regulations for pharmaceutical manufacturing should be in place. The

comment added that EC countries have not issued and made public such

regulatory documents as warning letters, to identify unacceptable

manufacturers.

The agency emphasizes that, as stated in the definition of

equivalence, to be equivalent to the United States, EC regulatory

authorities need to be ``sufficiently comparable to assure that the

process of inspection and the ensuing inspection reports will provide

adequate information to determine whether respective statutory and

regulatory requirements of the authorities have been fulfilled.''

(Sec. 26.1(c)). However, ``[E]quivalence does not require that the

respective regulatory systems have identical procedures.'' Furthermore,

among the criteria for assessing equivalence, contained in Appendix D

of subpart A, is the ``[A]bility to enforce requirements and to remove

products found in violation of such requirements from the market'' and

``[A]ccountability of the regulatory authority.'' The agency expects

that these two criteria, in combination with others in Appendix D,

should address the comment's concerns.

The agency does not understand the comment's apparent premise that,

before assessment can commence, regulatory systems must already be

comparable. The agency intends to assess the equivalence of an

authority based upon the criteria in Appendix D of subpart B as they

exist at the time the agency makes the assessment, and needed steps can

be taken to address any shortcoming noted.

4. One comment emphasized the need to assure a level playing field

in terms of inspectional activity (i.e., the length and frequency of

inspections and the number of auditors). This comment recommended

collection of statistics about these activities during the transition

period and then steps to ensure a reasonable harmonization in

approaches between European and FDA audits.

FDA agrees with this comment. Equivalence must exist not only in

the foreign authority's legislation and written procedures (including

those concerning audits), but also in the manner in which these

policies are actually implemented. Under the MRA and this regulation,

the conduct of inspections is one of the criteria (Criteria IV) that

must be considered in reaching equivalence determinations for

pharmaceuticals.

5. One comment questioned how the MRA and the proposed rule would

stop a country from relaxing its standards to create an industry-

friendly regulatory environment within its jurisdiction, resulting in

movement of industry from countries with strict enforcement to

countries of less strict enforcement.

There are limits to what governments can do to influence corporate

choices about location or relocation of manufacturing sites; many

factors play a part in these corporate choices. In any case, the MRA

and this regulation have several mechanisms to help prevent ``a race to

the bottom'' with respect to regulatory controls. First, the process

for ascertaining equivalence will be rigorous. Second, after an

equivalence determination has been made, Article 18 of the Sectoral

Annex for Pharmaceutical GMP's (Sec. 26.18 of this regulation) and

Article 19 of the Sectoral Annex for Medical Devices (Sec. 26.49 of

this regulation) provide that the parties and authorities are to inform

and consult one another, as permitted by law, on proposals to introduce

new controls or to change existing technical regulations or inspection

procedures, and to provide the opportunity to comment on such

proposals. Furthermore, the parties must notify each other in writing

of any changes to relevant legislation, regulations, and procedures.

Third, Article 15 of the MRA and Sec. 26.15 of this regulation provide

for monitoring activities for the purpose of maintaining equivalence.

Fourth, either side may refrain from ``normally endorsing'' audit

reports or device evaluation reports if regulation is

[[Page 60130]]

insufficiently strict. Fifth, if FDA believes that the foreign

authority has made changes to its control system that lessen the

equivalence of that system, FDA has the right to contest the

equivalence of that regulatory authority.

Although the MRA and this regulation cannot prevent an exporting

country from relaxing its standards, the MRA and this regulation ensure

that the importing country must be notified, the equivalence

determination of the exporting country can be suspended, and importing

countries can take needed actions to protect their citizens.

6. One comment offered support for the proposed rule's recognition

that an equivalence assessment must include joint training and joint

inspections. This comment emphasized that the MRA and the proposed rule

should provide for monitoring and verification of on-going equivalence,

including on-going training, on-going joint inspections, and periodic

on-going visits.

FDA agrees with this comment. This regulation, as currently

drafted, provides for such monitoring and verification in Sec. 26.15

for pharmaceuticals and Sec. 26.69 for medical devices. In the case of

medical devices, Sec. 26.69 does not specifically mention training, but

also does not exclude it. Joint training exercises are listed in

Sec. 26.37 as a confidence building activity during the transition

period, and FDA considers monitoring and verification of on-going

training to be an essential element of verifying that equivalence

continues to exist.

7. One comment stated that the MRA and the proposed rule should

provide for periodic expiration of an equivalence determination within

3 to 5 years following the initial determination. FDA should then

publish a notice in the Federal Register for public comment on whether

the equivalence determination has worked and should be renewed. Before

renewing the equivalence determination, the United States should verify

that the foreign country's or CAB's procedure continues to be

equivalent.

FDA agrees that periodic reexamination of a foreign system that has

been found equivalent is a prudent practice to ensure that equivalence

continues to exist. The agency intends to provide for monitoring of

continued equivalence in its implementation of equivalence

determinations arrived at under the MRA and this regulation. However,

the agency does not believe it necessary to require a ``sunset''

provision for periodic reexamination of equivalence in the MRA or this

regulation. FDA will consider how to provide for reexamination of

equivalence during implementation of the MRA.

E. ``Piggy back'' Agreements

1. One comment suggested that the MRA and the proposed rule should

prohibit the development of what the comment called the ``piggy-back

dilemma'' because they would set a precedent for these types of

arrangements. The comment described an example of such a ``piggy-back''

arrangement as FDA establishing a mutual recognition agreement with

country A, country A then establishing a mutual recognition agreement

with country B, and then FDA automatically granting a mutual

recognition with country B on the basis of its mutual recognition

agreement with country A.

FDA disagrees with the comment's conclusion that the MRA and this

regulation would set a precedent for entering into such ``piggy-back''

arrangements. The MRA and this regulation require a determination of

equivalence be made by FDA of each EC Member State regulatory authority

and each device CAB located in EC Member States before any inspectional

or evaluation reports would be ``normally endorsed'' by FDA under

certain conditions. There are no provisions in the MRA or this

regulation for the ``normal endorsement'' of reports from any countries

or CAB's that have not been determined to be equivalent by FDA.

2. One comment strongly opposed what the comment called ``piggy

back equivalence'' as described in the proposed rule under

Sec. 26.11(b) because it would take away FDA's authority to make its

own equivalence determinations and otherwise compromise its ability to

ensure public health.

The so-called ``piggy-back'' or ``surrogate'' inspections described

in Sec. 26.11(b) provide that FDA may ``normally endorse'' inspection

reports resulting from joint inspections by an equivalent authority and

a nonequivalent authority of manufacturers located in the nonequivalent

authority's territory. Under the provisions of the MRA and this

regulation, FDA has the option of participating in all ``surrogate''

inspections and expects to exercise this right as necessary.

Furthermore, the MRA and this regulation have other safeguards in place

for these types of inspections, and more generally as described

previously, that ensure public health protections are maintained.

F. Pharmaceutical issues

1. One comment stated that if FDA has confidence that the EC can

regulate drug substances, biologics should also be included in the

scope of the document.

Many biological products, such as vaccines and therapeutic drug

products, are included in the scope of the MRA and this regulation.

Other biological products, specifically human blood, plasma, tissues

and organs, were excluded from the scope of the MRA. In order for there

to be a finding of equivalence, the parties to the MRA and this

regulation must have sufficiently comparable regulatory systems for the

products. Not all EC Member States have established regulatory systems

for human blood, plasma, tissues, and organs at this time, so it would

not be possible to have a finding of equivalence during the transition

period for these products. Plasma derivatives were excluded from

initial consideration because the U.S. regulation of plasma derivative

products has recently undergone intense scrutiny and regulatory change;

therefore, the FDA did not believe it appropriate at this time to

include plasma derivatives within the scope of the MRA and this

regulation.

2. One comment suggested that Sec. 26.1 of the proposed rule be

amended to include a definition for the term ``normally endorsed.''

The agency believes that a codified definition of ``normally

endorsed'' is not needed because the rule (at Sec. 26.12) exemplifies

circumstances in which the reports would not be normally endorsed.

However, FDA wishes to clarify that normal endorsement generally means

that an authority will accept the information contained in the

inspection report to evaluate and determine a manufacturer's compliance

with that authority's requirements, and FDA expects to endorse the

finding in the reports most of the time. FDA is not, however, prevented

from reaching different conclusions in appropriate circumstances.

3. One comment suggested revisions to the definition of GMP's

(Sec. 26.1(c)(1)) to explicitly include packaging, labeling, testing,

and quality control.

FDA believes the suggested revisions are unnecessary. Labeling,

testing, quality control, and packaging are part of manufacturing. FDA

believes that the proposed definition meets the needs of part 26

because it is consistent with FDA's statutes and regulations.

4. One comment said that the proposed definition of ``inspection

report'' (Sec. 26.1(e)) was inconsistent with

[[Page 60131]]

the definition of ``inspection'' because it lacked reference to report

coverage of commitments made as part of the approval to market a

product. The comment suggested added wording to include such

commitments.

The agency believes it unnecessary to modify the definition of

``inspection report,'' as suggested, because it should be clear from

other sections of the rule (such as Secs. 26.2, 26.3, and 26.14), that

FDA fully expects that reports covering preapproval inspections of drug

manufacturers will, as a matter of course, include information relating

to commitments made as part of the marketing approval. In addition, as

stated in Sec. 26.8, the agency intends to work quickly with

counterpart authorities under the MRA to determine inspection report

contents and format.

5. One comment suggested that the proposed rule clarify that it

would apply only to inspection of firms that are exporting covered

pharmaceutical products from either of the two regions to the other.

The agency believes that the current wording in Sec. 26.3 is

sufficiently clear to limit the scope of inspections to only those

firms located in the two regions. The rule states in relevant part that

the ``provisions of this subpart shall apply to pharmaceutical

inspections carried out in the United States and Member States of the

European Community* * *.'' Furthermore, Sec. 26.12 refers to inspection

reports being normally endorsed by the importing (emphasis added)

party. Clearly, the importing party is interested in only inspection

reports because of products being imported into its territory.

6. One comment suggested changing the word ``both'' to ``either''

in Sec. 26.4(a) on the grounds that a product regulated as a drug by

one party but not the other should not be excluded from this regulation

because at least one party will apply current GMP standards to the

product.

The agency disagrees with the suggestion. If an importing country

regulates an article as a drug, but the exporting country does not, the

importing country would likely hold the article to a different (higher)

set of manufacturing standards. In such a situation, it is unlikely

that the importing country would find the exporting country's

inspection report of value in assessing the manufacturer's compliance.

7. One comment objected to the provision in Sec. 26.6(c) that

equivalence assessments mandate joint inspections. The comment

suggested that they be minimized or replaced by ``accompanied

inspections'' where the lead authority is clearly designated.

FDA believes that the conduct of joint inspections is an essential

part of the equivalence assessment process. Such assessments would be

incomplete without first hand observation of how an authority conducts

an inspection. The agency wishes to clarify that, as stated in the

rule, the conduct of joint inspections is ``for the purpose of

assessing regulatory systems and the authorities' capabilities.'' The

actual format of the joint inspections has not yet been determined, and

may include inspections where one party observes the other party's

inspectional conduct or where each party has responsibility for part of

the inspection. As part of the preparation for implementation of the

MRA and this regulation, FDA expects to jointly develop with the EC a

standard operating procedure for joint inspection that embodies this

approach.

8. One comment said the second sentence in Sec. 26.6(a) (stating

that the EC will provide information pertaining to criteria under EC

competence) was problematic because the equivalence criteria in

Appendix D should be complete, as is, or else augmented, as needed.

The agency believes the comment may have misinterpreted the

proposed rule to mean the EC will be held to different, yet to be

specified, equivalence criteria. The agency wishes to clarify that the

equivalence criteria in Appendix D apply equally and fully to both

parties. The sentence at issue addresses information (e.g., European

Commission Directives) that the EC will provide relating to these

criteria that applies to all Member State authorities, versus

information that is specific to a particular Member State as to how

Member State authorities meet these criteria.

9. One comment said Sec. 26.6(b) should address the mechanism by

which the parties establish and communicate their draft equivalence

assessment programs. The comment called for interested parties to have

the opportunity to comment on the draft programs before they become

official. The comment also suggested that the phrase ``as deemed

necessary'' would for FDA be in conflict with legislative mandates that

require certain pre- and postapproval inspections.

The agency does not believe it is necessary to codify the mechanism

by which the parties establish and communicate their draft equivalence

assessment programs. The parties have yet to establish those logistics.

Regarding the opportunity for public input on such programs, as

discussed in section II of this document, the agency intends to provide

for such input in a manner consistent with current policy development

and FOIA requirements. The agency is fully aware of its legislative

mandates regarding establishment inspections and does not believe the

wording of the MRA or the rule is inconsistent with those

responsibilities. FDA intends to carry out all activities that it deems

necessary to be consistent with its responsibilities.

10. One comment suggested adding wording to Sec. 26.8 to state that

FDA will use its current inspection report format, or some modification

thereof, until the parties develop and agree upon an inspection report

format.

The agency believes the suggested wording is unnecessary because it

is confident that the parties will develop and agree upon a mutually

acceptable report format in a timely manner.

11. One comment suggested that Sec. 26.9(a) be revised to

explicitly require FDA to use International Organization for

Standardization (ISO) 9000 and ISO 10000 standards to determine that an

authority has demonstrated a pattern of consistent performance with the

criteria in Appendix D.

The agency believes it is unnecessary to apply precise statistical

methods in demonstrating a pattern of consistent performance, in the

context of complying with Appendix D. The agency intends to apply

objective and fair criteria in evaluating whether an authority has

demonstrated a pattern of consistent performance but does not believe

its already rigorous GMP and inspection requirements need an added

``layer'' of requirements based upon the ISO standards mentioned.

12. One comment suggested that Sec. 26.11(c) be amended to include

a manufacturer's certification that the product was manufactured in

accordance with applicable GMP's.

FDA's view is that such a certification is unwarranted. The agency

expects that, in the context of this agreement, authorities would rely

upon inspectional reports to determine a manufacturer's current GMP

compliance rather than relying upon the manufacturer's own declaration.

The agency therefore declines to adopt the suggestion.

13. One comment suggested adding a new paragraph, to complement

Sec. 26.11(c), that would exempt U.S. manufacturers from carrying out

all of the quality controls specified in the current GMP regulations,

provided that the controls specified in Article 22 paragraph 1(b) of

Council Directive 73/319/EEC have been carried out in the EC and each

batch or lot is accompanied by

[[Page 60132]]

certificates of current GMP and marketing authorization compliance.

FDA does not believe it is in the public interest to exempt

manufacturers from performing currently required current GMP quality

control measures, or to allow products to be released for distribution

without requisite laboratory determination of conformance to

established specifications. The suggested changes are not adopted.

14. One comment suggested revisions to Sec. 26.13 to explicitly

require that: (1) Requests for postapproval inspections include the

product and the requester's areas of special concern; and (2) when new

inspections are needed the authority receiving the request should state

the reasons why a new inspection is needed along with the estimated

completion date.

The agency does not believe it is necessary to make the suggested

modifications. The agency anticipates that, as a matter of course,

inspection requests and corresponding communication will identify

products, areas of concern, and other relevant information, as needed.

15. One comment suggested revising Sec. 26.14(b) to require the

notified authority to advise the requesting authority of approximately

when the inspection will be completed, and to require the requesting

authority at that point to detail what issues need to be addressed

during the inspection.

The agency declines to accept the suggestion because it believes

such operational logistics will be performed as a matter of course, and

need not be codified.

16. One comment suggested revising Sec. 26.15 to specify that

review of reports includes evaluation mechanisms such as tracking

trends and problems and to state that review studies be used to focus

on needed training and program improvements.

The agency agrees that report evaluation and trending, along with

coordination among the authorities to ensure program improvements, have

merit. The agency does not, however, believe it is necessary to codify

details of how equivalence monitoring will be performed.

17. With regard to Sec. 26.18, one comment asked how changes in

current GMP regulations and initiation of new programs, such as the

First Party Audit Program (FPAP), would affect the implementation of

the MRA and the proposed rule.

The agency advises that, under Sec. 26.18, FDA will inform, consult

with, and offer the opportunity for comment by, the other party, as

permitted by law, regarding changes in current GMP regulations or

inspection procedures. The mechanisms for conducting that collaboration

have yet to be developed. Regarding the FPAP, the subject of an FDA

public meeting held on June 23, 1998 (see 63 FR 27583, May 19, 1998),

the agency advises that this initiative is currently in very early

stages of development. However, conceptually, FPAP is intended to

gather information from selected human use pharmaceutical manufacturers

regarding their quality assurance measures; the information would be

submitted to FDA by those firms and could substitute, in some measure,

for information the agency would otherwise obtain from its direct

inspectional activities. The agency cannot predict how these

initiatives will affect the nature and volume of current GMP

inspections performed under the MRA and this regulation. However, the

agency will consult with the other party, in accordance with the

provisions of this rule and the MRA itself.

18. One comment suggested revising Sec. 26.18(b) to establish a 30-

day timeframe for the United States to notify the EC of any changes to

Appendix B, and a 5-day timeframe where such notification can be made

electronically.

The agency intends to promptly notify the EC of changes to Appendix

B, and to use electronic means of doing so whenever feasible. However,

FDA believes it is unnecessary to codify specific timeframes.

19. One comment suggested revising Sec. 26.19 to add reporting

timeframes of 15 days for paper correspondence or 3 days for electronic

correspondence.

FDA shares the comment's concern regarding the timeliness of

exchanging information relating to quality problems, and intends to

implement such exchange in a prompt manner to be arranged in concert

with the EC. FDA does not, however, believe it is necessary to codify a

specific timeframe.

20. One comment suggested revising Sec. 26.20(a) to establish

reporting timeframes of 5 days for paper correspondence or 3 days for

electronic communications.

As discussed in response to comments on Sec. 26.19, the agency

agrees that reporting needs to be done promptly, but does not agree

with the suggestion.

21. One comment asked if, and how, the MRA and the proposed rule

will accommodate the collection of regulatory samples during

pharmaceutical inspections.

The agency advises that the MRA and this regulation do not specify

how regulatory samples collected during establishment inspections will

be handled. However, FDA anticipates that both parties will handle such

samples as they currently do, and that information about such samples

would be contained in the inspection report or related documents. The

agency is prepared to work with the regulatory authorities should it

become necessary to develop procedures relating to sample collection.

22. One comment noted that a recent U.S. General Accounting Office

(GAO) report on FDA's foreign inspection program included

recommendations intended to improve management of the agency's overseas

inspection program. The comment asked if FDA's consideration of the

report would affect the MRA or the proposed rule.

The agency has, in response to the GAO report, already initiated

several modifications in the management of its overseas inspection

program. The agency does not at this point anticipate that

implementation of those changes will have a significant effect on the

MRA or this regulation.

23. One comment suggested adding a new paragraph to subpart C,

Sec. 26.76 that would explicitly prohibit the parties from obstructing

public access to information which, by U.S. law, is disclosable to the

public.

The agency does not agree that this section is needed because part

26 does not conflict with U.S. laws regarding public access to

information. The agency is fully aware of its legal obligations to

abide by those applicable statutes, as discussed in section II of this

document.

24. One comment suggested numerous editorial changes to add clarity

throughout the rule.

The agency has carefully considered the suggested revisions and

believes that although some have merit, on balance, the need to retain

wording in part 26 that is as close as possible to the MRA itself

outweighs the advantages that the changes might afford.

G. Medical Device Issues

The Food and Drug Administration Modernization Act of 1997 (FDAMA),

Pub. L. 105-115, 111 Stat. 2296 (1997), included a number of amendments

to the act relevant to the MRA's Sectoral Annex on Medical Devices

(Medical Devices Annex). First, an FDA pilot program for third-party

review of medical devices (see 61 FR 14789, April 3, 1996) was codified

in the act as new section 523 (21 U.S.C. 360m), entitled ``Accredited

Persons.'' In the Federal Register of May 22, 1998 (63 FR 28392), FDA

published a notice of availability of a draft guidance on its third-

party

[[Page 60133]]

accredited persons program under this new section of the act.

Interested persons should also refer to a related notice of

availability published in the Federal Register of July 2, 1998 (63 FR

36240), entitled ``Draft Guidance for Staff, Industry and Third

Parties, Third Party Programs under the Sectoral Annex on Medical

Devices to the Agreement on Mutual Recognition Between the United

States of America and the European Community; Availability'' (MRA).

This guidance document is also available in FDA's Home Page on the WWW

(``www.fda.gov'').

Second, due to amendments made by FDAMA, FDA has exempted a number

of devices from premarket notifications under section 510(k) of the act

(21 U.S.C. 360(k)) (see 63 FR 3142, January 21, 1998 (Class II

devices), and 63 FR 5387, February 2, 1998 (Class I devices)). On May

20, 1998, FDA made available a list of devices which are eligible for

third party review under new section 523 of the act. FDA plans to

propose to the European Commission that the tables attached to the

Medical Devices Annex to the MRA, listing devices eligible for review

during the transitional period of the MRA, be revised to reflect the

changes in U.S. requirements made by FDAMA and the FDA implementing

actions described previously. The EC may also suggest changes

concerning devices eligible for the MRA. These adjustments will be made

during the transitional period under the MRA.

Third, as discussed in comment 9 of section II.F of this document,

FDA now has explicit authority to recognized voluntary consensus

standards for devices due to a FDAMA amendment to section 514 (c) of

the act (21 U.S.C. 360d(c)).

1. One comment identified a typographical error in Table 1 of the

Sectoral Annex on Medical Devices (Annex) of the proposed rule

concerning radiographic screens Sec. 892.1960 (21 CFR 892.1960).

FDA agrees with the comment and in the final rule has corrected

this typographical error. Also, several minor typographical errors in

the device lists were identified by the European Commission and FDA

just prior to the signing of the MRA on May 18, 1998. These corrections

are also being made in corresponding provisions in this rule.

2. One comment from a manufacturer questioned whether condoms are

covered by the MRA.

The list of devices that FDA made available on May 20, 1998, for

eligibility in the accredited persons program under section 523 of the

act includes condoms, with and without spermicidal lubricant.

Therefore, FDA is willing to consider condoms with or without

spermicidal lubricant as eligible for participation in the premarket

assessment component of the device MRA, if the EC agrees. Condoms

without spermicidal lubricant are listed in Table 3 of the Annex for

possible inclusion in the scope of product coverage during the

Operational Period. However, condoms with spermicidal lubricants may be

regulated by the EC, or certain EC Member States, as pharmaceuticals

and hence may be outside the scope of the Medical Devices Annex.

3. One comment asked whether clearance of a 510(k) will be

equivalent to CE marking.

Clearance of a 510(k) will not be considered equivalent to the CE

marking, nor will CE marking be considered equivalent to a 510(k).

Under the MRA and this regulation, the exporting country's CAB's

perform specified conformity assessments in accordance with the

importing country's requirements. The MRA and this regulation are

intended to enable determinations: (1) Whether CAB's in the EC are

capable of conducting certain premarket and quality system evaluations

in accordance with U.S. regulatory requirements in a manner equivalent

to how those evaluations are conducted by FDA (with FDA making the

final decision, but with an expectation that FDA would ``normally

endorse'' a CAB's assessment), and (2) whether CAB's in the United

States are capable of conducting certain premarket and quality system

evaluations in accordance with EC regulatory requirements in a manner

equivalent to those conducted by European CAB's, also referred to as

``notified bodies.''

4. One comment requested implementation of a system by which U.S.

manufacturers can obtain government documents for presentation to the

EC.

Appendix A of subpart B contains addresses the relevant

legislation, regulations, and procedures for the EC and the United

States. In addition, the European Commission has a site on the WWW for

direct access to EC documents (``http://Europa.eu.int/eur-lex''). Also,

just as European notified bodies are frequently a manufacturer's first

point of contact regarding the process for meeting the European

requirements, it is expected that, under the MRA and this regulation,

U.S.-based CAB's will be able to provide manufacturers with information

on EC requirements and copies of necessary European documents needed to

meet European requirements.

5. One comment stated that industry would like to encourage

observed audits. The comment explained that, in an observed audit, a

U.S. manufacturer would allow an EC Notified Body representative to

accompany an FDA inspector during an inspection of its plant.

FDA agrees that joint industry audits are necessary to demonstrate

that CAB's are competent to assess medical devices to each country's

requirements and level of public health protection. FDA encourages

manufacturers to support observed audits.

6. One comment suggested that, to further strengthen confidence in

CAB's, training on auditing should be conducted by the United States

and EC, and industry should be encouraged to participate in FDA's third

party system, i.e., the accredited persons program.

FDA agrees with the suggestions. Training on premarket and quality

system evaluations is planned for CAB's participating in the MRA and in

FDA's third-party accredited persons program. FDA has made tentative

plans to conduct training for EC CAB's on October 14 to 16, 1998, in

the Washington, DC area. Representatives of EC CAB's interested in

participating in the MRA should begin making plans to attend this

training, which is also being provided to participants in the

accredited persons program. This training is intended to address the

scope, content, and expectations of the evaluations sufficient to

determine the equivalence of the assessments.

7. One comment requested that FDA consider IV catheters, under 21

CFR 880.5200, for inclusion in Table 2, ``Class II Medical Devices

Included in Scope of Product Coverage at Beginning of Transition

Period.''

During the negotiation of the Annex, there were no expressions of

interest in adding IV catheters to any of the tables of eligible

medical devices. FDA is willing to consider that issue in the future,

but at this time does not intend to include IV catheters in Table 2 at

this time.

8. Several comments suggested that the MRA be expanded to include

more devices, including class II devices.

As discussed previously, FDA plans to propose expansion of the list

of eligible devices to include all devices eligible for third party

review under FDAMA, except those medical devices regulated as in vitro

diagnostics. (The EC does not yet have legislation in place on in vitro

diagnostics.) The agency is considering specific suggestions by

industry comments for inclusion of specific devices. These suggestions

are extremely useful for future decisions,

[[Page 60134]]

although neither the FDA nor the European Commission can, at this time,

respond to these industry suggestions by including additional devices

under the MRA. Revision of the list will, however, be a step taken

early during the transition stage. The pace at which devices can be

added to the device premarket assessment aspect of the MRA depends on

the availability of guidance documents or FDA-recognized standards, as

discussed in comment 8 of section II.G of this document.

9. Several comments urged FDA to accept international standards,

instead of developing FDA guidance documents, for the third party

review of class II devices. One comment proposed use of 81

international and regional standards to support premarket evaluations

and quality system evaluations.

FDA, under FDAMA, has begun to recognize consensus standards for

use in its various medical device activities (see 63 FR 9561, February

25, 1998). FDA very much appreciates the submission identifying

potentially useful standards. Communications such as this that relate

to the use of standards in MRA implementation and other device

activities are being considered in regard to FDA's consensus standards

initiative announced on February 25, 1998. FDA plans to update the

guidance for the recognition and use of consensus standards, as

described in the February 25, 1998, document, and in doing so the

agency will take into account the suggestions received and the

information and experience to be gained during the implementation of

the MRA.

FDA's views on the appropriateness of including a device under the

premarket evaluation component of the MRA will depend, in part, on

whether FDA-recognized standards or review guidance documents exist to

provide a basis for product evaluation. Recognized standards or review

guidance do not currently exist for many of the additional devices

suggested for inclusion in the MRA by certain industry comments. FDA

plans to develop guidance documents only where recognized consensus

standards fail to address sufficiently the requirements for

demonstrating substantial equivalence or other U.S. requirements.

10. One comment suggested that FDA take aggressive steps to

identify and designate third party review organizations.

FDA is proceeding in a timely and transparent manner to describe

processes and expectations for third parties to participate in both the

accredited persons program and the MRA. For example, the agency, in the

Federal Register of July 2, 1998 (63 FR 36240), issued a comprehensive

guidance document entitled ``Draft Guidance for Staff, Industry and

Third Parties, Third Party Programs Under the Sectoral Annex on Medical

Devices to the Agreement on Mutual Recognition Between the United

States of America and the European Community (MRA),'' to assist

interested parties to understand the designation process for CAB's and

to prepare their applications. This document has been made available on

the CDRH Home Page on the WWW. FDA officials also have discussed the

third party programs under FDAMA and the MRA at trade shows and public

meetings.

11. Two comments suggested that both quality system evaluation

reports and premarket evaluation reports should be harmonized between

the United States and EC. Another comment stated that one of the issues

to be resolved is determining what duration of an audit is satisfactory

to the designating authorities as well as the scope, content, and

degree of rigor expected from such audits. One comment further

suggested incorporating efforts by an international harmonization group

known as the GHTF and its Study Groups I and IV in developing the

format for reports. FDA officials, European government officials, and

industry representatives are among those active in the GHTF, which is

comprised of government and industry representatives from North

America, Europe, Asia, and Australia, as well as observers from other

countries and international organizations (see International

Harmonization, Policy on Standards, in the Federal Register of October

11, 1995 (60 FR 53081)).

The comment also suggested that, in the interest of efficiency and

to minimize translation costs, such reports should be in an abbreviated

form in most circumstances. It further suggested that the reporting

forms be limited to certification by the CAB that applicable

requirements of the other party's regulations are met and that this

certification may reference those documents which were examined to

demonstrate compliance. The comment also recommended use of FDA's

initiative known as the ``510(k) Paradigm'' that offers other ways of

streamlining decisions on 510(k)'s.

FDA expects to use relevant GHTF documents, as appropriate, in

implementing the MRA. Study Group I of GHTF is developing a universal

format which provides guidance on technical documentation with a view

to first identifying similarities and divergences among various

regulatory systems and then striving to achieve, to the extent

possible, harmonization of requirements. At this time, this study group

has reviewed requirements of existing systems and is now developing the

essential principles which could facilitate harmonization of

requirements, particularly as to premarket submissions. FDA is hopeful

that it will be able to use guidance developed by Study Group I as

guidance to MRA participants on the development of premarket evaluation

reports.

Study Group IV of GHTF is preparing guidelines for auditing quality

systems of medical device manufacturers. These GHTF guidelines are now

being made available for comments by principal participants in GHTF,

e.g., by the EC United Kingdoms' Medical Devices Agency's Home Page and

the United States through a future publication as a guidance in the

Federal Register and in the FDA Home Page. FDA anticipates using audit

guidance developed by Study Group IV in the implementation of the MRA.

It is too soon to say precisely what formats will be used for

premarket evaluation reports and quality system evaluation reports

under the MRA. FDA intends to take into account the concerns expressed

in the comment about minimizing the required documentation to that

which is necessary. The formats for such reports will be developed

during the MRA transition period, and FDA expects guidance from the

GHTF study groups to be extremely helpful in this respect. During

format development, FDA will work to develop formats that will not be

unduly burdensome, so that forms and reports will include information

sufficient for the parties to determine if normal endorsement is

warranted. FDA will consider the use by third parties of FDA

streamlining initiatives such as the 510(k) Paradigm in review of

applications under the accredited persons program and the MRA.

Information on the 510(k) paradigm can be accessed on the CDRH Home

Page under ``Re-engineering Efforts'' (www.fda.gov/cdrh).

12. Two comments raised the concern that the exchange of post

market vigilance reports might create an administrative burden for

industry if reports are not kept simple. One of the comments noted that

industry has wanted to avoid multiple reporting and wishes to report

only when there is a real and imminent danger to public health.

FDA believes that adverse event reports need to be clear, concise,

and

[[Page 60135]]

addressed to public health needs. FDA, through its participation in the

GHTF Study Group II, is working toward a streamlined and harmonized

system of reporting adverse events that are required by EC and U.S.

laws and regulations. This effort is initially focused on harmonizing

the guidelines for the types of adverse events that medical device

manufacturers need to report. This guidance will make it easier for a

manufacturer to decide which events need to be reported to the

appropriate bodies in the EC and in the United States. The guidance

developed by Study Group II will also be used to institute a mechanism

for sharing adverse event data between the EC and United States under

the MRA.

13. Two comments expressed support for Sec. 26.48,

``Harmonization,'' and one suggested that FDA should continue to

participate in the efforts of the GHTF.

FDA agrees with this comment and intends to continue to participate

in these efforts, as resources allow.

14. One comment suggested that the FDA consider provisions by which

U.S. CAB's would perform domestic inspections under the act.

This comment addresses issues outside of the scope of the MRA and

of this rulemaking. Under the MRA and this regulation, U.S. CAB's will

be designated only to conduct product type-examination and verification

and/or quality system evaluations for products produced for export to

the EC.

15. One comment asked if the ``post market vigilance reports''

addressed under Sec. 26.33(a)(3) were the same as Medical Device

Reports (MDR's).

Post market vigilance reports and MDR's are similar mechanisms for

reporting adverse incidents in the EC and the United States

respectively. A system will be set up during the transition period and

maintained thereafter by which the parties will notify each other when

there is an immediate danger to public health. (See Sec. 26.50.) As

part of the alert system, each party shall notify the other party of

any confirmed problem reports, corrective actions, or recalls. The

United States and EC plan to develop the data elements of such reports

during the transition period, making use of draft documents already

being prepared by the GHTF's Study Group II.

16. One comment asked if the regulatory authorities mentioned in

Sec. 26.34 and the designating authorities mentioned in Sec. 26.65 are

the same.

``Regulatory Authority'' is defined in Sec. 26.60(a)(3) and

``Designating Authority'' is defined in Sec. 26.60(a)(1) of the final

rule. It is possible for these authorities to be different, or they may

be the same. For the purpose of the Sectoral Annex on Medical Devices,

regulatory authorities have the responsibility to implement the

provisions of the Annex, including the designation and monitoring of

CAB's.

17. One comment asked if the criteria to be used by FDA to

determine technical competence for product reviews is identical to that

which is to be used in the U.S. third party program for accredited

persons.

The technical competence, qualifications, and freedom from conflict

of interest for the product review (510(k)) part of the MRA are

essentially the same as those being applied in FDA's third-party

program for accredited persons. However, the MRA also includes quality

systems audits, and CAB's performing quality systems audits under the

MRA will need to have the additional training, expertise, and

experience to perform quality systems audits. In this respect, the MRA

is broader than the FDA third party accredited persons program.

18. One comment supported Sec. 26.31, which states that the

Sectoral Annex on Medical Devices should evolve and that the parties

will periodically review the program to assess progress and identify

enhancements. This comment also requested that timeframes be

established for specific actions during the transition period. The

comment also recommended that the regulatory authorities establish a

schedule for the execution of the specified confidence building

activities, under Sec. 26.35, that can serve to ``benchmark'' progress.

FDA finds these comments extremely useful. Specific confidence

building activities will depend on the nature of product evaluation and

the extent of CAB utilization, and available resources. A process for

scheduling confidence building activities and the schedule for

accomplishing them will be developed by the United States and EC.

19. One comment stressed the importance of defining the supporting

evidence necessary to demonstrate the technical competence and

independence of CAB's. This comment also requested that FDA make known

to the general public the date and process by which the CAB's will be

designated.

FDA issued a Federal Register of July 2, 1998 (63 FR 36240)

announcing the availability of a draft guidance entitled ``Draft

Guidance for Staff, Industry, and Third Parties, Third Party Programs

Under the Sectoral Annex on Medical Devices to the Agreement on Mutual

Recognition between the United States of America and the European

Community (MRA).'' This draft guidance addresses the criteria and

qualifications expected to demonstrate technical competence and

independence of CAB's. In addition, the draft guidance outlines the

process for designation of CAB's under the Medical Devices Annex to the

MRA. FDA will keep the public informed through the home page on the WWW

of events under the MRA, such as designation of CAB's.

20. One comment expressed concern that FDA stated that the

operational period will start at the end of the transition period, and

that FDA did not state that the transition period will be for a period

of 3 years. The comment sought clarification.

FDA disagrees that further clarification is needed. The duration of

the Transition Period is 3 years. This is clearly stated in Sec. 26.35

and in the Annex, Article 5.

21. One comment supported the process of the importing party's

regulatory authority routinely accepting or ``normally endorsing''

reports.

FDA observes that this was the criterion agreed to in the Annex and

stated in the regulation (Sec. 26.41(d), Exchange and endorsement of

quality system reports, and Sec. 26.42(c), Exchange and endorsement of

product evaluation reports).

22. One comment sought clarification of the term ``normally

endorse'' and expected that the importing party will endorse the vast

majority of quality system evaluation and premarket evaluation reports.

FDA anticipates that, once CAB's are designated, the importing

party (FDA, in the case of devices to be imported into the United

States) it is likely to endorse most reports. Sections 26.41(d) and

26.42(c) describe the expectation that reports will normally be

endorsed by the authority of the importing party, except under

circumstances delineated in those provisions.

23. One comment supported the need to continue to accept the

results of conformity assessment procedures performed by a CAB prior to

its suspension as a listed body, except in specified situations as

identified in Sec. 26.67(f).

FDA agrees with the comment's description of the Annex and the

regulation but would also point out the provisions in the framework

agreement and in Sec. 26.74 of this regulation allowing authorities on

either side to take appropriate and immediate measures to protect

public health.

24. One comment expressed concern that the conformity assessment

procedures performed by a CAB prior to

[[Page 60136]]

withdrawal remain valid subsequent to withdrawal.

FDA notes that Sec. 26.68, ``Withdrawal of Listed Conformity

Assessment Bodies,'' clearly delineates the circumstances under which a

party is no longer required to accept or recognize results of

conformity assessment procedures performed by CAB's (or, in the case of

this Annex, to no long normally endorse reports provided by CAB's). As

noted in the response in the preceding comment, however, nothing in the

MRA or this regulation supersedes a participating country's ability to

preclude shipments of products that present a concern under its laws.

Whether there will be ``normal endorsement'' of assessments done by a

CAB before its suspension or withdrawal would be determined, on the

merits, based on the facts in the particular case (see, also, the

discussion in comment 13 in section II.A of this document under the

heading ``General Comments and Issues'')

25. One comment suggested a definition section for subpart B.

FDA does not believe that it is necessary to change the regulation

to add a definition section. Guidance may be provided in the future, if

necessary.

26. One comment expected the list of CAB's would be published along

with the final rule, or that the final rule would state when the list

will be published.

At this time, FDA is not certain of the date when the designation

of CAB's will be made under the MRA. Once this occurs, however, the

list will be made public on the FDA Home Page on the WWW.

27. One comment requested availability of a description of the

information which must be presented in quality system and premarket

evaluation reports to be produced by CAB's. The comment suggested that

this information is needed in order to judge the adequacy of the work

of various CAB's.

FDA agrees. The information that FDA expects to be present in

quality system and product evaluation reports will be made public

through the FDA Home Page on the WWW during the transition period.

Comment 4 of the section II.F of this document describes how to obtain

EC documents.

28. One comment commented on the 90-day period provided for

obtaining an inspection and requested provision for extension of this

period for good cause.

FDA realizes that the CAB's may not be able to accommodate all

inspection requests within 60 or 90 days. Time extensions may be

needed, for good cause, but FDA believes procedures for such a request

need not be codified in this section.

29. One comment strongly recommended that FDA conduct an on-going

verification of the evaluation reports produced by the CAB's because

they are vital to ensuring the safety and effectiveness of medical

devices. This comment also raised concerns about the potential for

conflicts of interest in a system of private review. (Some EC CAB's are

private sector bodies.)

FDA is sensitive to the concerns raised in this comment and

recognizes the importance of adequate reports from CAB's regarding

product evaluations and quality system evaluations as well as FDA's

verifications. It is anticipated that FDA will rigorously evaluate both

the reports and the CAB's that produce them. In addition, FDA has

issued a notice announcing the availability of a draft guidance

entitled ``Draft Guidance for Staff, Industry, and Third Parties, Third

Party Programs Under the Sectoral Annex on Medical Devices to the

Agreement on Mutual Recognition between the United States of America

and the European Community (MRA),'' published in the Federal Register

of July 2, 1998 (63 FR 36240). This document addresses conflict of

interest concerns as well as technical competence criteria.

Also, it should be kept in mind that final decisions on 510(k)'s

will be made by FDA, ``normally endorsing'' submissions by CAB's,

during both the transitional stage and the operational stage of the

Medical Devices Annex.

33. One comment suggested that the wording of Secs. 26.39(b) and

26.46(b) be clarified. These sections address equivalence and listing

of CAB's.

FDA believes the wording of these sections is sufficiently clear.

Further clarification, if necessary, could be considered in the future

after experience is gained under these provisions.

34. One comment stated that CAB's should be designated within the

first 2 years of the transition period because sufficient accumulation

of evidence supporting equivalence would be unlikely if designation

occurred in the last year of the transition period.

FDA points out that Article 6 of the Annex and Sec. 26.36 of this

regulation states that ``each Party shall designate [CAB's] to

participate in confidence-building activities by transmitting to the

other Party a list of CAB's* * *.'' This transmission will be done at

the start of the transition period. However, determinations of

equivalence will be made following this exchange of lists and, indeed,

will be a continuous feature of MRA implementation.

35. One comment suggested that Sec. 26.37 be revised to include the

frequency of workshops and seminars throughout the transitional and

operational phases.

FDA agrees that workshops and seminars are important. However,

provisions for the frequency of workshops and seminars are not

appropriate for inclusion in a rule. Furthermore, available resources

will determine the frequency of joint training and seminars. FDA will

continue to explore cost effective means, such as audio/video

conferences and videotape training, to enhance the expertise of the CAB

representatives. As stated earlier, an FDA training program for EC

CAB's has been tentatively scheduled for October 14 to 16, 1998, in the

Washington, DC area.

36. One comment said that Sec. 26.46(c) implies that the

designation of additional CAB's in the operational phase will occur

only once each year. This comment went on to suggest that, if expansion

of the CAB list is expected to be an annual event, then Sec. 26.66(b)

should so state.

FDA believes the language in Sec. 26.46(b) is sufficiently clear,

and that there is no need for change in the regulatory provisions

cited.

37. One comment suggested that Sec. 26.65 be revised to state that,

``Designating authorities shall only designate CAB's where the primary

place of business is in the territory of the designating authority.''

FDA disagrees with the suggestion, as it would introduce an

unwarranted restriction into FDA's implementation of the MRA and this

regulation. In any case, even if FDA were to adopt the comment's

suggestion, the intended purpose of the suggested change could easily

be overcome if a U.S. division of a foreign CAB simply formed a new

corporation, under the law of a U.S. State, with the United States as

the principal place of business.

38. One comment noted that medical devices principally regulated by

FDA's Center for Biologics Evaluation and Research (CBER) appear to

have been excluded from the MRA.

The comment is correct in noting that no CBER-regulated devices are

included in the lists appended to the Sectoral Annex on Medical

Devices. CBER has the lead responsibility for 510(k) review for 23

medical device classifications. Adding some of these devices to the

list of devices that FDA wishes to make eligible for review under the

Annex, at this time, would require establishment of special handling

procedures, training, and monitoring within CBER without the

expectation of a meaningful number

[[Page 60137]]

of third party reviews. However, devices regulated by CBER under the

device premarket notification provisions of the act (21 CFR 360(k))

might be considered for eligibility in the MRA program as experience

and confidence develops.

39. A comment addressed issues of grammar and format and did not

deal with substantive matters relevant to the MRA that would have any

bearing on its content, issues, or outcome.

FDA declines to alter the text of the proposed rule in response to

this comment. Throughout this rulemaking process FDA has attempted to

adhere to the language contained in the MRA unless serious substantive

matters were identified having bearing on the content, issues, or

outcome of the MRA or this regulation. The nonsubstantive issues raised

by this comment do not justify any amendments to this regulation.

III. Summary of Changes

1. In response to a comment, the title of the proposed regulation

has been changed to the following: ``Part 26--Mutual Recognition of

Pharmaceutical Good Manufacturing Practice Reports, Medical Device

Quality System Audit Reports, and Certain Medical Device Product

Evaluation Reports: the United States and the European Community.''

2. On its own initiative, FDA has determined that the language of

proposed Sec. 26.0 should be amended to provide additional and more

precise explanation about the applicability of this regulation with

regard to other U.S. agencies and the EC. Therefore, proposed Sec. 26.0

has been amended to read as follows:

Section 26.0 General.

This part substantially reflects relevant provisions of the

framework agreement and its sectoral annexes on pharmaceutical good

manufacturing practices (GMP's) and medical devices entitled

``Agreement on Mutual Recognition Between the United States of

America and the European Community'' (the MRA), signed in London on

May 18, 1998. For codification purposes, certain provisions of the

MRA have been modified for use in this part. This modification is

done for purposes of clarity only and shall not affect the text of

the MRA concluded between the United States and the European

Community (EC), or the rights and obligations of the United States

or the EC under that agreement. Whereas the parties to the MRA are

the United States and the European Community (EC), this part is

relevant only to the Food and Drug Administration's (FDA's)

implementation of the MRA, including the sectoral annexes reflected

in subparts A and B of this part. This part does not govern

implementation of the MRA by the EC, which will implement the MRA in

accordance with its internal procedures, nor does this part address

implementation of the MRA by other concerned U.S. Federal agencies.

For purposes of this part, the terms ``party'' or ``parties,'' where

relevant to FDA's implementation of the MRA, should be considered as

referring to FDA only. If the parties to the MRA subsequently amend

or terminate the MRA, FDA will modify this part accordingly, using

appropriate administrative procedures.

3. On its own initiative FDA has amended several sections of the

proposed rule to more accurately describe the relationship between the

provisions of this part and the provisions of the MRA. Specifically,

Secs. 26.6(d), 26.61, 26.73, 26.78, 26.79, and 26.81(d) have been

appropriately changed to accomplish this purpose.

4. In response to one comment, Table 1 of the proposed rule

concerning the product code for radiographic screens, Sec. 892.1960, is

amended in the final rule to reflect the correction of a typographical

error: ``WAM'' is changed to read ``EAM.''

5. Other typographical errors and nonsubstantive changes in the MRA

have been identified by FDA and the EC since the FDA proposed rule was

published on April 10, 1998. Because FDA has endeavored to have this

regulation reflect the text of the MRA as accurately as possible, the

final rule has been amended to reflect all of these nonsubstantive

changes. For example, in Sec. 26.4, the reference is now ``European

Community (EC), rather than ``European Union'' or ``EU,'' in accordance

with the preference of the EC. The EC is the correct entity, as the EU

is not a juridical entity.

6. The agency has amended the authority citation to refer to U.S.

statutes on confidentiality (5 U.S.C. 552, 18 U.S.C. 1905, and 21

U.S.C. 331) as well as the new accredited persons provisions of the act

(section 523, 21 U.S.C. 360m) added by FDAMA.

7. Under Appendix E of Subpart A (Elements to be Considered in

Developing a Two-Way Alert System), for administrative reasons the

contact points for FDA are changed from ``FDA's Division of Emergency

and Investigational Operations'' to the following:

Biologics: Director, Office of Compliance and Biologics Quality

(HFM-600), 1401 Rockville Pike, Rockville, MD 20852, phone: 301-827-

6190, fax: 301-594-1944.

Human Drugs: Director, Office of Compliance (HFD-300), MPN I,

7520 Standish Pl., Rockville, MD 20855-2737, phone: 301-594-0054,

fax: 301-594-2114.

Veterinary Drugs: Director, Office of Surveillance and

Compliance (HFV-200), MPN II, 7500 Standish Pl., Rockville, MD

20855-2773, phone: 301-827-6644, fax: 301-594-1807.

8. Under Sec. 26.1(c), the definition of Good Manufacturing

Practices (GMP's) has been changed from the following:

(c) Good Manufacturing Practices (GMP's): [These GMP conceptual

definitions are to be merged by the parties at a future date.]

(1) GMP's mean the requirements found in the respective

legislations, regulations, and administrative provisions for methods

to be used in, and the facilities or controls to be used for, the

manufacturing, processing, packing, and/or holding of a drug to

assure that such drug meets the requirements as to safety, and has

the identity and strength, and meets the quality and purity

characteristics that it purports or is represented to possess.

(2) GMP's are that part of quality assurance which ensures that

products are consistently produced and controlled to quality

standards. For the purpose of this subpart, GMP's include,

therefore, the system whereby the manufacturer receives the

specifications of the product and/or process from the marketing

authorization/product authorization or license holder or applicant

and ensures the product is made in compliance with its

specifications (qualified person certification in the European

Community (EC)).

to the following:

(c) Good Manufacturing Practices (GMP's): [The United States

has clarified its interpretation that under the MRA, that only

paragraph (c)(1) of this section has to be understood as the U.S.

definition and paragraph (c)(2) as the EC definition.]

(1) GMP's mean the requirements found in the legislations,

regulations, and administrative provisions for methods to be used

in, and the facilities or controls to be used for, the

manufacturing, processing, packing, and/or holding of a drug to

assure that such drug meets the requirements as to safety, and has

the identity and strength, and meets the quality and purity

characteristics that it purports or is represented to possess.

(2) GMP's are that part of quality assurance which ensures that

products are consistently produced and controlled to quality

standards. For the purpose of this subpart, GMP's include,

therefore, the system whereby the manufacturer receives the

specifications of the product and/or process from the marketing

authorization/product authorization or license holder or applicant

and ensures the product is made in compliance with its

specifications (qualified person certification in the EC).

The previous changes reflect discussions between FDA and European

Commission officials. As a result of those discussions, the United

States has clarified its interpretation that the first paragraph of

Article 1(3) of the Sectoral Annex for Pharmaceutical GMP's, has to be

understood as the U.S. definition and the second as the EC definition.

The agency believes that these changes are appropriate because they

clarify that the applicable definition under the MRA

[[Page 60138]]

will be consistent with the act and regulations (see, e.g., section

501(a)(2)(B) of the act; 21 U.S.C. 351(a)(2)(B)). Furthermore, the

Sectoral Annex on Pharmaceutical GMP's, including its core concept of

``equivalence,'' does not require either party to change its definition

or application of GMP's.

9. Changes have been made to the list of regulatory authorities

contained in Appendix B of Subpart A (List of Authorities) as a result

of the legal review carried out in the EC prior to finalizing the MRA.

The European Commission amended its list of regulatory authorities

contained in Appendix 2 of the Pharmaceutical GMP Annex of the MRA

because the changes more correctly reflect the allocation of

administrative competencies in the EC and its Member States and do not

alter the activities to be carried out under the MRA.

10. Changes have been made to Table 2. of Appendix B of Subpart B

of the rule. That table listed 42 class II medical devices to be

included within the scope of product coverage at the beginning of the

transition period. Four of the devices that were on the list cannot be

reviewed by conformity assessment bodies under the MRA and this rule,

because of a statutory prohibition in the act. Accordingly, the

agreement will be brought into force without application to those four

devices. Section 523 of the act prohibits ``accredited persons'' from

performing review of a class II device that is intended to be

permanently implantable, life sustaining, or life supporting, and

review of such devices must be performed by FDA. This provision was

recently added to the act by FDAMA. The agency recently determined that

the following four devices are within the scope of the prohibition and

have been removed from Table 2: AN 868.5925, powered emergency

ventilator; OR 888.3020, intramedullary fixation rod; OR 888.3030,

single/multiple component metallic bone fixation appliances and

accessories; and OR 888.3040, smooth or threaded metallic bone fixation

fastener. The United States has informed the EC of this situation and

of the need to make appropriate amendments to the MRA promptly after

its entry into force.

IV. Analysis of Impacts

FDA has examined the impacts of the final rule under Executive

Order 12866, under the Regulatory Flexibility Act (Pub. L. 96-354, as

amended by Pub. L. 104-121), and under the Unfunded Mandates Reform Act

(Pub. L. 104-4). 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 Regulatory Flexibility Act requires agencies to analyze

regulatory options that would minimize any significant economic impact

of a rule on a substantial number of small entities. The Unfunded

Mandates Reform Act requires agencies to prepare an assessment of

anticipated costs and benefits before enacting any rule that may result

in an expenditure by State, local and tribal governments, in the

aggregate, or by the private sector, of $100 million (adjusted annually

for inflation) in any 1 year.

The agency believes that this final rule is consistent with the

regulatory philosophy and principles identified in the Executive Order

and in these two statutes. Through this regulation, the agency sets out

requirements through which it may normally endorse certain conformity

assessment procedure reports. Such reports would be provided by

equivalent EC Member State regulatory authorities for manufacturing

site inspections to ascertain conformity with pharmaceutical GMP's and

by equivalent CAB's for quality system audits and certain medical

device premarket evaluations. Obtaining conformity assessment

information in the manner described in the final rule is more efficient

and cost-effective than the existing approach, where additional

inspection efforts by FDA in foreign countries are necessary because

foreign regulatory systems have not been found equivalent. The primary

benefit of the final rule is to provide credible assurance that the

increasing volume of EC Member States' imports into the United States

meet pharmaceutical GMP requirements, and medical device quality system

evaluation and certain premarket evaluation requirements, as specified

in U.S. statutes and regulations. In the future, this credible

assurance must be achievable with FDA resource expenditures that rise

less than proportionately to the volume of trade.

In recent years, the credibility of the current approach has been

strained as FDA's essentially constant foreign inspection capacity has

been stretched over an expanding volume of imports from the EC. In the

3-year interval between 1994 and 1997, the value of EC pharmaceutical

and medical device imports into the United States has nearly doubled

from $5.5 billion to more than $10.7 billion. Growth has been greatest

in pharmaceuticals, where annual EC exports have increased by more than

$2 billion in each of the last 2 years. In 1997, FDA conducted one

inspection in the EC for every $60 million in pharmaceutical exports to

the United States, which is less than half the coverage intensity of

1994. In addition, the majority of these inspections have been

preapproval in nature. Continuation of the current trend would further

decrease FDA's coverage intensity to less than one inspection per $100

million in EC pharmaceutical exports by the year 2000. Equivalence with

EC Member State regulatory systems would leverage FDA's regulatory

resources so that necessary conformity assessments can be ensured

despite higher volumes of future trade.

In addition to helping FDA cope with higher trade volumes, mutual

recognition or equivalence-based agreements with exporting nations may

permit FDA to redirect some of its inspectional resources to risk

priorities not covered by such agreements. This flexibility would

provide a more responsive level of U.S. consumer protection in the face

of a changing global marketplace with inherently variable risk

management priorities.

Another important benefit of the final rule would be the cost

savings realized by the regulated industry, largely as a result of the

sharing of inspection reports among equivalent regulatory authorities.

This exchange, in turn, will minimize the need for duplicative

inspections and permit individual firms to undergo fewer inspections of

manufacturing sites. FDA does not have data on the average

administrative cost incurred by manufacturers of pharmaceuticals

(including biologicals) or medical devices as they participate in

regulatory inspections, but it is likely that the avoidance of

redundant inspections would generate cost savings. The final rule also

may shorten product review times for regulated products as a result of

the increased efficiency of premarket approval inspection activities

and the third-party evaluation of certain medical devices.

Quantification of these savings will be highly dependent on the

specific countries that achieve equivalence and on the number of

medical device audits and evaluations performed by CAB's under the MRA.

The costs of this regulation will have a greater impact on

governmental regulatory agencies than on the regulated industry. These

governmental costs involve both startup and operational components. FDA

has not received additional government funding earmarked for achieving

mutual

[[Page 60139]]

recognition agreements and, therefore, must proceed to implement these

agreements as a concurrent function within normal day-to-day regulatory

activities. The 3-year transition period reflects the necessity to

absorb these startup costs within existing regulatory budgets. Some

activities such as joint inspections may be reasonably easy to absorb

as concurrent functions that do not require additional funding, while

others such as developing and maintaining systems for routine

information exchange may involve new activities. These absorbed

governmental costs will fall heavily on FDA, as it must assess

equivalence of multiple EC Member States and notified bodies.

For FDA, the absorption of these startup costs will be easier with

respect to those EC Member States with which the United States already

has a large volume of trade in the products in question, where FDA

already conducts enough inspections to have gathered a general

understanding of the requirements and regulatory practices of the

exporting country. From this perspective, the pace and priorities for

mutual recognition agreements during the transition period will be

affected by FDA's ability to conduct these processes as concurrent

functions within current activities.

In the longer run, an operational system of mutual recognition

agreements could pose additional costs or problems for regulatory

authorities of exporting countries if equivalence requires a frequency,

focus or content of inspections not presently included in regulatory

requirements of the exporting nation. For example, Country A may not be

able to provide the frequency of medical device inspections desired by

Country B without conducting inspections beyond those required for

Country A's domestic inspection strategy. Conversely, Country B may not

be able to provide to Country A adequate details of the quality of

pharmaceutical source materials, because Country B does not have

inspectional authority over pharmaceutical starting materials. To the

extent that such costs or problems are insignificant or offset by other

savings, they will not be obstacles to reaching agreement on

equivalence.

This rule is not expected to involve any new incremental costs to

the affected industries. Although joint inspections during the

transition period may create the appearance of more regulatory effort,

they would not impose additional costs on the firms inspected. FDA does

not anticipate an increase in the total number of EC inspections, and

in fact, the coverage intensity of FDA inspections in the EC would be

expected to continue to fall during the transition period, as it has

for the past several years. Other activities related to equivalence

determinations, such as the procedures for exchanging information and

reports, focus on the interface and coordination among regulatory

agencies and, as such, will not affect industry in a cost context.

The Regulatory Flexibility Act requires agencies to analyze

regulatory options that would minimize any significant impact of a rule

on small entities unless the rule is not expected to have a significant

economic impact on a substantial number of small entities. As this

final regulation is not expected to impose costs on the regulated

industry, and FDA has received no comments that would indicate

otherwise, the agency certifies that this rule will not have a

significant impact on a substantial number of small entities.

Therefore, under the Regulatory Flexibility Act, no further analysis is

required.

The Unfunded Mandates Act of 1995 requires that agencies prepare

an assessment of the anticipated costs and benefits before issuing any

final rule that may result in expenditures by State, local, and tribal

governments, in the aggregate, or by the private sector, of $100

million or more (adjusted annually for inflation) in any 1 year. This

rule does not impose any mandates on State, local or tribal

governments, or the private sector that would result in an annual

expenditure of $100 million or more. Therefore, no further analysis is

appropriate for this requirement.

V. Paperwork Reduction Act of 1995

This final rule does not contain any information collection

provisions that would be subject to review by the Office of Management

and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C.

3501-3520).

VI. References

1. The 1992 ``Report of the Task Force on International

Harmonization'' is available from the National Technical Information

Service, Vienna, VA; Order # PB93128155.

2. FDA's Compliance Policy Guides ``Sec. 100.900, International

Memoranda of Understanding (CPG 7150.19)'' is available from the

National Technical Information Service, Vienna, VA 22161 (Order # PB

96-915499INZ) or can be found on FDA's website at the following

location: ``www.fda.gov/ora/compliance__ref/cpg/

cpgch1.htm#sec.100.900''.

3. The 1997 ``Summary Report of the Foreign Inspection Working

Group'' is available from the Freedom of Information Staff (HFI-35),

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

20857.

VII. Comparison Table

The following table shows the relationship of the MRA Articles and

the sections of the Code of Federal Regulations (CFR) under this rule:

Table 1.-- Relationship of the MRA Articles to sections in the CFR

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

MRA Article CFR Section

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

Sectoral Annex for Pharmaceutical GMP's Subpart A

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

Article 1.............................. 26.1

Article 2.............................. 26.2

Article 3.............................. 26.3

Article 4.............................. 26.4

Article 5.............................. 26.5

Article 6.............................. 26.6

Article 7.............................. 26.7

Article 8.............................. 26.8

Article 9.............................. 26.9

Article 10............................. 26.10

Article 11............................. 26.11

Article 12............................. 26.12

Article 13............................. 26.13

Article 14............................. 26.14

Article 15............................. 26.15

[[Page 60140]]

Article 16............................. 26.16

Article 17............................. 26.17

Article 18............................. 26.18

Article 19............................. 26.19

Article 20............................. 26.20

Article 21............................. 26.21

Appendix 1............................. Appendix A

Appendix 2............................. Appendix B

Appendix 3............................. Appendix C

Appendix 4............................. Appendix D

Appendix 5............................. Appendix E

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

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

MRA Article CFR Section

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

Sectoral Annex on Medical Devices Subpart B

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

Article 1.............................. 26.31

Article 2.............................. 26.32

Article 3.............................. 26.33

Article 4.............................. 26.34

Article 5.............................. 26.35

Article 6.............................. 26.36

Article 7.............................. 26.37

Article 8.............................. 26.38

Article 9.............................. 26.39

Article 10............................. 26.40

Article 11............................. 26.41

Article 12............................. 26.42

Article 13............................. 26.43

Article 14............................. 26.44

Article 15............................. 26.45

Article 16............................. 26.46

Article 17............................. 26.47

Article 18............................. 26.48

Article 19............................. 26.49

Article 20............................. 26.50

Appendix 1............................. Appendix A

Appendix 2 and Tables 1-3.............. Appendix B and Tables 1-3

Appendix 3 [Reserved].................. Appendix C [Reserved]

Appendix 4 [Reserved].................. Appendix D [Reserved]

Appendix 5 [Reserved].................. Appendix E [Reserved]

Appendix 6 [Reserved].................. Appendix F [Reserved]

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

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

MRA Article CFR Section

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

Framework Agreement Subpart C

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

Article 1.............................. 26.60

Article 2.............................. 26.61

Article 3.............................. 26.62

Article 4.............................. 26.63

Article 5.............................. 26.64

Article 6.............................. 26.65

Article 7.............................. 26.66

Article 8.............................. 26.67

Article 9.............................. 26.68

Article 10............................. 26.69

Article 11............................. 26.70

Article 12............................. 26.71

Article 13............................. 26.72

Article 14............................. 26.73

Article 15............................. 26.74

Article 16............................. 26.75

Article 17............................. 26.76

Article 18............................. 26.77

[[Page 60141]]

Article 19............................. 26.78

Article 20............................. 26.79

Article 21............................. 26.80

Article 22............................. 26.81

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

List of Subjects in 21 CFR Part 26

Animal and human drugs, Biologicals, Devices, Exports, Imports,

Incorporation by reference, and Inspections.

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

Public Health Service Act and under authority delegated to the

Commissioner of Food and Drugs, 21 CFR chapter I is amended by adding

part 26 to read as follows:

PART 26--MUTUAL RECOGNITION OF PHARMACEUTICAL GOOD MANUFACTURING

PRACTICE REPORTS, MEDICAL DEVICE QUALITY SYSTEM AUDIT REPORTS, AND

CERTAIN MEDICAL DEVICE PRODUCT EVALUATION REPORTS: UNITED STATES

AND THE EUROPEAN COMMUNITY

Sec.

26.0 General.

Subpart A--Specific Sector Provisions for Pharmaceutical Good

Manufacturing Practices

26.1 Definitions.

26.2 Purpose.

26.3 Scope.

26.4 Product coverage.

26.5 Length of transition period.

26.6 Equivalence assessment.

26.7 Participation in the equivalence assessment and

determination.

26.8 Other transition activities.

26.9 Equivalence determination.

26.10 Regulatory authorities not listed as currently equivalent.

26.11 Start of operational period.

26.12 Nature of recognition of inspection reports.

26.13 Transmission of postapproval inspection reports.

26.14 Transmission of preapproval inspection reports.

26.15 Monitoring continued equivalence.

26.16 Suspension.

26.17 Role and composition of the Joint Sectoral Committee.

26.18 Regulatory collaboration.

26.19 Information relating to quality aspects.

26.20 Alert system.

26.21 Safeguard clause.

Appendix A of Subpart A--List of Applicable Laws, Regulations, and

Administrative Provisions.

Appendix B of Subpart A--List of Authorities.

Appendix C of Subpart A--Indicative List of Products Covered by

Subpart A.

Appendix D of Subpart A--Criteria for Assessing Equivalence for

Post- and Preapproval.

Appendix E of Subpart A--Elements to be Considered in Developing a

Two-Way Alert System.

Subpart B--Specific Sector Provisions for Medical Devices

26.31 Purpose.

26.32 Scope.

26.33 Product coverage.

26.34 Regulatory authorities.

26.35 Length and purpose of transition period.

26.36 Listing of CAB's.

26.37 Confidence building activities.

26.38 Other transition period activities.

26.39 Equivalence assessment.

26.40 Start of the operational period.

26.41 Exchange and endorsement of quality system evaluation

reports.

26.42 Exchange and endorsement of product evaluation reports.

26.43 Transmission of quality system evaluation reports.

26.44 Transmission of product evaluation reports.

26.45 Monitoring continued equivalence.

26.46 Listing of additional CAB's.

26.47 Role and composition of the Joint Sectoral Committee.

26.48 Harmonization.

26.49 Regulatory cooperation.

26.50 Alert system and exchange of postmarket vigilance reports.

Appendix A of Subpart B--Relevant Legislation, Regulations, and

Procedures.

Appendix B of Subpart B--Scope of Product Coverage.

Appendix C of Subpart B [Reserved].

Appendix D of Subpart B [Reserved].

Appendix E of Subpart B [Reserved].

Appendix F of Subpart B [Reserved].

Subpart C--``Framework'' Provisions

26.60 Definitions.

26.61 Purpose of this part.

26.62 General obligations.

26.63 General coverage of this part.

26.64 Transitional arrangements.

26.65 Designating authorities.

26.66 Designation and listing procedures.

26.67 Suspension of listed conformity assessment bodies.

26.68 Withdrawal of listed conformity assessment bodies.

26.69 Monitoring of conformity assessment bodies.

26.70 Conformity assessment bodies.

26.71 Exchange of information.

26.72 Sectoral contact points.

26.73 Joint Committee.

26.74 Preservation of regulatory authority.

26.75 Suspension of recognition obligations.

26.76 Confidentiality.

26.77 Fees.

26.78 Agreements with other countries.

26.79 Territorial application.

26.80 Entry into force, amendment, and termination.

26.81 Final provisions.

Authority: 5 U.S.C. 552; 15 U.S.C. 1453, 1454, 1455; 18 U.S.C.

1905; 21 U.S.C. 321, 331, 351, 352, 355, 360, 360b, 360c, 360d,

360e, 360f, 360g, 360h, 360i, 360j, 360l, 360m, 371, 374, 381, 382,

383, 393; 42 U.S.C. 216, 241, 242l, 262, 264, 265.

Sec. 26.0 General.

This part substantially reflects relevant provisions of the

framework agreement and its sectoral annexes on pharmaceutical good

manufacturing practices (GMP's) and medical devices of the ``Agreement

on Mutual Recognition Between the United States of America and the

European Community'' (the MRA), signed at London May 18, 1998. For

codification purposes, certain provisions of the MRA have been modified

for use in this part. This modification is done for purposes of clarity

only and shall not affect the text of the MRA concluded between the

United States and the European Community (EC), or the rights and

obligations of the United States or the EC under that agreement.

Whereas the parties to the MRA are the United States and EC, this part

is relevant only to the Food and Drug Administration's (FDA's)

implementation of the MRA, including the sectoral annexes reflected in

subparts A and B of this part. This part does not govern implementation

of the MRA by the EC, which will implement the MRA in accordance with

its internal procedures, nor does this part address implementation of

the MRA by other concerned U.S. Federal agencies. For purposes of this

part, the terms ``party'' or ``parties,'' where relevant to FDA's

implementation of the MRA, should be considered as referring to FDA

only. If the parties to the MRA subsequently amend or terminate the

MRA, FDA will modify this part accordingly, using appropriate

administrative procedures.

[[Page 60142]]

Subpart A--Specific Sector Provisions for Pharmaceutical Good

Manufacturing Practices

Sec. 26.1 Definitions.

(a) Enforcement means action taken by an authority to protect the

public from products of suspect quality, safety, and effectiveness or

to assure that products are manufactured in compliance with appropriate

laws, regulations, standards, and commitments made as part of the

approval to market a product.

(b) Equivalence of the regulatory systems means that the systems

are sufficiently comparable to assure that the process of inspection

and the ensuing inspection reports will provide adequate information to

determine whether respective statutory and regulatory requirements of

the authorities have been fulfilled. Equivalence does not require that

the respective regulatory systems have identical procedures.

(c) Good Manufacturing Practices (GMP's). [The United States has

clarified its interpretation that under the MRA, that only paragraph

(c)(1) of this section has to be understood as the U.S. definition and

paragraph (c)(2) as the EC definition.]

(1) GMP's mean the requirements found in the legislations,

regulations, and administrative provisions for methods to be used in,

and the facilities or controls to be used for, the manufacturing,

processing, packing, and/or holding of a drug to assure that such drug

meets the requirements as to safety, and has the identity and strength,

and meets the quality and purity characteristics that it purports or is

represented to possess.

(2) GMP's are that part of quality assurance which ensures that

products are consistently produced and controlled to quality standards.

For the purpose of this subpart, GMP's include, therefore, the system

whereby the manufacturer receives the specifications of the product

and/or process from the marketing authorization/product authorization

or license holder or applicant and ensures the product is made in

compliance with its specifications (qualified person certification in

the EC).

(d) Inspection means an onsite evaluation of a manufacturing

facility to determine whether such manufacturing facility is operating

in compliance with GMP's and/or commitments made as part of the

approval to market a product.

(e) Inspection report means the written observations and GMP's

compliance assessment completed by an authority listed in Appendix B of

this subpart.

(f) Regulatory system means the body of legal requirements for

GMP's, inspections, and enforcements that ensure public health

protection and legal authority to assure adherence to these

requirements.

Sec. 26.2 Purpose.

The provisions of this subpart govern the exchange between the

parties and normal endorsement by the receiving regulatory authority of

official good manufacturing practices (GMP's) inspection reports after

a transitional period aimed at determination of the equivalence of the

regulatory systems of the parties, which is the cornerstone of this

subpart.

Sec. 26.3 Scope.

(a) The provisions of this subpart shall apply to pharmaceutical

inspections carried out in the United States and Member States of the

European Community (EC) before products are marketed (hereafter

referred to as ``preapproval inspections'') as well as during their

marketing (hereafter referred to as ``postapproval inspections'').

(b) Appendix A of this subpart names the laws, regulations, and

administrative provisions governing these inspections and the good

manufacturing practices (GMP's) requirements.

(c) Appendix B of this subpart lists the authorities participating

in activities under this subpart.

(d) Sections 26.65, 26.66, 26.67, 26.68, 26.69, and 26.70 of

subpart C of this part do not apply to this subpart.

Sec. 26.4 Product coverage.

(a) The provisions of this subpart will apply to medicinal

products for human or animal use, intermediates and starting materials

(as referred to in the European Community (EC)) and to drugs for human

or animal use, biological products for human use, and active

pharmaceutical ingredients (as referred to in the United States), only

to the extent they are regulated by the authorities of both parties as

listed in Appendix B of this subpart.

(b) Human blood, human plasma, human tissues and organs, and

veterinary immunologicals (under 9 CFR 101.2, ``veterinary

immunologicals'' are referred to as ``veterinary biologicals'') are

excluded from the scope of this subpart. Human plasma derivatives (such

as immunoglobulins and albumin), investigational medicinal products/new

drugs, human radiopharmaceuticals, and medicinal gases are also

excluded during the transition phase; their situation will be

reconsidered at the end of the transition period. Products regulated by

the Food and Drug Administration's Center for Biologics Evaluation and

Research as devices are not covered under this subpart.

(c) Appendix C of this subpart contains an indicative list of

products covered by this subpart.

Sec. 26.5 Length of transition period.

A 3-year transition period will start immediately after the

effective date described in Sec. 26.80(a).

Sec. 26.6 Equivalence assessment.

(a) The criteria to be used by the parties to assess equivalence

are listed in Appendix D of this subpart. Information pertaining to the

criteria under European Community (EC) competence will be provided by

the EC.

(b) The authorities of the parties will establish and communicate

to each other their draft programs for assessing the equivalence of the

respective regulatory systems in terms of quality assurance of the

products and consumer protection. These programs will be carried out,

as deemed necessary by the regulatory authorities, for post- and

preapproval inspections and for various product classes or processes.

(c) The equivalence assessment shall include information exchanges

(including inspection reports), joint training, and joint inspections

for the purpose of assessing regulatory systems and the authorities'

capabilities. In conducting the equivalence assessment, the parties

will ensure that efforts are made to save resources.

(d) Equivalence assessment for authorities added to Appendix B of

this subpart after the effective date described in Sec. 26.80(a) will

be conducted as described in this subpart, as soon as practicable.

Sec. 26.7 Participation in the equivalence assessment and

determination.

The authorities listed in Appendix B of this subpart will actively

participate in these programs to build a sufficient body of evidence

for their equivalence determination. Both parties will exercise good

faith efforts to complete equivalence assessment as expeditiously as

possible to the extent the resources of the authorities allow.

Sec. 26.8 Other transition activities.

As soon as possible, the authorities will jointly determine the

essential information which must be present in inspection reports and

will cooperate to develop mutually agreed inspection report format(s).

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Sec. 26.9 Equivalence determination.

(a) Equivalence is established by having in place regulatory

systems covering the criteria referred to in Appendix D of this

subpart, and a demonstrated pattern of consistent performance in

accordance with these criteria. A list of authorities determined as

equivalent shall be agreed to by the Joint Sectoral Committee at the

end of the transition period, with reference to any limitation in terms

of inspection type (e.g., postapproval or preapproval) or product

classes or processes.

(b) The parties will document insufficient evidence of

equivalence, lack of opportunity to assess equivalence or a

determination of nonequivalence, in sufficient detail to allow the

authority being assessed to know how to attain equivalence.

Sec. 26.10 Regulatory authorities not listed as currently equivalent.

Authorities not currently listed as equivalent, or not equivalent

for certain types of inspections, product classes or processes may

apply for reconsideration of their status once the necessary corrective

measures have been taken or additional experience is gained.

Sec. 26.11 Start of operational period.

(a) The operational period shall start at the end of the

transition period and its provisions apply to inspection reports

generated by authorities listed as equivalent for the inspections

performed in their territory.

(b) In addition, when an authority is not listed as equivalent

based on adequate experience gained during the transition period, the

Food and Drug Administration (FDA) will accept for normal endorsement

(as provided in Sec. 26.12) inspection reports generated as a result of

inspections conducted jointly by that authority on its territory and

another authority listed as equivalent, provided that the authority of

the Member State in which the inspection is performed can guarantee

enforcement of the findings of the inspection report and require that

corrective measures be taken when necessary. FDA has the option to

participate in these inspections, and based on experience gained during

the transition period, the parties will agree on procedures for

exercising this option.

(c) In the European Community (EC), the qualified person will be

relieved of responsibility for carrying the controls laid down in

Article 22 paragraph 1(b) of Council Directive 75/319/EEC (see Appendix

A of this subpart) provided that these controls have been carried out

in the United States and that each batch/lot is accompanied by a batch

certificate (in accordance with the World Health Organization

Certification Scheme on the Quality of Medicinal Products) issued by

the manufacturer certifying that the product complies with requirements

of the marketing authorization and signed by the person responsible for

releasing the batch/lot.

Sec. 26.12 Nature of recognition of inspection reports.

(a) Inspection reports (containing information as established

under Sec. 26.8), including a good manufacturing practice (GMP)

compliance assessment, prepared by authorities listed as equivalent,

will be provided to the authority of the importing party. Based on the

determination of equivalence in light of the experience gained, these

inspection reports will normally be endorsed by the authority of the

importing party, except under specific and delineated circumstances.

Examples of such circumstances include indications of material

inconsistencies or inadequacies in an inspection report, quality

defects identified in the postmarket surveillance or other specific

evidence of serious concern in relation to product quality or consumer

safety. In such cases, the authority of the importing party may request

clarification from the authority of the exporting party which may lead

to a request for reinspection. The authorities will endeavor to respond

to requests for clarification in a timely manner.

(b) Where divergence is not clarified in this process, an

authority of the importing country may carry out an inspection of the

production facility.

Sec. 26.13 Transmission of postapproval inspection reports.

Postapproval good manufacturing practice (GMP) inspection reports

concerning products covered by this subpart will be transmitted to the

authority of the importing country within 60-calendar days of the

request. Should a new inspection be needed, the inspection report will

be transmitted within 90-calendar days of the request.

Sec. 26.14 Transmission of preapproval inspection reports.

(a) A preliminary notification that an inspection may have to take

place will be made as soon as possible.

(b) Within 15-calendar days, the relevant authority will

acknowledge receipt of the request and confirm its ability to carry out

the inspection. In the European Community (EC), requests will be sent

directly to the relevant authority, with a copy to the European Agency

for the Evaluation of Medicinal Products (EMEA). If the authority

receiving the request cannot carry out the inspection as requested, the

requesting authority shall have the right to conduct the inspection.

(c) Reports of preapproval inspections will be sent within 45-

calendar days of the request that transmitted the appropriate

information and detailed the precise issues to be addressed during the

inspection. A shorter time may be necessary in exceptional cases and

these will be described in the request.

Sec. 26.15 Monitoring continued equivalence.

Monitoring activities for the purpose of maintaining equivalence

shall include review of the exchange of inspection reports and their

quality and timeliness; performance of a limited number of joint

inspections; and the conduct of common training sessions.

Sec. 26.16 Suspension.

(a) Each party has the right to contest the equivalence of a

regulatory authority. This right will be exercised in an objective and

reasoned manner in writing to the other party.

(b) The issue shall be discussed in the Joint Sectoral Committee

promptly upon such notification. Where the Joint Sectoral Committee

determines that verification of equivalence is required, it may be

carried out jointly by the parties in a timely manner, under Sec. 26.6.

(c) Efforts will be made by the Joint Sectoral Committee to reach

unanimous consent on the appropriate action. If agreement to suspend is

reached in the Joint Sectoral Committee, an authority may be suspended

immediately thereafter. If no agreement is reached in the Joint

Sectoral Committee, the matter is referred to the Joint Committee as

described in Sec. 26.73. If no unanimous consent is reached within 30

days after such notification, the contested authority will be

suspended.

(d) Upon the suspension of authority previously listed as

equivalent, a party is no longer obligated to normally endorse the

inspection reports of the suspended authority. A party shall continue

to normally endorse the inspection reports of that authority prior to

suspension, unless the authority of the receiving party decides

otherwise based on health or safety considerations. The suspension will

remain in effect until unanimous consent has been reached by the

parties on the future status of that authority.

Sec. 26.17 Role and composition of the Joint Sectoral Committee.

(a) A Joint Sectoral Committee is set up to monitor the activities

under both the transitional and operational phases of this subpart.

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(b) The Joint Sectoral Committee will be cochaired by a

representative of the Food and Drug Administration (FDA) for the United

States and a representative of the European Community (EC) who each

will have one vote. Decisions will be taken by unanimous consent.

(c) The Joint Sectoral Committee's functions will include:

(1) Making a joint assessment, which must be agreed by both

parties, of the equivalence of the respective authorities;

(2) Developing and maintaining the list of equivalent authorities,

including any limitation in terms of inspecting type or products, and

communicating the list to all authorities and the Joint Committee;

(3) Providing a forum to discuss issues relating to this subpart,

including concerns that an authority may be no longer equivalent and

opportunity to review product coverage; and

(4) Consideration of the issue of suspension.

(d) The Joint Sectoral Committee shall meet at the request of

either party and, unless the cochairs otherwise agree, at least once

each year. The Joint Committee will be kept informed of the agenda and

conclusions of meetings of the Joint Sectoral Committee.

Sec. 26.18 Regulatory collaboration.

(a) The parties and authorities shall inform and consult one

another, as permitted by law, on proposals to introduce new controls or

to change existing technical regulations or inspection procedures and

to provide the opportunity to comment on such proposals.

(b) The parties shall notify each other in writing of any changes

to Appendix B of this subpart.

Sec. 26.19 Information relating to quality aspects.

The authorities will establish an appropriate means of exchanging

information on any confirmed problem reports, corrective actions,

recalls, rejected import consignments, and other regulatory and

enforcement problems for products subject to this subpart.

Sec. 26.20 Alert system.

(a) The details of an alert system will be developed during the

transitional period. The system will be maintained in place at all

times. Elements

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