Regulatory Hearing Before the Food and Drug Administration; General Provisions; Amendments

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary

A. Purpose of the Direct Final Rule

B. Summary of the Major Provisions of the Direct Final Rule

C. Legal Authority

D. Costs and Benefits

II. Direct Final Rulemaking Procedures

III. Background

IV. Legal Authority

V. Description of the Direct Final Rule

VI. Economic Analysis of Impacts

VII. Analysis of Environmental Impact

VIII. Paperwork Reduction Act of 1995

IX. Federalism

X. Consultation and Coordination With Indian Tribal Governments

I. Executive Summary

A. Purpose of the Direct Final Rule

FDA is issuing this direct final rule to amend § 16.1 (21 CFR 16.1) to revise the list of statutory provisions enumerated in the Scope section of the regulation and thus clarify the circumstances under which the Agency intends to use the procedures in part 16 (21 CFR part 16) for regulatory hearings. This rule revises the list in § 16.1 by removing one statutory reference and adding a different statutory reference under the same section of the same statute. Because we believe the rule contains noncontroversial changes and we do not expect significant adverse comment on the rulemaking, we are using direct final rulemaking procedures, as described in this document.

B. Summary of the Major Provisions of the Direct Final Rule

The direct final rule revises § 16.1, Scope, in order to clarify the circumstances under which the Agency intends to use the procedures in part 16 for regulatory hearings. The rule amends the list of statutory provisions enumerated in § 16.1. Specifically, the rule removes the reference to section 906(e)(1)(B) of the Federal Food, Drug, & Cosmetic Act (FD&C Act) (21 U.S.C. 387f(e)(1)(B)) (the statutory provision that requires FDA to afford an opportunity for an oral hearing prior to promulgating a tobacco product manufacturing practice (TPMP) requirements regulation) and adds a reference to section 906(e)(2)(E) of the FD&C Act (the statutory provision that provides a petitioner an opportunity for an informal hearing on an order issued on the petitioner's request for temporary or permanent exemption or variance from TPMP requirements).

C. Legal Authority

FDA is issuing this rule under provisions of the FD&C Act related to regulations and hearings (21 U.S.C. 371), and general provisions respecting control of tobacco products, (21 U.S.C. 387f(e)).

D. Costs and Benefits

This direct final rule clarifies the circumstances under which the Agency intends to use the procedures in part 16 for a regulatory hearing. Potentially affected entities would include manufacturers of finished and bulk tobacco products who choose to request an exemption or variance from TPMP requirements and are afforded an opportunity for a hearing on orders regarding such requests. Because this rule merely clarifies which of its existing procedures FDA intends to use when conducting certain types of hearings under the FD&C Act, costs and benefits of this rule are expected to be minimal.

II. Direct Final Rulemaking Procedures

In the document titled “Guidance for FDA and Industry: Direct Final Rule Procedures,” announced and provided in the Federal Register of November 21, 1997 (62 FR 62466), FDA described its procedures on when and how we will employ direct final rulemaking. The guidance may be accessed at https://www.fda.gov/RegulatoryInformation/Guidances/ucm125166.htm. We have determined that this rule is appropriate for direct final rulemaking because we believe that it includes only noncontroversial amendments and we anticipate no significant adverse comments. Consistent with our procedures on direct final rulemaking, FDA is also publishing elsewhere in this issue of the Federal Register a companion proposed rule to clarify when the Agency intends to use the procedures under the regulation for regulatory hearings before the Food and Drug Administration. The companion proposed rule provides a procedural framework within which the rule may be finalized in the event that the direct final rule is withdrawn because of any significant adverse comments. The comment period for the direct final rule runs concurrently with the comment period for the companion proposed rule. Any comments received in response to the companion proposed rule will be considered as comments regarding the direct final rule.

We are providing a comment period on the direct final rule of 75 days after the date of publication in the Federal Register . If we receive any significant adverse comments, we intend to withdraw this direct final rule before its effective date by publication of a notice in the Federal Register . A significant adverse comment is defined as a comment that explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. In determining whether an adverse comment is significant and warrants terminating a direct final rulemaking, we will consider whether the comment raises an issue serious enough to warrant a substantive response in a notice-and-comment process. Comments that are frivolous, insubstantial, or outside the scope of the rule will not be considered significant or adverse under this procedure. A comment recommending a regulation change in addition to those in this direct final rule would not be considered a significant adverse comment unless the comment states why the rule would be ineffective without the additional change. In addition, if a significant adverse comment applies to part of this rule and that part can be severed from the remainder of the rule, we may adopt as final those provisions of the rule that are not subject to the significant adverse comment.

If any significant adverse comments are received during the comment period, FDA will publish, before the effective date of this direct final rule, a notice of significant adverse comment and withdraw the direct final rule. If we withdraw the direct final rule, any comments received will be applied to the proposed rule and will be considered in developing a final rule using the usual notice-and-comment procedures.

If FDA receives no significant adverse comments during the specified comment period, FDA intends to publish a document confirming the effective date within 30 days after the comment period ends.

III. Background

Part 16 provides procedures for regulatory hearings held before FDA. The procedures in part 16 apply, among other circumstances, when a statute or regulation provides a person an opportunity for a hearing on a regulatory action. In 2012, FDA amended part 16 to add several statutory and regulatory provisions throughout 21 CFR parts 1, 7, and 16, to include reference to tobacco products, where appropriate, so that tobacco products would be subject to the same general requirements that apply to other FDA-regulated products. The 2012 amendments revised § 16.1, which governs the scope of part 16, to include references to certain sections of the FD&C Act that provide an opportunity for a hearing. Among other changes, the 2012 amendments added a reference to section 906(e)(1)(B) of the FD&C Act to § 16.1. This rule further amends § 16.1, as described below.

The Agency is amending the list of statutory provisions enumerated in § 16.1(b)(1) by removing the reference to section 906(e)(1)(B) and adding a reference to section 906(e)(2)(E) of the FD&C Act. The list of statutory provisions enumerated in § 16.1(b)(1) included section 906(e)(1)(B) of the FD&C Act, which requires FDA to afford the public an opportunity for an oral hearing before issuing any TPMP requirements regulation. The purpose of an oral hearing under section 906(e)(1)(B) of the FD&C Act is to allow the public to provide viewpoints, opinions, and information on proposed TPMP rules. The procedures under part 16 are not in alignment with the purpose and goals of the oral hearing required under section 906(e)(1)(B) of the FD&C Act. For example, part 16 includes procedures to resolve a “genuine and substantial issue of fact” that is in dispute and the right to confront and cross-examine witnesses, which are not well suited for allowing the public to provide viewpoints, opinions, and information to FDA regarding TPMP rules. Accordingly, FDA is removing the reference to section 906(e)(1)(B) of the FD&C Act from part 16 as other available procedures are better suited to achieve its purposes.

The Agency is also adding a reference to section 906(e)(2)(E) of the FD&C Act to § 16.1(b)(1). Section 906(e)(2)(E) of the FD&C Act provides an opportunity for an informal hearing after the issuance of an order related to a petitioner's request for a temporary or permanent exemption or variance from TPMP requirements. The list of statutory provisions in § 16.1(b)(1) that specifies the statutory and regulatory provisions under which regulatory hearings under part 16 are available did not previously include section 906(e)(2)(E) of the FD&C Act. FDA is adding this reference to clarify that it intends to use the procedures in part 16 when conducting such hearings.

FDA is amending § 16.1 to clarify when it intends to use the procedures in part 16 for regulatory hearings. The amended rule is more consistent with the statute as it aligns the purposes of the two hearings referenced above with more appropriate hearing procedures under FDA's regulations. It also clarifies the availability of hearings under part 16 to tobacco product manufacturers.

IV. Legal Authority

FDA is issuing this rule under provisions of the FD&C Act related to regulations and hearings (21 U.S.C. 371), and general provisions respecting control of tobacco products (21 U.S.C. 387f). Section 701 (21 U.S.C. 371) vests FDA with “the authority to promulgate regulations for the efficient enforcement of [the FD&C Act].” Section 906(e) of the FD&C Act includes provisions regarding TPMP requirements regulations and temporary and permanent exemptions and variances from TPMP requirements.

V. Description of the Direct Final Rule

We are revising § 16.1, Scope, to remove a reference to “Section 906(e)(1)(B) of the FD&C Act relating to the establishment of good manufacturing practice requirements for tobacco products” and add a reference to “Section 906(e)(2)(E) of the FD&C Act relating to exemptions or variances from tobacco product manufacturing practice requirements.” The amended rule clarifies the availability of the procedures in part 16 for regulatory hearings to include situations when a petitioner has requested a temporary or permanent exemption or variance from TPMP requirements.

VI. Economic Analysis of Impacts

We have examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, Executive Order 14094, the Regulatory Flexibility Act (5 U.S.C. 601-612), the Congressional Review Act/Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801, Pub. L. 104-121), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

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

Because this rule is not likely to result in an annual effect on the economy of $100 million or more or meets other criteria specified in the Congressional Review Act/Small Business Regulatory Enforcement Fairness Act, OIRA has determined that this rule does not fall within the scope of 5 U.S.C. 804(2).

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this rule merely clarifies which of its existing procedures FDA intends to use when conducting certain types of hearings under the FD&C Act, we certify that the final rule will not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes estimates of anticipated impacts, before issuing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $183 million, using the most current (2023) Implicit Price Deflator for the Gross Domestic Product. This final rule will not result in an expenditure in any year that meets or exceeds this amount.

This rule clarifies the procedures FDA intends to use when conducting certain types of hearings under the FD&C Act. When the TPMP rule becomes final and effective, potentially affected entities, including manufacturers of finished and bulk tobacco products, who choose to request an exemption or variance from TPMP requirements would be afforded an opportunity for a hearing on orders regarding such requests.

We do not know how many manufacturers would pursue petitioning for an exemption or variance from TPMP requirements, once the Agency has published a final TPMP rule to establish such requirements and that rule is in effect, nor do we know how many requirements may be included in each petition. We reason that a manufacturer would petition for an exemption or variance from a TPMP requirement only if compliance with said requirement is not a financially viable choice compared to the cost of a filing a petition. Because this rule merely clarifies which of its existing procedures FDA intends to use when conducting certain types of hearings under the FD&C Act, costs and benefits of this rule are expected to be minimal.

VII. Analysis of Environmental Impact

We have determined under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

VIII. Paperwork Reduction Act of 1995

This direct final rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

IX. Federalism

We have analyzed this direct final rule in accordance with the principles set forth in Executive Order 13132. We have determined that this direct final rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, we conclude that the rule does not contain policies that have federalism implications as defined in the Executive Order and, consequently, a federalism summary impact statement is not required.

X. Consultation and Coordination With Indian Tribal Governments

We have analyzed this direct final rule in accordance with the principles set forth in Executive Order 13175. We have determined that the rule does not contain policies that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Accordingly, we conclude that the rule does not contain policies that have tribal implications as defined in the Executive Order and, consequently, a tribal summary impact statement is not required.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 16 is amended as follows:

1. The authority citation for part 16 continues to read as follows:

Authority: 15 U.S.C. 1451-1461; 21 U.S.C. 141-149, 321-394, 467f, 679, 821, 1034; 28 U.S.C. 2112; 42 U.S.C. 201-262, 263b, 364.

2. Amend § 16.1 by revising paragraph (b)(1) to read as follows:

(b) * * *

(1) The statutory provisions are as follows: