Index of Legally Marketed Unapproved New Animal Drugs for Minor Species, 69108-69131 [E7-23580]

Agencies

• Food and Drug Administration
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 72, Number 234 (Thursday, December 6, 2007)]
[Rules and Regulations]
[Pages 69108-69131]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-23580]



[[Page 69107]]

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Part IV





Department of Health and Human Services





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Food and Drug Administration



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21 CFR Parts 20, 25, 201, et al.



Index of Legally Marketed Unapproved New Animal Drugs for Minor 
Species; Final Rule

Federal Register / Vol. 72, No. 234 / Thursday, December 6, 2007 / 
Rules and Regulations

[[Page 69108]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 20, 25, 201, 202, 207, 225, 226, 500, 510, 511, 515, 
516, 558, and 589

[Docket No. 2006N-0067]
RIN 0910-AF67


Index of Legally Marketed Unapproved New Animal Drugs for Minor 
Species

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule.

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SUMMARY: The Minor Use and Minor Species Animal Health Act of 2004 
(MUMS act) amended the Federal Food, Drug, and Cosmetic Act (the act) 
to authorize the U.S. Food and Drug Administration (FDA, the agency) to 
establish new regulatory procedures that provide incentives intended to 
make more drugs legally available to veterinarians and animal owners 
for the treatment of minor animal species and uncommon diseases in 
major animal species. At this time, FDA is issuing final regulations to 
implement section 572 of the act entitled ``Index of Legally Marketed 
Unapproved New Animal Drugs for Minor Species.'' These regulations 
establish administrative procedures and criteria for index listing a 
new animal drug for use in a minor species. Such indexing provides a 
basis for legally marketing an unapproved new animal drug intended for 
use in a minor species.

DATES: This rule is effective February 19, 2008.

FOR FURTHER INFORMATION CONTACT: Bernadette Dunham, Center for 
Veterinary Medicine (HFV-50), Food and Drug Administration, 7519 
Standish Pl., Rockville, MD 20855, 240-276-9090, e-mail: 
Bernadette.Dunham@fda.hhs.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    In enacting the MUMS act (Pub. L. 108-282), Congress sought to 
encourage the development of animal drugs that are currently 
unavailable to minor species (species other than cattle, horses, swine, 
chickens, turkeys, dogs, and cats) in the United States or to major 
species afflicted with uncommon diseases or conditions (minor use). 
Congress recognized that the markets for drugs intended to treat these 
species, diseases, or conditions are so small that there are often 
insufficient economic incentives to motivate sponsors to develop data 
to support approvals. Further, Congress recognized that some minor 
species populations are too small or their management systems too 
diverse to make it practical to conduct traditional studies to 
demonstrate safety and effectiveness of animal drugs for such uses. As 
a result of these limitations, sponsors have generally not been willing 
or able to collect data to support legal marketing of drugs for these 
species, diseases, or conditions. Consequently, Congress enacted the 
MUMS act, which amended the Federal Food, Drug, and Cosmetic Act to 
provide incentives to develop new animal drugs for minor species and 
minor use, while still ensuring appropriate safeguards for animal and 
human health.
    The major incentives of the MUMS act include the following:
    (1) Designation, established by section 573 of the act (21 U.S.C. 
360ccc-2), which provides for eligibility for grants and contracts to 
defray the costs of qualified safety and effectiveness testing expenses 
and manufacturing expenses incurred in the development of designated 
new animal drugs. Designation also provides for eligibility for a 7-
year period of exclusive marketing rights to enable sponsors to recover 
costs of drug development without competition. FDA published final 
regulations implementing the designation provision of the act on July 
26, 2007 (72 FR 41010) (the designation final rule).
    (2) Conditional approval, established by section 571 of the act (21 
U.S.C. 360ccc), which provides for animal drug marketing after all 
safety and manufacturing components of a new animal drug approval have 
met the standards of section 512 of the act (21 U.S.C. 360b). For the 
effectiveness component, a reasonable expectation of effectiveness must 
be established, after which sponsors have up to 5 years to complete the 
demonstration of effectiveness by the standards of section 512 of the 
act and achieve a full approval. Regulations to implement the 
conditional approval provision will be proposed in the future.
    (3) Indexing, established under section 572 of the act (21 U.S.C. 
360ccc-1), which provides for the legal marketing of unapproved new 
animal drugs intended for use in a minor species through an integrated 
process of agency and expert panel review.
    At this time, FDA is issuing final regulations implementing the 
indexing provisions of the MUMS act. These regulations establish 
procedures and criteria for index listing a new animal drug for use in 
a minor species. They describe a process whereby the agency makes a 
determination regarding the following: (1) The eligibility of a new 
animal drug, (2) the selection of a qualified expert panel, and (3) the 
findings of the qualified expert panel.
    In the Federal Register of August 22, 2006 (71 FR 48840), FDA 
issued proposed regulations to implement section 572 of the act (21 
U.S.C. 360ccc-1). The proposed rule initially provided for a 90-day 
public comment period during which the agency received several comments 
asserting that 90 days was not an adequate amount of time to prepare 
and submit meaningful comments. In response to this, in the Federal 
Register of October 2, 2006 (71 FR 57892), FDA extended the comment 
period allowing an additional 30 days of public comment.

II. Major Changes to the Proposed Rule

    After considering public comments FDA has made the following 
changes to the proposed rule:
    In Sec.  516.123, paragraph (b) has been revised to read: ``The 
written notice will include information for scheduling the informal 
conference and state that a written request for a conference must be 
made within 60 days of the date FDA sends its notice.'' Also, paragraph 
(c) has been revised to read: ``Within 45 days of receiving a request 
for an informal conference, FDA will schedule and hold the informal 
conference at a time agreeable to both FDA and the person making the 
request.''
    In Sec.  516.123, proposed paragraphs (j) and (l)(3) have been 
deleted and paragraph (k) has been revised to read: ``The presiding 
officer will prepare a written report regarding the subject of the 
informal conference that states and describes the basis for his or her 
findings. Whenever time permits, the parties to the informal conference 
will have 30 days to review and comment on the report.''
    In section 516.141, paragraph (b)(1) has been revised to read: ``A 
qualified expert panel member must be an expert qualified by training 
and experience to evaluate a significant aspect of target animal safety 
or effectiveness of the new animal drug under consideration.''
    In addition, FDA has made two technical corrections to the proposed 
rule. The first one is in part 25 (21 CFR part 25). An amendment to 
Sec.  25.33 was proposed as a conforming change to add index listed 
drugs to the list of actions for animal drugs which may be 
categorically excluded from the preparation of an environmental 
assessment. However, the agency neglected to propose a corresponding 
amendment to Sec.  25.20 to also add index

[[Page 69109]]

listed drugs to the list of actions requiring preparation of an 
environmental assessment. Therefore, this final rule contains a 
conforming change to Sec.  25.20(m) to correct this omission. The 
second technical correction is in part 207 (21 CFR part 207). 
Amendments to Sec. Sec.  207.21 and 207.35 were proposed as conforming 
changes to include index listed drugs under the drug registration and 
listing provisions of part 207. However, the agency neglected to 
propose a corresponding amendment to Sec.  207.20(c) which describes 
who must register and submit a drug list. Therefore, this final rule 
contains a conforming change to Sec.  207.20(c) to correct this 
omission.

III. Comments

    The agency received comments from six organizations on the August 
22, 2006, proposal. Comments were received from a trade organization 
representing new animal drug manufacturers, a trade organization 
representing pet product manufacturers, an animal feed manufacturer, a 
professional association representing veterinarians, an aquaculture 
trade association, and a U.S. Government agency.
    All of the comments supported the purpose of the proposed 
regulations. Four comments generally supported the structure and scope 
of the proposed regulations. Four comments expressed concern regarding 
the apparent complexity of the proposed regulations and encouraged the 
agency to demonstrate considerable flexibility in their implementation. 
The issue of greatest concern in these four comments involved the 
formation and functioning of the qualified expert panels proposed in 
the regulations--particularly the application of the conflict of 
interest provisions to potential panel members.
    The agency understands the time and effort involved in providing 
comments on the proposed regulations and greatly appreciates this 
effort. The general issues noted previously, as well as a number of 
more specific issues raised in the comments, are addressed as follows:
    (Comment 1) As noted, four comments expressed considerable concern 
over the apparent complexity of the process described in the proposed 
regulations. While most apparently accepted the need for this 
complexity as a direct consequence of the statutory requirements of 
section 572 of the statute, these comments uniformly expressed a desire 
that the agency be as flexible as possible in implementing the 
potentially more burdensome aspects of the regulations and encouraged 
the agency to provide as much guidance as possible to potential 
sponsors regarding their implementation.
    (Response) The agency agrees that it should be flexible, to the 
extent allowable under the law, in implementing the indexing program. 
In order to further clarify the indexing process and assist requestors 
and potential requestors, the agency intends to develop guidance 
documents regarding various parts of the process as soon after 
finalization of implementing regulations as resources permit.
    (Comment 2) One comment stated that the proposed indexing process 
is overly complex and too similar to the new animal drug approval 
process. This comment suggested that the proposed process be discarded 
and replaced with an alternative process that would emphasize general 
compounds rather than specific drug products.
    (Response) The indexing process established by the MUMS act is for 
drug products rather than general compounds. For example, section 
572(c)(1) of the act describes how to make a request for a 
determination of whether ``a new animal drug'' may be eligible for 
indexing. Moreover, that provision requires that the requestor submit 
information specific to a new animal drug, rather than for general 
compounds, such as information regarding the components and composition 
of the new animal drug and a description of the methods, facilities, 
and controls used for manufacturing the new animal drug. A request for 
addition to the index under section 572(d)(1) of the act is made ``with 
respect to a new animal drug for which [FDA] has a made a determination 
of eligibility.'' Additionally, in considering a request for 
eligibility for indexing, the statute requires that the request not 
involve the same drug in the same dosage form for the same intended use 
as a drug that is already approved or conditionally approved.
    Based on this and similar language in the statute, the agency 
believes, with respect to the indexing of new animal drugs, that 
indexing should follow the product-specific model of new animal drug 
approval.
    However, the agency notes that this basic statutory construction 
does not necessarily preclude information supporting the indexing of 
one product from being used to support the indexing of other products, 
provided the information is relevant to such products, and provided the 
party or parties gathering the information allow its use for that 
purpose if such information is proprietary.
    (Comment 3) Four comments expressed concern about the formation and 
operation of qualified expert panels and, in particular, the 
application of the conflict of interest provisions of the regulations.
    (Response) The agency is aware of the potential scarcity of experts 
to serve on some expert panels. It also wants to assure the integrity 
of this fundamental part of the indexing process, so that the agency 
can have confidence in the information and recommendations it receives 
from the expert panel and the public can trust the agency's decisions 
based on that information and recommendations.
    The purpose of obtaining information regarding potential experts is 
to enable the agency to make an informed judgment, on a case-by-case 
basis, regarding whether a financial or other interest could impair the 
person's objectivity in serving on the panel or could create an unfair 
competitive advantage for a person or organization. Under the proposal, 
and not changed in the final rule, even if there is an otherwise 
disqualifying financial interest, FDA has discretion to nonetheless 
allow the person to serve as a member of the expert panel.
    In making its determinations on the subject of conflicts of 
interest, the agency will be cognizant of both the need to assure the 
integrity of the expert panel process and the need to attract qualified 
experts to serve on these panels.
    (Comment 4) Three comments suggested that the agency needs to 
consider the expertise of the entire panel as a whole, and not each 
panelist individually, when implementing the requirement that a panel 
be composed of ``experts qualified by training and experience to 
evaluate the safety and effectiveness of the new animal drug under 
consideration.''
    (Response) It is the intention of the agency to consider the 
expertise of the entire panel as a whole, as suggested in the comment. 
Proposed Sec.  516.141(b)(5) says that the ``panel, as a whole, is 
qualified by training and experience to evaluate the safety and 
effectiveness of the new animal drug under consideration.'' However, 
paragraph (b)(1) of the same regulation could be read as requiring that 
each individual member of a panel must meet this requirement, that is, 
each member of an expert panel is expected to be qualified to 
independently assess all aspects of a particular product's target 
animal safety and effectiveness. This was not the agency's intention 
and, therefore, the language of Sec.  516.141(b)(1) has been revised to 
read: ``A qualified expert

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panel member must be an expert qualified by training and experience to 
evaluate a significant aspect of target animal safety or effectiveness 
of the new animal drug under consideration.''
    (Comment 5) Two comments suggested that the scope of review of the 
expert panel might be expanded to include elements of food safety and/
or environmental safety.
    (Response) The MUMS act clearly established several distinct steps 
in the review process for indexing new animal drugs. One step is the 
determination of eligibility for indexing, which involves an evaluation 
of most of the indexing criteria, including food, user and occupational 
safety and environmental impacts. This evaluation is to be performed by 
the agency prior to the formation of a qualified expert panel. After 
the agency makes its determination regarding eligibility, a subsequent 
step is the formation and operation of a qualified expert panel. The 
responsibilities of the expert panel are set forth in section 572(d)(2) 
of the act: Evaluate and make findings regarding target animal safety 
and effectiveness; provide information from which labeling can be 
written; and recommend whether the new animal drug should be over the 
counter, prescription, or veterinary feed directive.
    Given this statutory construction, it would not be feasible or 
appropriate for the qualified expert panel to review or to comment upon 
aspects of product safety outside the scope of target animal safety and 
effectiveness. However, sponsors are free to involve experts, not 
serving in the capacity of qualified expert panel members, in the 
preparation of information submitted to the agency in support of a 
determination of eligibility for indexing.
    (Comment 6) Several comments stated that 30 days is not a 
sufficient amount of time for a sponsor to submit a written response to 
the denial of a request for determination of eligibility for indexing 
or a denial of a request for indexing and indicated that this time 
period should be extended to 90 days.
    (Response) While the agency agrees that 30 days may not be an 
adequate period for a written response to a denial, the agency also 
notes that the proposed regulation did not explicitly limit a sponsor 
to 30 days for a written response. Instead, it proposed that a sponsor 
must inform the agency within 30 days that it wishes to avail itself of 
the opportunity for an informal conference. Within 30 days of receipt 
of such a request, the agency would schedule such a conference at a 
time agreeable to both the agency and the sponsor, and the sponsor 
would be required to submit a written response at least two weeks prior 
to the scheduled meeting.
    The agency continues to believe that it is appropriate to have a 
two-step process for scheduling an informal conference. This would 
involve an initial period of time during which a sponsor must signify 
their desire to have an informal conference followed by a second period 
of time during which the conference will actually be scheduled. The 
agency also continues to believe that it needs to receive the written 
response from a sponsor a minimum of two weeks prior to an informal 
conference.
    However, the agency has extended the initial period during which 
sponsors must request an informal conference from 30 days to 60 days to 
permit sponsors additional time to consider the need for such a 
conference. The agency has also extended the second period of time 
during which the agency will schedule a requested informal conference 
from 30 days to 45 days. With these revisions, a sponsor may take as 
long as 60 days to request an informal conference, may request that the 
conference not be held until 45 days after such a request and need not 
submit the written response in support of the conference until two 
weeks before the conference. This process will generally permit 
sponsors to have as much as 90 days to prepare a written response, if 
they feel they need it.
    Accordingly, the language of Sec.  516.123(b) and (c) is revised to 
read as follows:
    (b) The written notice will include information for scheduling 
the informal conference and state that a written request for a 
conference must be made within 60 days of the date FDA sends its 
notice.
    (c) Within 45 days of receiving a request for an informal 
conference, FDA will schedule and hold the informal conference at a 
time agreeable to both FDA and the person making the request.
    (Comment 7) Two comments stated that the language of Sec.  516.123 
indicated that informal conferences were, in fact, rather formal and 
one commentor asked for clarification of the reason for using the term 
``informal'' in this context.
    (Response) The statute and the proposed and final regulation use 
the phrase ``informal conference.'' The agency believes that the 
purpose of the statutory use of the term ``conference'' in section 572 
of the act is to be distinct from the term ``hearing'' which is used in 
the context of similar denial or withdrawal decisions regarding 
products involved in the new animal drug approval process under section 
512 of the act. The hearing referred to in section 512 of the act has 
been clarified by regulation to be a formal evidentiary hearing under 
21 CFR part 12. The agency believes that the purpose of the statutory 
use of the word ``informal'' in section 572 of the act is to draw a 
further distinction between the formal evidentiary hearing under 512 of 
the act and the informal conference under section 572.
    FDA believes that the process for the informal conference set forth 
in Sec.  516.123 is appropriately tailored. While much less formal than 
the part 12 hearings, it still ensures that there is a meaningful 
opportunity for parties to express their views, a neutral decision 
maker, and an administrative record for judicial review if the final 
agency decision is challenged in court. Moreover, by describing the 
process in a regulation, the parties in the informal conference will 
have a common understanding of how it will operate, fostering an 
orderly operation and reducing the potential for disagreements over the 
process.
    (Comment 8) One comment questioned the inclusion of the requirement 
for an estimation of annual product distribution in proposed Sec.  
516.129(c)(6).
    (Response) In accordance with section 572(c)(1)(A) of the act, the 
request for determination of eligibility for indexing must include the 
anticipated annual distribution of the new animal drug. This 
information would be useful, for example, in estimating the extent of 
environmental and user exposure in the process of determining 
environmental and user safety.
    (Comment 9) One comment suggested that requestors of an informal 
conference have an opportunity to read and respond to the minutes of an 
informal conference within 30 days.
    (Response) This comment raises two issues which the agency needs to 
address and clarify in the final regulation. The first issue relates to 
whether the person requesting an informal conference should have the 
opportunity to review and comment on a summary of the informal 
conference. The agency believes that the requestor should have such an 
opportunity. In framing the comment in the context of the ``minutes of 
an informal conference,'' the comment also raises an issue regarding 
what sort of a summary of the informal conference the person requesting 
an informal conference should have an opportunity to review and comment 
on. In this context, the agency has reconsidered the requirement in the 
proposed regulation for the preparation of both a ``written summary'' 
of the conference and a

[[Page 69111]]

``written report'' of the conference. The latter was intended to 
parallel the written report associated with a 21 CFR part 16 informal 
hearing, and was intended to be more comprehensive than simply a 
``written summary of the conference'' or the ``minutes of an informal 
conference'' as expressed in the comment. The agency believes that the 
requestor of an informal conference should have an opportunity to 
review and comment on the written report of the informal conference. We 
have revised Sec.  516.123(k) to provide for such a review whenever 
time permits. That being the case, the agency believes that a written 
summary of the informal conference is superfluous and this requirement, 
which was proposed by means of Sec. Sec.  516.123(j) and 516.123(l)(3), 
has been removed from the final regulation.
    (Comment 10) Two comments requested clarification of different 
aspects of the early, non-food life-stage provision of the proposed 
regulations.
    (Response) As stated in the preamble to the proposed regulations, 
the early, non-food life-stage provision of the statute and 
implementing regulations will be applicable only in limited 
circumstances, and the safety of food eventually derived from such 
animals will be determined in accordance with the safety standards of 
512(d) of the act.
    The agency has currently identified only early, non-food life 
stages of some aquatic species, such as certain fish eggs and mollusc 
larvae, as likely to be able to meet this standard. There is no 
explicit statutory restriction of this provision to aquatic minor 
species, although the statutory restriction to products intended only 
for use in a hatchery, tank, pond or other similar contained man-made 
structure tends to exclude terrestrial species. The agency has yet to 
identify a terrestrial species that it feels is likely to qualify under 
this provision of the statute, but has not ruled out the possibility 
that some terrestrial minor species could qualify.
    The agency is unable at this time to establish any general criteria 
regarding ages, sizes, amount of time between early, non-food life 
stages and later food life stages, or biological developmental 
processes that can predict the applicability of this provision of the 
act. Nor is the agency able to make any general statements regarding 
how much information of what sort will be necessary to meet the 
requirements of 512(d) of the statute. These issues depend upon the 
drug and the minor species involved in each particular case.
    (Comment 11) One comment asserted that the revenue to be expected 
from some segments of the minor species market may not justify the 
estimated administrative costs for indexing cited in the proposed rule. 
The comment is concerned with needed medicated feeds, especially for 
zoo and laboratory animals. The comment proposes that an ``exemption'' 
should be provided in cases where sales will not offset these costs. 
Specifically, the comment suggests that a threshold sales level should 
be set ($100,000 is recommended) above which indexing would be 
required, but below which an expanded policy of regulatory discretion 
would be provided.
    The comment also notes that the inability to alter the nutrition 
and physical form of an approved medicated feed to suit use in a minor 
species limits the utility of the existing regulatory discretion policy 
(Compliance Policy Guide (CPG) 615.115) for the extra-label use of 
medicated feed in minor species. Therefore, it is suggested that a new 
policy of regulatory discretion based on customer formulated feeds be 
incorporated into the MUMS indexing rule for the intended uses that 
fall below the proposed sales threshold.
    (Response) The lack of medicated feeds legally available to minor 
species is recognized by the agency. The Animal Medicinal Drug Use 
Clarification Act of 1994 (AMDUCA) (Pub. L. 103-396) provides for 
certain extra-label uses of new animal drugs by veterinarians, but 
specifically prohibits extra-label use of medicated feeds. The CPG is 
intended to be a limited exercise of regulatory discretion regarding 
access to needed medicated feeds for some minor species. The indexing 
provision was included in the MUMS act partly to address this concern. 
It is intended to provide legal means for sponsors to provide these 
much-needed formulations to non-food minor species animals, like the 
zoo species cited in this comment. The agency recognizes that indexing 
will not provide for the legal availability of drugs for minor species 
under all circumstances. However, the exercise of regulatory discretion 
does not provide legal access under any circumstances.
    The administrative cost of indexing, as cited in the proposed rule, 
is an estimate of the average cost of indexing a new animal drug. The 
enormous variety of species and products will be reflected in the range 
of complexity of indexing these products. Variables such as the number 
of species to be included in the intended use, the availability of 
scientific literature and experts, whether or not the drug has already 
been approved in other species or formulations, etc. will have a 
significant effect on the cost of completing a request for indexing. 
Simple requests for indexing can be expected to require less time to 
prepare and, therefore, will be less costly than the estimate, while 
others may be more involved and will require more time.
    The agency will nonetheless continue to consider the exercise of 
regulatory discretion under appropriate circumstances and, as it gains 
experience with the indexing process, will consider whether it should 
make any changes to CPG 615.115.
    (Comment 12) One comment was received in regard to the proposed 
conforming changes to parts 201 and 202 (21 CFR parts 201 and 202). 
This comment stated that the addition of indexing references to these 
parts of 21 CFR will add very specific requirements to the labeling and 
advertising process for an unapproved drug.
    (Response) Part 201 pertains to drug labeling. The proposed 
conforming changes to part 201 are in subpart D which is entitled 
``Exemptions for Adequate Directions for Use.'' The regulations in this 
subpart describe situations where new drug and new animal drug labeling 
would be exempt from the misbranding requirements of section 502(f)(1) 
of the act or provide clear descriptions of specific labeling 
information required to avoid misbranding under section 502(f)(1) of 
the act. Specifically, Sec.  201.105 describes what information must 
appear on prescription new animal drug labeling and Sec.  201.122 
describes what information must appear on drugs for processing, 
packing, or manufacturing. The agency believes these same exemptions 
and clear descriptions should be available for index listed drugs and 
does not believe that the specific labeling requirements described in 
this subpart for approved new animal drugs are overly burdensome for 
index listed drugs. Furthermore, the labeling requirements for 
prescription new animal drugs described in Sec.  201.105 are necessary 
for the safe and effective use of such drugs whether they are approved 
or index listed.
    Part 202 pertains to prescription drug advertising. The conforming 
change to Sec.  202.1 will require that prescription drug advertising 
for index listed drugs shall not recommend or suggest any use that is 
not in the labeling accepted in such index listing and that the 
advertisement shall present information from labeling granted in the 
listing relating to each specific side effect and contraindication in 
such labeling that relates to the uses of the advertised drug dosage 
form(s). Section 202.1 currently contains this same provision for new 
animal drugs that are approved under section 512 of the act and for new 
drugs

[[Page 69112]]

that are approved under section 505 of the act. We do not believe this 
conformation to current regulations is unreasonable.
    (Comment 13) One comment expressed confusion regarding whether 
unapproved index listed products that are drug listed under the 
provisions of part 207 (21 CFR part 207) are subject to product user 
fees under Animal Drug User Fee Act of 2003 (ADUFA).
    (Response) Unapproved new animal drugs that are index listed under 
section 572 of the act are not subject to product user fees under ADUFA 
(Pub. L. 108-130). Unless specifically exempted, all new animal drugs 
that are in commercial distribution, whether approved or not, are 
subject to the drug listing requirements of part 207 (see Sec.  
207.20). However, to be subject to a product user fee, an animal drug 
product must not only be subject to the drug listing requirements of 
part 207, but also approved as either an animal drug application or 
supplemental animal drug application (see section 740(a)(2) of the 
act). As defined under ADUFA, these applications do not include drugs 
that are index listed under section 572 of the act (see section 739(1) 
and (2) of the act).
    (Comment 14) One comment asked for clarification on why certain 
conforming changes to the regulations in part 510 for approved drugs 
were proposed to apply to index listed drugs.
    (Response) Three sections in part 510 contain conforming changes. 
Those sections apply to new animal drugs, which means they apply to 
index listed drugs because they are new animal drugs. The conforming 
changes are needed so it is clear how these provisions apply in the 
context of index listed drugs. For example, Sec.  510.301 describes the 
reporting and recordkeeping requirements for licensed medicated feed 
mills concerning experience with new animal drugs when used in or on 
animal feeds. Previously, the regulation said the records and report 
must be appropriately identified with the new animal drug 
application(s) to which they relate. The conforming amendment adds ``or 
index listing(s)'' to which they relate. Similarly, one of the items to 
be reported is any failure of the drug to meet specifications 
established for it in the new animal drug application. This is being 
amended to include specifications established in the request for 
determination of eligibility for indexing. Conforming amendments are 
also made in Sec.  510.305, which requires licensed medicated feed mill 
operators to maintain approved labeling for each Type B and/or Type C 
feed being manufactured on the premises of the manufacturing 
establishment or the facility where the feed labels are generated, and 
Sec.  510.455, which describes the requirements for manufacturing a 
free-choice medicated animal feed.
    (Comment 15) One comment stated that due to the prohibitive cost of 
production of small quantities of separately labeled product, the 
requirement for labeling indexed drugs separately from approved drugs 
could be a deterrent for indexing useful drugs that are already 
approved in major species. The comment suggested that adequate 
distinction could be required on existing labeling to provide the 
indexed claims as well as information on the approved labeling.
    (Response) New animal drug labeling that contains information 
derived from both an application approved under section 512(b) of the 
act and from an index listing granted under section 572 of the act (572 
index listing) would be misbranded under section 502(w)(2) of the act 
and would cause the new animal drug to be unsafe under section 
512(a)(1)(A) and (C) of the act. Simply put, in this situation, the 
labeling information derived from the 512(b) approval does not conform 
with the 572 index listing, and the labeling information derived from 
the 572 index listing does not conform with the 512(b) approval. For 
example, under section 572(h) of the act, the labeling of an index 
listed drug must include the statement ``NOT APPROVED BY FDA.--Legally 
marketed as an FDA indexed product.'' Such a statement would be false 
on the labeling of a product approved under section 512(b) of the act 
because that product has been approved by FDA.
    (Comment 16) One comment requested clarification on the statement 
in proposed Sec.  516.155 to the effect that a product cannot be 
utilized in an extra-label manner once it is indexed. The comment said 
that this could be prohibitive to the veterinarian's ability to utilize 
an approved medication off label when needed if it has also been 
indexed.
    (Response) Under Sec.  516.155, the label of an indexed drug must 
state that extra-label use is prohibited. This statement is based on 
section 572(h) of the act. However, this statement prohibiting extra-
label use of new animal drugs indexed under section 572 of the act does 
not impose any restrictions, beyond those that already existed, on the 
extra-label use of new animal drugs approved under section 512(b) of 
the act.
    The extra-label use of an approved new animal drug is not permitted 
when ``the labeling of another animal drug that contains the same 
active ingredient which is in the same dosage form and concentration'' 
provides for the same use as a contemplated extra-label use (section 
512(a)(4)(A) of the act). We believe that the reference to ``another 
animal drug'' in this provision means a new animal drug that, like the 
drug to be used in an extra-label manner, has been approved under 
section 512(b) of the act, and that it does not include a new animal 
drug that has been indexed under section 572 of the act. The 
regulations implementing the extra-label use provisions of section 512 
of the act provide that one of the conditions for the extra-label use 
of an approved new animal drug is that ``there is no approved new 
animal drug that is labeled for such use and that contains the same 
active ingredient which is in the required dosage form and 
concentration'' (Sec. Sec.  530.20(a)(1) (emphasis added) and 
530.30(a)). Based on our interpretation of the act, we do not believe 
the condition in this regulation should be broadened to reference 
indexed drugs along with approved drugs. Thus, if a new animal drug is 
index listed for intended use A, for example, and the same active 
ingredient in the same dosage form is approved for intended use B, then 
the approved drug may be used in an extra-label manner for intended use 
A, as long as all other provisions of 21 CFR part 530 have been met.
    (Comment 17) One comment noted that the preamble failed to 
explicitly state that indexed drugs may fall into one of three 
categories: Over-the-counter, prescription, and veterinary feed 
directive (VFD).
    (Response) We agree that index listed drugs may fall into one of 
these three categories. Prescription status for index listed drugs is 
provided for in section 503(f)(1)(A)(ii) of the act and VFD status is 
provided for in section 504(a)(1) of the act. The current regulations 
in title 21 of the CFR have been revised accordingly by conforming 
change in this rulemaking at Sec.  201.105, Sec.  202.1, Sec.  558.3, 
and Sec.  558.6.
    (Comment 18) One comment stated that it appears that there can be a 
number of holders of the same product listed in the index, in other 
words, there is no exclusivity associated with index listing.
    (Response) We agree. There are no exclusive marketing rights 
associated with index listed drugs, such as are provided for MUMS-
designated approved and conditionally approved drugs under section 
573(c) of the act.

[[Page 69113]]

    (Comment 19) One comment requested clarification regarding whether 
proposed Sec.  516.125(d) meant that target animal safety studies done 
under an index investigational new animal drug (INAD) were not required 
to be conducted in accordance with good laboratory practices (GLPs).
    (Response) While the agency encourages adherence to GLPs to the 
maximum extent possible, the comment is correct that target animal 
safety studies in support of an index listing are not required to be 
conducted under GLPs. Qualified expert panels may consider all 
available information in reaching their conclusions regarding target 
animal safety and effectiveness, including target animal safety studies 
that do not meet the GLP standards of 21 CFR part 58.
    (Comment 20) One comment stated that the agency's estimated costs 
to a MUMS index drug requestor appeared to be reasonable and accurate. 
However, the comment also stated that, as a result of the fees referred 
to in Sec.  516.141(g)(4), costs for complex reviews requiring 
extensive panel time may be dramatically higher than simple reviews 
that can be quickly completed. The comment suggested that, in an effort 
to contain such costs, avoid economic discrimination, and increase 
participation in the indexing process, the agency should consider, at 
least for an initial period of time, establishing a uniform fee of 
$10,000 for indexing requests.
    (Reponse) FDA anticipates that some expert panel members may charge 
requestors a fee for their professional services. Sec.  516.141(g)(4) 
recognizes this fact and states that if such professional fees are paid 
they should be no more than commensurate with the value of the time 
that the member devotes to the review process in order to avoid a 
conflict of interest or the appearance of a conflict of interest. This 
cost to requestors is also discussed in the Analysis of Economic 
Impacts section of the proposed rule and this final rule. While the 
agency supports, in principle, efforts to contain costs and increase 
efficient utilization of the indexing process, the agency believes 
that, Sec.  516.141(g)(4) notwithstanding, it should not be involved in 
establishing or otherwise regulating fees for the work expert panel 
members provide to the requestor as part of the indexing process.
    (Comment 21) One comment suggested that a requestor not necessarily 
be a particular firm, but potentially a group of individuals or 
organizations each of which could contribute to the indexing process.
    (Response) Under the new animal drug approval process, information 
gathered from multiple sources can be placed into master files from 
which the information can be referenced in support of one or more new 
animal drug applications. Master files can contain public or 
proprietary information relating to, for example, manufacturing 
processes. The indexing rule does not prevent different individuals or 
groups from contributing to the indexing of a drug product using this 
type of a master file mechanism, and FDA intends to allow for such 
master files to be used in the context of indexing.
    (Comment 22) One comment requested clarification of the post-
indexing reporting requirements for chemistry, manufacturing, and 
control (CMC) information and whether they will be the same as the 
Minor Changes and Stability Reporting (MCSR) process.
    (Response) MCSR, as required by 21 CFR 514.8(b)(4), does not apply 
to indexed drugs. Under Sec.  516.161(b)(1), changes in manufacturing 
methods or controls required to correct product or manufacturing 
defects that may result in serious adverse drug events should be made 
as soon as possible and a request to modify the indexed drug should be 
concurrently submitted to the Director, Office of Minor Use and Minor 
Species Animal Drug Development (OMUMS). Under Sec.  
516.165(c)(3)(iii), the annual indexed drug experience report must 
contain a summary of any changes made during the reporting period in 
the methods used in, and facilities and controls used for, manufacture, 
processing, and packing. This information must be presented in the same 
level of detail that it was presented in the request for determination 
of eligibility for indexing. The information is not included in this 
report, however, if it has already been submitted under Sec.  516.161.
    (Comment 23) One comment stated that proposed Sec.  516.165(a)(3) 
appeared to be inconsistent with proposed Sec.  516.165(c)(3)(iii) in 
that Sec.  516.165(a)(3) implied that indexed drugs must meet all 
``approved CMC requirements'' while Sec.  516.165(c)(3)(iii) implied 
that CMC information only needed to be reported in the level of detail 
it was originally described in the indexing request.
    (Response) The comment is correct that under Sec.  
516.165(c)(3)(iii), changes in the manufacturing process subsequent to 
product indexing need to be reported only to the level of detail that 
the manufacturing process was described in the original request for a 
determination of eligibility for indexing. However, section 
572(d)(1)(F) of the act requires, as a condition of indexing, that 
requestors affirmatively commit to manufacture the drug product 
proposed for indexing according to current good manufacturing practices 
(cGMP). Accordingly, Sec.  516.165(a)(3) reflects the requirement for 
the manufacturer of an indexed drug to meet the record-keeping 
requirements of the cGMP regulations, and that this requirement is in 
addition to annually reporting the relatively limited CMC information 
required by Sec.  516.165.
    (Comment 24) One comment indicated that, with respect to 
occupational and user safety, the proposed regulations provided ``no 
regulatory relief from the statutory requirement for an indexed drug.''
    (Response) This is an accurate observation. The regulations, 
Sec. Sec.  516.129(c) and 516.133(a), are consistent with section 
572(c)(1)(F) and (c)(2)(E) of the act in this regard. Both the 
regulations and the statutory provisions they implement require that 
this aspect of product safety be assessed in accordance with the 
requirements of section 512(d) of the act.
    (Comment 25) One comment stated that references to ``statutory 
criteria'' in the preamble were unclear, raising the question whether 
the qualified expert panel and the agency would be subject to the 
evidentiary standards of section 512 or to those of section 572.
    (Response) The comment failed to specifically identify where in the 
preamble the unclear references to statutory criteria appeared, but the 
agency presumes that it was in the introductory paragraph of section 
II. F. (71 FR 48840 at 48842 and 48843). This paragraph describes the 
two-part indexing review process established by the act, which includes 
a review of whether the new animal drug meets the statutory criteria 
regarding target animal safety and effectiveness.
    The standard for target animal safety and effectiveness is 
established, with respect to expert panels, under section 572(d)(2)(C) 
of the act and, with respect to the agency, under section 572(d)(4) as: 
The benefits of using the new animal drug for the proposed use in a 
minor species outweigh its risks to the target animal, taking into 
account the harm being caused by the absence of an approved or 
conditionally approved new animal drug for the minor species in 
question.

IV. Conforming Changes

    Conforming changes to certain applicable sections of title 21 of 
the Code of Federal Regulations (CFR) can be found in:
    Sec.  20.100 Applicability; cross-reference to other regulations.

[[Page 69114]]

    Sec.  25.20 Actions requiring preparation of an environmental 
assessment.
    Sec.  25.33 Animal drugs.
    Sec.  201.105 Veterinary drugs.
    Sec.  201.115 New drugs or new animal drugs.
    Sec.  201.122 Drugs for processing, repacking, or manufacturing.
    Sec.  202.1 Prescription-drug advertisements.
    Sec.  207.21 Times for registration and drug listing.
    Sec.  207.35 Notification of registrant; drug establishment 
registration number and drug listing number.
    Sec.  225.1 Current good manufacturing practice.
    Sec.  225.35 Use of work areas, equipment, and storage areas for 
other manufacturing and storage purpose.
    Sec.  225.135 Work and storage areas.
    Sec.  226.1 Current good manufacturing practice.
    Sec.  500.25 Anthelmintic drugs for use in animals.
    Sec.  500.26 Timed-release dosage form drugs.
    Sec.  510.301 Records and reports concerning experience with animal 
feeds bearing or containing new animal drugs for which an approved 
medicated feed mill license application is in effect.
    Sec.  510.305 Maintenance of copies of approved medicated feed mill 
licenses to manufacture animal feed bearing or containing new animal 
drugs.
    Sec.  510.455 Requirements for free-choice medicated feeds.
    Sec.  511.1 New animal drugs for investigational use exempt from 
section 512(a) of the act.
    Sec.  515.10 Medicated feed mill license applications.
    Sec.  515.21 Refusal to approve a medicated feed mill license 
application.
    Sec.  558.3 Definitions and general considerations applicable to 
this part.
    Sec.  558.5 Requirements for liquid medicated feed.
    Sec.  558.6 Veterinary feed directive drugs.
    Sec.  589.1000 Gentian violet.

V. Legal Authority

    FDA's authority for issuing this final rule is provided by the MUMS 
act (21 U.S.C. 360ccc et seq.). When Congress passed the MUMS act, it 
directed FDA to publish implementing regulations (see 21 U.S.C. 360ccc 
note). In the context of the MUMS act, the statutory requirements of 
section 572 of the act, along with section 701(a) of the act (21 U.S.C. 
371(a)) provide authority for this final rule. Section 701(a) 
authorizes the agency to issue regulations for the efficient 
enforcement of the act.

VI. Analysis of Economic Impacts

    FDA has examined the impacts of the final rule under Executive 
Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the 
Unfunded Mandates Reform Act (Public Law 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; and distributive impacts and equity. The Regulatory 
Flexibility Act (5 U.S.C. 601-612) requires agencies to analyze 
regulatory options that would minimize any significant impact of a rule 
on small entities.
    FDA finds that the final rule does not constitute an economically 
significant regulatory action as defined in 3(f)(1) of Executive Order 
12866. We base this on the following analysis that estimates annual 
costs ranging from about $476,000 in the first year to about $869,000 
in the 10th year. Similarly, the administrative costs are unlikely to 
have a significant economic impact on a substantial number of small 
entities.
    Section 202(a) of the Unfunded Mandates Reform Act requires that 
agencies prepare a written statement, which includes an assessment of 
anticipated costs and benefits, before establishing ``any rule that may 
result in an annual expenditure by State, local and tribal governments, 
in the aggregate, or by the private sector, of $100 million (adjusted 
annually for inflation) in any one year.'' The current threshold after 
adjustment for inflation is $127 million, using the most current (2006) 
implicit price deflator for the gross domestic product. FDA does not 
expect this final rule to result in any 1-year expenditure that would 
meet or exceed this amount. As such, no further analysis of anticipated 
costs and benefits is required by the Unfunded Mandates Reform Act.

A. Summary

    The final rule is expected to result in about 30 requests for a 
determination of eligibility for indexing for 60 products annually, or 
2 per requestor. We estimate that requestors for 20 of these products 
will create and convene expert panels to review the safety and efficacy 
data. Further, the recommendations of these panels are expected to lead 
to the addition of 20 animal drug index listings each year.

B. Comments on Proposed Rule

    FDA received six comments to the proposed rule, none of which 
contained substantive comments on the methodology used in the analysis 
of impacts of the proposed rule. As such, we have retained the 
methodology for the analysis of the final rule. Our requests in the 
analysis of impacts section of the proposed rule for additional cost 
data did not elicit any data that conflicted with our estimates. We 
did, however, receive one comment that suggested the paperwork 
reporting burden may be too low. We revised the economic impacts 
associated with the paperwork reporting burden, as well as made other 
small changes to the final rule due to other public comments. We 
address comments on individual components and any changes made to the 
final rule in the administrative cost section.

C. Benefit

    This rule intends to create administrative practices and procedures 
for index listing a new animal drug for use in a minor species, thereby 
providing the benefit of a legal basis for marketing an unapproved new 
animal drug intended for use in a minor species. The need for the rule 
arises from the existence of some minor species populations that are 
too small to support traditional drug approval studies. The 
countervailing risk of this rule is that animal drugs that are 
marginally economically viable could use this system to avoid the 
traditional animal drug approval process. Under this final rule, 
however, the voluntary indexing of a new animal drug for use in a minor 
species would only be allowed when the same drug in the same dosage 
form for the same intended use is not already approved or conditionally 
approved, thereby reducing this risk.

D. Administrative Costs

    This section will describe and estimate the annual administrative 
costs by provision for both producers of currently unapproved drugs 
that would request an index listing and FDA. First, we address the 
efforts required by requestors concerned with index listing. The 
estimates of the number of requestors, frequencies of responses, and 
hours per procedure for each of the provisions of the final rule were 
determined by Center for Veterinary Medicine (CVM) personnel for the 
proposed rule. Labor hour estimates for some procedure have been 
amended in this final rule due to public comments.
    We estimate that, on average, two foreign requestors of drug 
indexing would need to hire a permanent resident agent to represent 
them. We expect this to require about 1 hour of

[[Page 69115]]

administrative time for a requestor's management employee in regulatory 
affairs. We estimate the loaded wage estimate at $42.29 per hour 
(including a 30 percent increase for benefits) for regulatory affairs 
personnel.\1\ This provision would cost the two requestors a total of 
about $85. We expect that a resident agent would expend only about 6 
hours of administrative effort per year per indexed drug. We estimate 
the wage rate of the resident agent at $100 to $150 per hour, and use 
the midpoint, $125, for our calculations. Total annual costs for 
resident agents are estimated at $1,500 (two agent times 6 hours times 
$125 per hour) in the first year. In the 10th year this is expected to 
rise to about $15,000 as two more resident agents each provide 6 more 
hours of administrative effort each additional year.
---------------------------------------------------------------------------

    \1\ 2004 National Industry-Specific Occupational Employment and 
Wage Estimates, U.S. Department of Labor, Bureau of Labor Statistics 
(www.bls.gov/oes/current/naics4_325400.htm); compliance officer 
wage rate for pharmaceutical and medicine manufacturing (NAICS 
325400).
---------------------------------------------------------------------------

    Section 516.121 of the final rule provides for one or more meetings 
between requestors and FDA to discuss the requirements for indexing a 
new animal drug. We estimate that 30 requestors will each request, on 
average, 2 meetings annually, for a total of 60 meetings. Preparation 
and participation in these meetings is estimated at 4 hours each, for 
an annual total of 240 hours.
    Section 516.123 concerns informal conferences regarding agency 
administrative actions. These would include conferences to discuss a 
request for determination of eligibility that has been denied, the 
removal of an expert panel member, a request for indexing that was 
denied or an indexed drug that was removed from the list. In response 
to public comments, we have provided for a 60-day time period for 
industry to respond with a written request for a conference, rather 
than the proposed 30-day time period. Additionally, we have amended the 
final rule to require that an informal conference be scheduled and held 
within a 45-day period from our receipt of a request for an informal 
conference. The proposed rule would have required that we only attempt 
to schedule and hold the conference within 30 days. We do not expect 
these two changes to have an impact on the cost estimates of this 
provision. We estimate that about three requestors would request one 
conference with us annually for any of these reasons. We expect that 
each requestor would expend about 8 hours (24 hours total) to prepare 
for and attend each of these conferences. The combined efforts for 
preparation and participation in all conferences (Sec.  516.123) are 
estimated at 264 hours (240 plus 24). At the same loaded wage estimate 
of $42.29 per hour, this provision is expected to cost about $11,200 
annually.
    For section 516.125, we estimate that two requestors would each 
annually submit three notices of claimed investigational exemptions for 
new animal drugs for index listing. We estimate that each submission 
would require about 20 hours for regulatory affairs personnel to 
prepare. At the loaded wage estimate of $42.29 per hour, the total of 
120 hours would cost about $5,100.
    We estimate that about 30 requestors would each average about 2 
requests for determination of eligibility for indexing of individual 
animal drugs annually, totaling to 60 requests annually for proposed 
Sec.  516.129. Based on a public comment that the paperwork burden was 
underestimated in the proposed rule, we have increased the number of 
labor hours for preparing each request from 12 to 20. At the loaded 
wage estimate of $42.29 per hour, this provision would require about 
1,200 hours equal to about $50,700. Included in this estimate of 60 
requests are any resubmitted requests that were previously denied.
    Section 516.141 requires the creation of a qualified expert panel 
to review all information, provided by any source, relevant to a 
determination of the target animal safety and effectiveness of the new 
animal drug. We are required to approve the panel members before the 
panel formally convened. We estimate that requestors of 20 animal 
drugs, or about one-third of the 60 animal drugs that annually are 
determined to be eligible for indexing, would create qualified expert 
panels to further study the safety and efficacy data. The creation of 
each panel by a requestor is estimated to take about 16 hours of effort 
by regulatory affairs personnel. This figure has been increased from 
the 8 hours estimated in the proposed rule based on a public comment. 
At the same loaded wage estimate, these 320 hours are estimated at 
about $13,500 annually. An additional 0.5 hours is estimated for 
recordkeeping for the creation of the qualified panels described in 
Sec.  516.141. This would result in an additional $400 in annual costs.
    Section 516.143 describes how the expert panel will prepare a 
written report for FDA with its findings concerning the new animal drug 
under consideration for index listing. The review of the relevant 
information and preparation of the report by each panel would take an 
estimated 120 hours, an increase from the 80 hours estimated for the 
proposed rule. This equates to 2,400 hours for 20 panels. The rule 
allows for fees to be paid to panel members for their time. We estimate 
the average wage rate for panel members at $100 to $150/hr, and use the 
midpoint ($125) in our calculations. At this wage, we estimate these 
activities to cost up to $300,000 annually for the total industry, or 
$15,000 per requestor for each animal drug under consideration.
    We estimate that the formal request for addition to the index, 
provided for in Sec.  516.145, will require about 20 hours to prepare, 
an increase from the 12 hours estimated in the proposed rule. This will 
result in another 400 hours of effort (20 requests times 20 hours) for 
regulatory affairs personnel. We project the compliance cost of this 
effort at $16,900 annually.
    We only expect to receive one request each for a modification to an 
indexed listed drug and a change in ownership of an index file annually 
(provided for in proposed Sec. Sec.  516.161 and 516.163), and estimate 
the preparation of each to require 4 and 2 hours, respectively. In 
total, these compliance efforts will cost about $250 in the first year. 
Total modification requests and ownership change notifications are 
expected to increase by one each year so that 10 of each would be 
expected to be submitted in year 10. The cost of these provisions in 
year 10 is estimated at about $2,500. This final rule will require, in 
Sec.  516.165, that records and reports be created, submitted and 
retained by the holder of the indexed drug. These records include a 3-
day indexed drug field alert report, a 15-day indexed drug field alert 
report and an annual indexed drug experience report. We expect that the 
vast majority of compliance efforts will be associated with the annual 
indexed drug experience report. Because the number of expected requests 
that are granted for addition to the index is 20 per year (on average, 
20 requestors with 1 request granted each), the number of reports to be 
created, submitted and stored is also estimated at 20 per year. We 
estimate the reports for each index listing will require 8 hours 
annually, totally about 160 hours for all 20 listings. At the loaded 
wage estimate of $42.29 per hour, we estimate the first-year reporting 
costs at about $6,800. These annual costs will increase by an 
additional $6,800 each year as an additional 20 indexed drugs are added 
to the list. In year 10 we estimate the cost of this provision at about 
$67,700. Further, we expect that the maintenance of these records 
(recordkeeping) will require an additional hour of administrative time 
for each indexed

[[Page 69116]]

drug listing. These additional 20 hours will cost about $850 at the 
same loaded wage estimate in the first year, and would also increase in 
succeeding years by an additional $850 as additional indexed drugs are 
added to the list. We estimate the cost of this provision in year 10 at 
about $8,500.
    For those choosing to seek a MUMS index listing of an unapproved 
animal drug, total requestor compliance costs are expected to sum to 
about $407,000 in the first year. This represents an increase of 
$134,000 from the $273,000 estimated cost of the proposed rule. These 
costs will be borne by 30 firms that make a request for determination 
of eligibility for indexing at an average cost per requestor of about 
$13,600 per submission. Including only those estimated 20 firms that 
followup with a request for addition to the index, we project average 
costs at about $19,000. Costs in succeeding years would be expected to 
increase slightly due to the annual reporting requirements for all 
indexed drugs, resulting in year-10 total costs for the industry at 
about $492,000.

E. Costs to Government

    The Government would also incur costs for this final rule. We 
expect that about 60 percent of a full-time equivalent employee at a 
GS-14 salary would be needed to handle the administrative work of the 
indexing of MUMS drugs in the first year. This would include all 
administrative efforts from responding to requests for presubmission 
meetings to making changes to approved indexed drugs. We estimate 
Government costs (including a 30 percent adjustment for benefits) of 
this provision at about $69,000 in the first year. In year 10 we 
estimate that up to four full time equivalent employees (one GS-14 
position, two GS-13 positions and one GS-11 position) would be needed 
to administer the program. Including a 30 percent adjustment for 
benefits, we estimate that the cost to Government in year 10 could 
increase to about $378,000.
    Total costs for this final rule would be the sum of private 
administrative and Government costs. Total costs are estimated to 
increase from $476,000 in the first year up to $869,000 in the 10th 
year.

F. Regulatory Flexibility Analysis

1. Small Business Impacts
    The Regulatory Flexibility Act requires agencies to prepare a 
regulatory flexibility analysis if a rule is expected to have a 
significant economic impact on a substantial number of small entities. 
Although we believe it is unlikely that significant economic impacts 
would occur, the following constitutes the final regulatory flexibility 
analysis.
    One requirement of the Regulatory Flexibility Act is a succinct 
statement of any objectives of the rule. As stated previously in this 
analysis, with this rule the agency intends to create an administrative 
system, provided for by statute, that would allow for the legal 
marketing of unapproved animal drugs for use in minor species in the 
U.S. that would otherwise not be economically viable under current 
market conditions.
    The Regulatory Flexibility Act also requires a description of the 
small entities that would be affected by the rule, and an estimate of 
the number of small entities to which the rule would apply. The Small 
Business Administration (SBA) defines the criteria for small businesses 
using the North American Industrial Classification System (NAICS). For 
pharmaceutical preparation manufacturers (NAICS number 325412), SBA 
defines small businesses as those with fewer than 750 employees. Census 
data shows that 723 companies with 901 esta