Defining Small Number of Animals for Minor Use Designation, 14411-14417 [E8-5385]

Agencies

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

[Federal Register Volume 73, Number 53 (Tuesday, March 18, 2008)]
[Proposed Rules]
[Pages 14411-14417]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-5385]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 516

[Docket No. 2008N-0011]
RIN 0910-AG03


Defining Small Number of Animals for Minor Use Designation

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule.

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SUMMARY: The designation provision of the Minor Use and Minor Species 
Animal Health Act of 2004 (MUMS act) provides incentives to animal drug 
sponsors to encourage drug development and approval for minor species 
and for minor uses in major animal species. Congress provided a 
statutory definition of ``minor use'' that relied on the phrase ``small 
number of animals'' to characterize such use. At this time, FDA is 
proposing to amend the implementing regulations of the MUMS act. In 
response to Congress' charge to the agency to further define minor use, 
this amendment proposes a specific ``small number of animals'' for each 
of the seven major animal species to be used in determining whether any 
particular intended use in a major species is a minor use.

DATES: Submit written or electronic comments on the proposed rule by 
July 16, 2008. Submit comments regarding information collection by 
April 17, 2008 to OMB (see ADDRESSES).

ADDRESSES: You may submit comments, identified by Docket No. 2008N-0011 
and RIN number 0910-AG03, by any of the following methods:
Electronic Submissions
    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
Written Submissions
    Submit written submissions in the following ways:
     FAX: 301-827-6870.
     Mail/Hand delivery/Courier [For paper, disk, or CD-ROM 
submissions]: Division of Dockets Management (HFA-305), Food and Drug 
Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
    To ensure more timely processing of comments, FDA is no longer 
accepting comments submitted to the agency by e-mail. FDA encourages 
you to continue to submit electronic comments by using the Federal 
eRulemaking Portal or the agency Web site, as described previously, in 
the ADDRESSES portion of this document under Electronic Submissions.
    Instructions: All submissions received must include the agency name 
and Docket No(s). and Regulatory Information Number (RIN) (if a RIN 
number has been assigned) for this rulemaking. All comments received 
may be posted without change to  https://www.regulations.gov, including 
any personal information provided. For additional information on 
submitting comments, see the ``Comments'' heading of the SUPPLEMENTARY 
INFORMATION section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to  https://www.regulations.gov and insert the 
docket number(s), found in brackets in the heading of this document, 
into the ``Search'' box and follow the prompts and/or go to the 
Division of Dockets Management, 5630 Fishers Lane, rm. 1061, Rockville, 
MD 20852.
    Information Collection Provisions: Submit written comments on the 
information collection provisions to the Office of Information and 
Regulatory Affairs, Office of Management and Budget (OMB).To ensure 
that comments on the information collection are received, OMB 
recommends that written comments be faxed to the Office of Information 
and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: 202-395-6974.

FOR FURTHER INFORMATION CONTACT: Margaret Oeller, Center for Veterinary 
Medicine (HFV-50), Food and Drug Administration, 7519 Standish Pl., 
Rockville, MD 20855, 240-276-9005, e-mail: Margaret.Oeller@fda.hhs.gov.

SUPPLEMENTARY INFORMATION:

I. Background

A. The Definition of Minor Use

    The MUMS act (Public Law 108-282) amended the Federal Food, Drug, 
and Cosmetic Act (the act) to provide incentives for the development of 
new animal drugs for use in minor animal species and for minor uses in 
major animal species. The MUMS act defines ``minor use'' as ``the 
intended use of a drug in a major species for an indication that occurs 
infrequently and in only a small number of animals or in limited 
geographical areas and in only a small number of animals annually'' 
(section 201(pp) of the act (21 U.S.C. 321(pp)). The major species are 
cattle, horses, swine, chickens, turkeys, dogs, and cats (21 U.S.C. 
321(nn)).
    Prior to enactment of the MUMS act, FDA defined minor use by 
regulation to

[[Page 14412]]

mean, ``the use of: * * * (b) new animal drugs in any animal species 
for the control of a disease that (1) occurs infrequently or (2) occurs 
in limited geographical areas'' (48 FR 1922; January 14, 1983 (former 
Sec.  514.1(d)(1) (21 CFR 514.1(d)(1))). The MUMS act narrowed this 
definition by restricting it to uses ``in only a small number of 
animals annually'' (21 U.S.C. 321(pp)).
    The legislative history of the MUMS act indicates that Congress 
intended that FDA further define minor use in a major species by 
regulation and that it do so ``by evaluating, in the context of the 
drug development process, whether the incidence of a disease or 
condition occurs so infrequently that the sponsor of a drug intended 
for such use has no reasonable expectation of its sales generating 
sufficient revenues to offset the cost of development'' (S. Rpt. 108-
226 at 12-13). The legislative history also notes that the new 
statutory definition for minor use ``incorporates the existing 
definition in the Code of Federal Regulations (21 CFR 514.1(d)(1)) with 
a further limitation to small numbers to assure that such intended uses 
will not be extended to a wider use'' (S. Rept. 108-226 at 12-13).
    Therefore, while the MUMS act establishes incentives for animal 
drug development for minor uses, it also limits the availability of 
those incentives in order to prevent them from stimulating ``wider 
use'' of new animal drugs marketed under the MUMS act provisions.
    Consistent with these dual aims of stimulating animal drug 
development for minor uses in major species and at the same time 
preventing ``wider use'' of such new animal drugs, the agency is 
proposing to define the term ``small number of animals'' for each major 
species that would constitute the upper limit of a ``minor use'' under 
the MUMS act. In keeping with the goal of creating a drug development 
incentive, the proposed definition would establish the number of 
animals eligible to be treated annually based on the number of animals 
that represents a drug market value that (relative to drug development 
costs) would not be likely to be pursued in the absence of the MUMS act 
incentives. Furthermore, as explained in the following section I.B of 
this document, FDA believes it is necessary to establish ``small number 
of animals'' differently for companion animals than for food-producing 
animals.

B. Companion Animals vs. Food-Producing Animals

    The issue of considering companion animals and food-producing 
animals separately in the context of establishing small numbers of 
animals was raised in comments on the MUMS designation proposed rule 
(70 FR 56394; September 27, 2005).
    One of the comments stated that the agency and sponsors would be 
best served by separating requirements for companion and food-producing 
animals because ``this separation would provide information clearly 
focused on the information necessary for each group'' (Ref. 1).
    A second comment requested that the agency ``consider separation of 
the requirements for companion animals from that for food-producing 
animals, as it is difficult to generalize across the two categories'' 
(Ref. 2).
    A third comment urged FDA to establish different sets of criteria 
for major species of food-producing animals and companion animals 
because ``economic criteria play differently into decisions to 
administer drugs to these two types of animals'' (Ref. 3).
    The agency generally agrees that food-producing and companion 
animals should be considered separately with respect to establishing 
small numbers, and notes that one of the principal reasons for 
considering food-producing and companion animals differently is that 
the decision to treat food-producing animals is almost exclusively 
based on an assessment of the economic value of the animals at the time 
treatment is needed. In addition, very often this decision involves 
administering a drug to all animals in a herd or flock, not just those 
showing signs of disease. Because the decision to administer a drug may 
be made more conservatively than for companion animals but, once made, 
often involves the exposure of more animals, there is no clear basis 
for estimating the likelihood of drug administration to individual 
food-producing animals.
    Other factors to consider are that there are much larger absolute 
numbers of food-producing animals than companion animals (in the case 
of chickens, approximately 9 billion) (Ref. 4), and that food-producing 
animals tend to be geographically concentrated to a greater extent than 
companion animals (Ref. 5). Each of these factors supports establishing 
``small numbers of animals'' for companion animals differently than 
``small numbers of animals'' for food-producing animals.
    When FDA proposed regulations to implement the designation 
provision of the MUMS act, the preamble contained considerable 
discussion regarding the definition of ``minor use,'' including the 
issues surrounding the use of the phrase ``small number of animals'' in 
the statutory definition of minor use. (See section II.A.2 Minor Use of 
70 FR 56394 at 56395.) Ultimately, the agency indicated that it did not 
have enough information to propose a ``small number of animals'' for 
each major species at that time, but indicated its intention to do so 
in the future, and requested information to facilitate that process.
    In response to this request, FDA received four comments concerning 
``small numbers of animals'' and minor use which the agency responded 
to in the preamble of the MUMS designation final rule. (See section 
III.B of 72 FR 41010 at 41013.) These comments were general in nature. 
This may be attributed, in part, to animal drug sponsors considering 
specific information regarding the cost of drug development, and the 
process by which they make decisions to pursue drug development, to be, 
``for the most part, confidential'' (Ref. 2). However, the agency was 
able to obtain information regarding average animal drug development 
costs as well as typical drug treatment costs for the seven major 
species. This information was obtained by contracting with a source 
with significant knowledge of the animal pharmaceutical industry that 
was also capable of collecting information from a large number of other 
sources (Ref. 6). From this source, the agency was also able to obtain 
general information regarding the incidence or prevalence of a large 
number of diseases and conditions of dogs, cats, and horses. Similar 
information regarding disease incidence or prevalence was not readily 
available for major food-producing species.
    In fact, in spite of repeated agency requests to the animal health 
industry to identify potential conditions of food-producing animals 
that might qualify as minor uses, very few conditions have been 
suggested; for example babesiosis in cattle.
    Therefore, following a careful analysis of the information noted 
previously, and based on early experience making designation 
determinations on a case-by-case basis, the agency is now proposing the 
establishment of a ``small number of animals'' for each of the seven 
major animal species.

II. Proposed Regulation

A. ``Small Numbers'' for Major Species of Companion Animals

1. The Value of Exclusivity
    There are three drug development incentives established by the 
Orphan Drug Act (Public Law 97-414) that are associated with human 
orphan product development: Seven years of exclusive marketing, an 
approximately 50 percent

[[Page 14413]]

reduction in development costs via tax reductions, and eligibility for 
grants to support development costs. Designated MUMS drugs are 
currently eligible for 7 years of exclusive marketing (section 573(c) 
of the act) (21 U.S.C. 360ccc-2(c)), and eventually will be eligible 
for grants (section 102(b)(8) of the MUMS act). A tax incentive for 
animal drug development was not included in this legislation. The 
designation provisions of the MUMS act went into effect upon enactment. 
Therefore, FDA must define ``small numbers'' as soon as possible.
    Consistent with the intent and the language of the MUMS act, 
``small number'' for each major companion animal species (horses, dogs, 
and cats) should represent a drug market value that (relative to drug 
development costs) would not be likely to be pursued in the absence of 
the MUMS act incentives. While incentives in addition to marketing 
exclusivity, such as the MUMS grant provisions, should they become 
available, would be expected to increase the likelihood of developing 
drugs for markets smaller than the proposed small number thresholds, 
the increase in incentives would not alter the small numbers 
themselves.
    To estimate the value of 7 years of exclusive marketing rights, we 
have examined the marketing exclusivity established by the Generic 
Animal Drug and Patent Term Restoration Act (GADPTRA) (Public Law 100-
670) as a benchmark for MUMS exclusivity. GADPTRA provides 5 years of 
exclusivity for the first-time approval of a drug in animals (section 
512(c)(2)(F) of the act) (21 U.S.C. 360b(c)(2)(F)). In enacting 
GADPTRA, Congress indicated that it viewed this term of exclusivity as 
a sufficient return on investment prior to generic competition to 
provide an incentive for the pioneer sponsor to develop a drug. 
Together with information regarding average animal drug development 
costs obtained by the agency (Ref. 6), we can calculate the relative 
value of the 5-year GADPTRA incentive. A basic principle of animal drug 
product development embedded in these data is that a sponsor will 
generally need to perceive a market potential in the third year of 
marketing equal to the development cost of the product in order to 
pursue development (Ref. 6). This third year market is apparently 
considered the mature market for the drug or, in industry parlance, the 
``going'' market (Ref. 6) and can serve as a basis for calculating the 
entire market potential of a drug prior to generic competition.
    As a hypothetical example, for a drug with a $15,000,000 ($15M) 
development cost for a particular intended use, the third year market 
would need to be perceived to be $15M in order to support product 
development. In this example, we project a ramp up to this ``going'' 
market value of $5M in the first year of marketing and $10M in the 
second. This means that under the 5-year term of exclusivity provided 
by GADPTRA, for a first-time approval of a drug in animals, a market 
prior to generic competition sufficient to justify pioneer sponsor 
investment relative to a $15M investment is $60M (i.e., $5M in year 1 + 
10M in year 2 + 15M in year 3 + 15M in year 4 + $15M in year 5).
    There may be a number of ways of interpreting the value of the 
additional 2 years of exclusivity provided to MUMS drugs; but, the most 
useful interpretation of the value of this extended marketing 
exclusivity is that it provides a sponsor an opportunity to lower its 
perception of an acceptable ``going'' market value to support drug 
development because the sponsor has longer to recoup development costs 
without competition. In the previous example, this would mean that the 
$60M fair and reasonable market value prior to competition established 
under GADPTRA could be spread over 7 years instead of 5 with the result 
that the ``going'' market value (third year market value) for a drug 
with development costs of $15M would only need to be $10M in order to 
support drug development (i.e., $3.5M + 6.5M + 10M + 10M + 10M + 10M + 
10M). Therefore, assuming for the purposes of a general estimate that 
the ramp-up to a going market is roughly linear as shown in the 
example, in a practical sense, the economic value of the 7 years of 
exclusive marketing rights for MUMS drugs is to lower the ``going'' 
market value needed to support drug development by about one-third. It 
should be noted that MUMS exclusive marketing rights provide protection 
from competition from all products with the same drug, same dosage 
form, and same intended use rather than just from generics under 
GADPTRA and this provides additional value to this incentive.
    Having estimated the market value of this MUMS incentive as a one 
third reduction in the ``going'' market value, in order to define 
``small number,'' the agency's task is then to estimate the number of 
animals of each major companion animal species the drug treatment of 
which represents a drug market value, that is about two-thirds of the 
estimated cost of drug development for each of these species.
    The agency is well aware of the enormous variability that will be 
encompassed by one estimate of drug development cost for each major 
companion animal species. For companion animals, an estimated range of 
drug development costs for first-time approval of an animal drug is $10 
to $20 million, with additional estimates as low as $5 million (Ref. 
6). Based on these estimates, the agency believes $15 million 
represents the average drug development cost.
2. Additional Factors Unique to Companion Animals
    The number of major species companion animals eligible for 
treatment on an annual basis that represents a drug market value 
roughly equivalent to two-thirds of the estimated drug development cost 
for these major species depends on a large number of factors affecting 
the drug treatment value of individual animals. For purposes of this 
discussion, drug treatment value means the portion of the cost of 
treating an animal with a given drug that is returned to the sponsor of 
the drug. Again, the agency acknowledges the great variability that 
will be encompassed in one estimate of drug treatment value for 
individual animals of each major companion animal species. The drug 
treatment value of individual animals is a portion of the cost that 
animal owners are willing to pay to have animals treated for a given 
condition. The sum of the drug treatment values of all of the animals 
treated with a given drug over the course of a year represents the 
sponsor's annual market value of that drug.
    Two of the most basic factors affecting drug market value are the 
species involved, which significantly affects the amount that people 
are willing to pay to treat an individual animal, and the percentage of 
the eligible population of animals that is actually treated under 
typical circumstances.
    Drug treatment values must be considered in the context of the cost 
of ancillary veterinary services associated with diagnosis and 
subsequent treatment. Clearly, costs ancillary to drug costs may 
decrease the likelihood of a decision to treat a given animal. For a 
given drug, the drug treatment value, the ancillary cost of treatment, 
the practitioner's decision to markup the drug cost to the client, and 
the decision of the client to accept the total cost of treating an 
animal are all inter-related. As the drug treatment value increases, 
other costs may decrease in order for the total cost of treatment to be 
made acceptable to a given client. Available information regarding the 
amount that people are willing to pay to treat representative 
conditions in the three

[[Page 14414]]

major companion animal species is quite variable (Ref. 6). However, 
based on available information, the agency concludes that companion 
animal owners generally will pay more to treat a horse than a dog, and 
more to treat a dog than a cat (Ref. 6). Based on available 
information, the agency further concludes that a reasonable annual drug 
treatment value for conditions significantly affecting the health of 
individual animals of these species is about $500 for horses, about 
$350 for dogs, and about $200 for cats (Ref. 6).
    For any given condition, many animals that are eligible to be 
treated will not actually be treated and the decision to treat will 
depend to a large extent on the nature of the condition and the cost of 
treatment. While an estimate of the likelihood of treatment must be 
very general to represent the large variability encompassed by that 
estimate, based on the factors described previously and currently 
available information (Ref. 7), the agency believes that it is 
reasonable to estimate a 50 percent non-treatment rate across all major 
companion animal species.
    Defining small numbers for companion animal species must take into 
account the uncertainty inherent in the estimates of prevalence or 
incidence of diseases or conditions that occur in relatively small 
numbers of animals. Therefore, a disease prevalence or incidence 
estimate submitted with a request for minor use designation will be 
considered relative to its degree of uncertainty to enable the agency 
to be 90 percent confident that the actual prevalence or incidence of 
the disease at issue is at or below the estimate, and that the 
resulting estimate is below the small number threshold.
    Even reasonably good estimates, such as those based on published 
articles involving actual tabulation of a number of cases of the 
disease or condition at issue gathered at multiple sites or over an 
extended time, or results of surveys involving about a hundred 
respondents, appear to present uncertainties on the order of +/- 10 
percent around the estimate. Since at least +/- 10 percent uncertainty 
is likely to exist for most estimates, based on an assumption of normal 
distribution, the agency has also increased the proposed small numbers 
for companion animals by approximately 13 percent to account for this. 
The practical effect of this approach is that an estimated prevalence 
or incidence that is on the order of 12 percent below the proposed 
threshold could be accepted as a small number with 90 percent 
confidence that it is truly below the threshold when the uncertainty 
associated with the estimate is on the order of +/- 10 percent or less, 
but could be rejected as a small number if the uncertainty associated 
with the estimate is sufficiently above 10 percent.
    Finally, proposed thresholds were somewhat increased to achieve 
``round'' numbers. Given the variability associated with several of its 
assumptions, the agency believes that this is acceptable.
    In summary, the following assumptions underlie the proposed ``small 
numbers'' definition for companion animals:
    (1) A reasonably representative development cost for a new 
companion animal drug is about $15 million.
    (2) Without incentives, a sponsor will generally need to perceive a 
market potential in the third year of marketing equal to the 
development cost of the product in order to pursue development.
    (3) Due to the extended exclusive marketing rights, the ``going 
market'' for a MUMS product can be about one-third less than the market 
normally required for a sponsor to pursue drug development.
    (4) Although the amount individual animal owners spend on companion 
animals is highly variable, companion animal owners generally will pay 
more for the treatment of a horse than for a dog and more for a dog 
than a cat.
    (5) Treatment costs ancillary to drug treatment value decrease the 
likelihood of a decision to treat a given animal and provide no return 
on investment to sponsors.
    (6) The drug treatment value for a horse is about $500, for a dog 
about $350, and for a cat about $200.
    (7) There is about a 50 percent non-treatment rate across all major 
companion animal species.
    (8) There is about 10 percent uncertainty in even the best 
published estimates of disease incidence or prevalence in companion 
animals.
    A ``small number of animals'' for each of the three major companion 
animal species can be calculated by incorporating these assumptions 
into the following formula:
[average companion animal drug development cost in dollars] - 1/3 = 
[minor use ``going market'' in dollars] / [average drug treatment value 
in dollars for each species] = [a preliminary small number of animals] 
x 2 (untreated factor) + 13% (uncertainty factor) + (increase to 
``round'' number) = [species specific ``small number of animals'']
    The agency recognizes that there is considerable variability within 
each of these assumptions. However, in order to consistently and fairly 
implement the designation provision of the MUMS act, FDA believes it is 
vital to establish one ``small number'' for each major species. The 
agency's task is to set these numbers so that they can be applied to a 
wide variety of requests for minor use designation. This is the same 
task that Congress undertook when it established by statute a threshold 
number of 200,000 for human orphan drugs (section 526(a)(2) of the act) 
(21 U.S.C. 360bb(a)(2)).
    Following this approach, the agency proposes defining ``small 
numbers'' for the major companion animal species as: 50,000 horses, 
70,000 dogs, and 120,000 cats affected annually.

B. ``Small Numbers'' for Major Species of Food-Producing Animals

    For the reasons discussed in Background section I.B. of this 
document, FDA is proposing to establish ``small numbers'' in a 
different manner for food-producing animals than for companion animals.
    Just as it did with respect to establishing ``small numbers'' for 
companion animals, the agency looked for a benchmark to serve as a 
basis for quantifying a threshold small number for each food-producing 
major species. Consistent with comments received on the MUMS 
designation proposed rule (Refs. 1 and 3), the benchmark that the 
agency found to be most appropriate for food-producing animals is based 
on a comparison between major and minor food-producing species, and the 
minor food-producing species most directly comparable to major food-
producing species with respect to drug development costs, animal 
husbandry, and the nature and scope of drug use is sheep.
    The market for new animal drug sales represented by that portion of 
the U.S. sheep population that could reasonably be treated on an annual 
basis qualifies for the incentives of MUMS designation because sheep 
are a minor species. The market for sheep drugs thus represents a 
market for food-producing animal species that Congress determined 
merited MUMS act incentives in order to stimulate drug development. 
Therefore, it is reasonable that an intended use in a major food-
producing species that represents a similar size market should also 
qualify for these incentives.
    To serve as a reasonable estimate of the size of the drug market 
for sheep, and to permit an equitable comparison across all major food-
producing species, the agency used the biomass of sheep presented to 
slaughter facilities in the United States in 2004 (the year of

[[Page 14415]]

passage of the MUMS act) as the basis for extrapolation to establish 
small numbers for major food-producing species. Because new animal 
drugs are usually dosed by weight, biomass serves as a reasonable basis 
for extrapolation because the amount of drug sold to treat a particular 
food-producing species over the course of a year roughly correlates to 
the total weight, or biomass, of the animal species being treated 
during that year.
    The biomass of sheep going to slaughter in 2004 represents slightly 
less than 50 percent of the total biomass of sheep existing in that 
year and, therefore, represents an assumption that 50 percent of sheep 
existing in 2004 might have been treated with a given drug during that 
year. Given the limited amount of information available regarding 
disease prevalence or incidence in food-producing animals, treatment of 
50 percent of the sheep population by a given drug is considered by the 
agency to be a reasonable estimate of the maximum drug market for the 
species. As previously noted, this estimate also represents a food-
producing species drug market that Congress established as eligible for 
MUMS act incentives.
    The amount of biomass from sheep (including lambs) arriving at 
slaughter facilities in 2004 (the total live weight of animals 
presented for slaughter) is reported by the U.S. Department of 
Agriculture (USDA) (Ref. 8) to be 380,000,000 (380M) pounds (lbs). 
Therefore, we propose to define the ``small number'' that represents 
``minor use'' for each major food-producing animal species as the 
number of animals going to slaughter in 2004 that produced a cumulative 
biomass equivalent to 380M lbs/year.
    Following this approach, based on USDA statistics for 2004 for 
cattle, pigs, turkeys and chickens (Refs. 4 and 8), 380M pounds of 
biomass (live weight at slaughter) roughly equates to 310,000 cattle 
(at 1,240 lbs/animal); 1,450,000 pigs (at 266 lbs/animal); 14,000,000 
turkeys (at 27 lbs/bird); and 72,000,000 chickens (at 5.3 lbs/bird).

C. Small Numbers as a Limitation to ``Wider Use''

    As noted previously, the legislative history of the MUMS act states 
that the statutory definition for minor use ``incorporates the existing 
definition in the Code of Federal Regulations (21 CFR 514.1(d)(1)) with 
a further limitation to small numbers to assure that such intended uses 
will not be extended to a wider use'' (S. Rept. 108-226 at 12 13). The 
agency believes that the ``small number of animals'' of each major 
species being proposed to clarify the definition of ``minor use'' meets 
the dual goals that Congress established in the legislative history of 
the MUMS act to provide added incentives for animal drug development 
while assuring that the proposed ``small numbers'' will not result in 
minor uses being ``extended to a wider use'' in major animal species.

D. Proposed ``Small Numbers''

    Based on an assessment of all of the factors noted previously, and 
for the purpose of further defining ``minor use'' under the Minor Use 
and Minor Species Animal Health Act of 2004 and 21 CFR 516.3, the 
agency proposes to define ``small numbers'' for each major species as 
equal to or less than each of the following numbers:

         Table 1.--Proposed Small Numbers for Each Major Species
------------------------------------------------------------------------
             Species                            Small Number
------------------------------------------------------------------------
Horses                             50,000
------------------------------------------------------------------------
Dogs                               70,000
------------------------------------------------------------------------
Cats                               120,000
------------------------------------------------------------------------
Cattle                             310,000
------------------------------------------------------------------------
Pigs                               1,450,000
------------------------------------------------------------------------
Turkeys                            14,000,000
------------------------------------------------------------------------
Chickens                           72,000,000
------------------------------------------------------------------------

    Finally, as noted in the response to comments on the proposed MUMS 
designation rule (see 72 FR 41010 at 41012), paragraph (c) of Sec.  
516.21 (21 CFR 516.21) (Documentation of minor use status) is 
unnecessary once small numbers of animals have been established. 
Because the agency is proposing to establish small numbers of animals 
at this time, the agency is also proposing to remove Sec.  516.21(c) 
and its associated burden on the animal pharmaceutical industry.

III. Legal Authority

    FDA's authority for issuing this proposed rule is provided by the 
Minor Use and Minor Species Animal Health Act of 2004 (section 571 of 
the 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 573 of the act, along with section 701(a) of 
the act (21 U.S.C. 371(a)) provide authority for this proposed rule. 
Section 701(a) authorizes the agency to issue regulations for the 
efficient enforcement of the act.

IV. Analysis of Economic Impacts

    FDA has examined the impacts of the proposed rule under Executive 
Order 12866 and 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 agency believes 
that this proposed rule is not a significant regulatory action as 
defined by the Executive order.
    The Regulatory Flexibility Act requires agencies to analyze 
regulatory options that would minimize any significant impact of a rule 
on small entities. Because the proposed rule is only expected to 
slightly reduce the administrative effort of ``minor use'' requestors 
while imposing no additional costs, the agency does not believe that 
this proposed rule would have a significant economic impact on a 
substantial number of small entities. FDA requests comment on this 
issue.
    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires 
that agencies prepare a written statement, which includes an assessment 
of anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The current threshold after adjustment 
for inflation is $127 million, using the most current (2006) Implicit 
Price Deflator for the Gross Domestic Product. FDA does not expect this 
proposed rule to result in any 1-year expenditure that would meet or 
exceeded this amount.
    FDA previously published both a proposed rule and final rule on the 
MUMS designation system. Each of these publications included analyses 
of the expected economic impacts of the creation and administration of 
the MUMS designation system as required by the Executive order and two 
statutes mentioned in the previous paragraphs. The final rule presented 
estimates of the annual costs of the MUMS designation system of about 
$65,000 annually. Additionally, the final rule provided some discussion 
of, but was not able to quantify, the expected benefits of the rule.
    The final rule included a statement that it would address the issue 
of

[[Page 14416]]

establishing a definition of ``small number'' of animals in a future 
rulemaking. This proposed rule proposes that definition of ``small 
number'' of animals for each of the seven major animal species as 
defined by the MUMS act, based on the data and analysis as described 
previously in this preamble.
    This proposed rule would set an upper limit on the number of 
animals of each of the seven major animal species for which a request 
for designation could be made under the ``minor use'' provisions of the 
MUMS designation final rule. FDA does not have any additional 
information to show that these proposed threshold numbers would 
significantly affect the expected number of MUMS designation requests 
that are received by the agency each year (estimated at 75 requests per 
year in the MUMS designation final rule). The proposed definition of a 
``small number'' of each of the seven major species reduces the 
ambiguity for ``minor use'' requestors. Additionally, this proposed 
rule would provide for a small reduction in administrative effort by 
``minor use'' requestors who would no longer be required to provide 
additional information on potential markets and drug development costs 
due to the proposed deletion of Sec.  516.21(c). As such, FDA has 
determined that the proposed rule would not impose any additional costs 
or provide any further health benefits beyond those contained in the 
MUMS designation final rule.

V. Paperwork Reduction Act of 1995

    This proposed rule does not contain new information collection 
provisions that would be subject to review by OMB, under the Paperwork 
Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520).
    Title: Setting ``Small Numbers of Animals'' for Determining Minor 
Use
    Description: This proposed rule is intended to revise the minor use 
provisions of 21 CFR part 516, subpart B. Part 516 contains the 
implementing regulations for the Minor Use and Minor Species Animal 
Health Act of 2004, and subpart B contains the designation provisions 
for minor use and minor species new animal drugs. Currently, requests 
for minor use designation are considered case-by-case by the agency 
based on product-specific financial information supporting minor use 
status included in the request. In order to further define minor use, 
this rule proposes seven threshold ``small numbers of animals,'' one 
for each major species, based on industry-wide economic or animal 
production data. With these numbers in place, drug sponsors requesting 
minor use designation will no longer be required to submit confidential 
product-specific financial information, as currently required in Sec.  
516.21(c), thus lowering their reporting burden somewhat. However, we 
anticipate that most requests for designation will be for minor 
species, not minor use, and furthermore, the current requirement for 
financial information is only one part of a request for designation, 
therefore, the paperwork burden currently assigned to 21 CFR 516.20 
will not be affected significantly.
    Information collection requirements in this section were approved 
by OMB and assigned OMB control number 0910-0605.

VI. Environmental Impact

    We have carefully 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.

VII. Federalism

    FDA has analyzed this proposed rule in accordance with the 
principles set forth in Executive Order 13132. FDA has determined that 
the proposed 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, 
the agency has tentatively concluded that the proposed 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.

VIII. Comments

    Interested persons may submit to the Division of Dockets Management 
(see ADDRESSES) written or electronic comments regarding this document. 
Submit a single copy of electronic comments or two paper copies of any 
mailed comments, except that individuals may submit one paper copy. 
Comments are to be identified with the docket number found in brackets 
in the heading of this document. Received comments may be seen in the 
Division of Dockets Management between 9 a.m. and 4 p.m., Monday 
through Friday.
    Please note that on January 15, 2008, the FDA Division of Dockets 
Management Web site transitioned to the Federal Dockets Management 
System (FDMS). FDMS is a Government-wide, electronic docket management 
system. Electronic comments or submissions will be accepted by FDA 
through FDMS only.

IX. References

    The following references have been placed on display in the 
Division of Dockets Management (see ADDRESSES), and may be seen by 
interested persons between 9 a.m. and 4 p.m., Monday through Friday.
    1. Public comment to Docket No. 2005N-0329, comment EC3, 
received February 2, 2006, submitted by American Veterinary Medical 
Association (AVMA), signed by Elizabeth Curry-Galvin.
    2. Public comment to Docket No. 2005N-0329, comment C5, received 
January 26, 2006, submitted by Animal Health Institute, signed by 
Richard Carnevale.
    3. Public comment to Docket No. 2005N-0329, comment EMC3, 
received December 12, 2005, submitted by Keep Antibiotics Working, 
signed by Rebecca Goldburg and Steve Roach.
    4. USDA/National Agricultural Statistics Service, ``Poultry 
Slaughter 2004 Annual Summary,'' February 2005.
    5. USDA/Animal and Plant Health Inspection Service, ``2004 
United States Animal Health Report,'' August 2005.
    6. Brakke Consulting, Inc., ``Disease Incidence Rates, Drug 
Development and Treatment Costs,'' September 2005.
    7. AVMA, ``U.S. Pet Ownership & Demographics Sourcebook,'' 2002.
    8. USDA/National Agricultural Statistics Service, ``2004 
Livestock Slaughter Report,'' March 2005.

List of Subjects in 21 CFR Part 516

    Administrative practice and procedure, Animal drugs, Confidential 
business information, Reporting and recordkeeping requirements.
    Therefore, under the Federal Food, Drug, and Cosmetic Act and under 
authority delegated to the Commissioner of Food and Drugs, it is 
proposed that 21 CFR part 516 be amended as follows:

PART 516--NEW ANIMAL DRUGS FOR MINOR USE AND MINOR SPECIES

    1. The authority citation for 21 CFR part 516 continues to read as 
follows:

    Authority: 21 U.S.C. 360ccc-1, 360ccc-2, 371.
    2. Amend Sec.  516.3 by adding a new definition in alphabetical 
order to paragraph (b) as follows:


Sec.  516.3  Definitions.

* * * * *
    (b) * * *
    Small number of animals means equal to or less than 50,000 horses, 
70,000 dogs, 120,000 cats, 310,000 cattle,

[[Page 14417]]

1,450,000 pigs, 14,000,000 turkeys, and 72,000,000 chickens.
* * * * *


Sec.  516.21  [Amended]

    3. Amend Sec.  516.21 by removing paragraph (c).

    Dated: January 29, 2008.
Jeffrey Shuren,
Associate Commissioner for Policy.
[FR Doc. E8-5385 Filed 3-17-08; 8:45 am]
BILLING CODE 4160-01-S