[Federal Register: March 7, 2000 (Volume 65, Number 45)]
[Rules and Regulations]
[Page 11881-11888]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07mr00-5]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 20

[Docket No. 98N-0518]


Public Information; Communications With State and Foreign
Government Officials

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule.

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SUMMARY: The Food and Drug Administration (FDA) is issuing final
regulations governing communications with State and foreign government
officials. The rule states that FDA may disclose confidential
commercial information to international organizations having
responsibility to facilitate global or regional harmonization of
standards and requirements. These disclosures will, in almost all
instances, occur only with the consent of the person who submitted the
confidential commercial information to FDA. The rule also streamlines
the process for FDA officials to disclose certain nonpublic,
predecisional documents (such as draft rules and guidance documents) to
State and foreign government officials. The rule does not alter current
procedures for sharing documents that contain confidential commercial
information. These changes are intended to facilitate information
exchanges with State and foreign governments and certain international
organizations.

DATES: This rule becomes effective on May 22, 2000.

FOR FURTHER INFORMATION CONTACT: Philip L. Chao, Office of Policy,
Planning, and Legislation (HF-23), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857, 301-827-3380.

SUPPLEMENTARY INFORMATION:

I. Introduction

    In the Federal Register of July 27, 1998 (63 FR 40069), FDA
published a proposed rule that would facilitate its communications with
foreign governments. Current FDA regulations at Sec. 20.89 (21 CFR
20.89) permit FDA to disclose confidential commercial information and
nonpublic, predecisional documents to foreign governments. Nonpublic,
predecisional documents are disclosed under Sec. 20.89(d) only if they
do not contain unredacted confidential commercial information (such as
draft FDA guidance documents or regulations). These disclosures are
subject to certain safeguards. These safeguards include obtaining a
written statement from the foreign government agency establishing that
agency's authority to protect the confidential commercial information
from public disclosure, and a written commitment not to disclose such
information without written permission from the person who created or
submitted the confidential commercial information (the ``sponsor'') or
written confirmation from FDA that the information is no longer
confidential. Similar safeguards exist regarding exchanges of
nonpublic, predecisional information.
    A similar regulation for communications with State government
officials exists at Sec. 20.88 (21 CFR 20.88).
    FDA published the proposed rule to accomplish several goals. First,
the proposed rule would amend Secs. 20.88(e)(1)(i) and 20.89(d)(1)(i)
to eliminate the requirement for the written statement and written
commitment for exchanges involving solely nonpublic, predecisional
information. As explained in the preamble to the proposed rule, it
appears that requiring written

[[Page 11882]]

statements from the receiving foreign government agencies is contrary
to customary international practice, in which drafts of such documents
are routinely shared with trusted individuals in foreign government
counterpart agencies as part of a well--understood and well--
established practice that provides that those individuals and their
agencies will not disclose the documents or make them public (63 FR
40069 at 40071). FDA's experience with Sec. 20.89 also indicates that
officials in some foreign agencies have been reluctant to execute these
written statements for various reasons, including uncertainty as to who
in their respective government agencies possesses the requisite
authority to sign such a statement, or concerns that the written
statements might, under their government's policies or laws, be
considered an international agreement that might require new national
legislation or legislative consent. FDA further noted in the preamble
to the proposed rule that, because the information exchanges in
question involve nonpublic, predecisional documents that do not contain
confidential commercial information, the written statements add little
value to protecting the information exchange process because only FDA's
deliberative interests would be directly affected by a premature public
disclosure.
    Second, the proposal would revise Sec. 20.89 to permit FDA to
disclose to international organizations both confidential commercial
information and nonpublic, predecisional information. Disclosures of
confidential commercial information to an international organization
would be subject to the same safeguards that apply to disclosures of
such information to foreign government agencies, including a written
statement, a written commitment, and, in most cases, the sponsor's
consent. The preamble to the proposed rule described an instance in
which the Pan American Health Organization (PAHO) requested certain
manufacturing and product quality information from FDA after a product
contamination incident, and FDA was unable to disclose the information
to PAHO until non-FDA sources had publicly disclosed the information
(63 FR 40069 at 40071). Thus, the proposal would address situations in
which an international organization seeks to obtain confidential
commercial information from FDA by moving the language regarding an
``official of a foreign government agency'' from Sec. 20.89(d)(3)--
where it applies only to disclosures of nonpublic, predecisional
documents--to a new Sec. 20.89(e), so that it would apply to all
disclosures under Sec. 20.89. The proposal would also revise the
reference to international organizations to refer to international
organizations that facilitate ``global or regional'' harmonization of
standards and requirements. The reference to ``regional'' harmonization
efforts would reflect the fact that some international organizations
operate primarily on a regional, rather than global, scale.
    Finally, the proposed rule would clarify that the term ``official
of a foreign government'' in proposed Sec. 20.89(e) includes, but is
not limited to, permanent and temporary employees of, and agents
contracted by, a foreign government. This clarification was needed
because the existing rule expressly mentioned agents, but not employees
of the foreign government (63 FR 40069 at 40071).

II. Discussion of Comments on the Proposed Rule

    FDA received four comments on the proposed rule, including one
comment from a foreign government. Three comments, submitted by
pharmaceutical companies and a trade association, opposed the rule. The
fourth comment, submitted by a foreign government agency, supported the
rule.

A. Sections 20.88(e)(1) and 20.89(d)(1)--Eliminating the Requirement of
a Written Statement and a Written Commitment From State and Foreign
Governments for Exchanges of Nonpublic, Predecisional Documents

    As stated earlier, the proposal would revise Secs. 20.88(e)(1) and
20.89(d)(1) to eliminate the requirement whereby a U.S. State or
foreign government agency official must provide a written statement
concerning that agency's ability to protect nonpublic, predecisional
documents from public disclosure and a written commitment not to
disclose any nonpublic, predecisional documents without FDA's written
confirmation that the document no longer has nonpublic status.
    1. One comment from a foreign government agency stated that it
``welcome[s] FDA's recognition that the previous requirement for a
written undertaking has been contrary to customary international
practice'' and that it, too, was aware that ``in some countries legal
difficulties have arisen over providing FDA with such undertakings.''
The comment stated that the rule would help simplify communications
between the two countries.
    In contrast, one comment from a pharmaceutical trade association
opposed giving nonpublic, predecisional documents to State and foreign
governments, stating that FDA's rationale was ``difficult to follow,''
that the written statements are not ``overly burdensome,'' and that FDA
would be ``putting the competitive interests of United States companies
at risk.'' The comment added that ``the concerns expressed by foreign
governments are not applicable to United States government agencies''
and that ``the exemptions from [the Freedom of Information Act] for
pre-decisional documents and confidential commercial information should
not be undermined by allowing this information to be available at the
state level by virtue of differing state laws.''
    The final rule eliminates the need for a written statement and a
written commitment from State and foreign government agencies when
exchanges of nonpublic, predecisional documents are involved. FDA
reiterates that these are documents that FDA creates; examples include
draft regulations and draft guidance documents. Nonpublic,
predecisional documents prepared by FDA normally do not contain
confidential commercial information. If FDA prepared a document that
contained confidential commercial information, that material would be
considered, for purposes of Secs. 20.88 and 20.89, to be confidential
commercial information, rather than a nonpublic, predecisional
document. Therefore, the provisions of Secs. 20.88 and 20.89 pertaining
to confidential commercial information would apply. Alternatively, FDA
could redact the confidential commercial information before providing
the nonpublic, predecisional document to the State or foreign
government agency. Because the nonpublic, predecisional documents that
FDA would provide to State and foreign governments would not contain
confidential commercial information, their exchange would not place
U.S. companies at a competitive disadvantage internationally or
domestically.
    The written statement and written commitment requirement for
nonpublic, predecisional documents that published in the Federal
Register of December 8, 1995 (60 FR 63372) (hereinafter referred to as
the 1995 final rule), was more formal than customary international
practice and presented legal or legislative challenges to some foreign
governments. The comment from the foreign government clearly and
unequivocally supports FDA's rationale. While the comment opposing the
proposal states that U.S. government agencies do not have to remedy
issues

[[Page 11883]]

or problems faced by a foreign government, FDA cannot ignore the fact
that the written statement and written commitment requirement departed
from customary international practice and impeded the very exchange of
information that the 1995 final rule was intended to promote.
    To illustrate the problem, FDA has received requests for draft
documents from certain foreign government officials in order to
harmonize international regulatory efforts on a particular subject. The
written statement and written commitment requirement, on occasion, has
presented an obstacle to the information exchange because the foreign
government agency was uncertain as to whether such a statement, under
the foreign country's law, would be considered to be a treaty or
international agreement or because the foreign government agency was
uncertain as to which official had the authority to sign a written
statement and written commitment of this sort and provide it to another
country. These uncertainties frustrated the intent behind Sec. 20.89
because, without the written statement and written commitment from the
foreign government, FDA could not provide the draft to the foreign
government, and the opportunity for international collaboration on the
draft was lost. Thus, contrary to the opposing comment's belief, a
foreign government's ``problems'' with the written statement and
written commitment requirement can affect FDA as well as the foreign
government agency.
    FDA also does not accept the suggestion that nonpublic,
predecisional information should not be available to State governments.
FDA's regulations have provided for exchanges of nonpublic,
predecisional information with certain State officials (those who have
been commissioned under section 702 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 372) and those under contract with FDA) and
with State governments since the 1995 final rule, and the 1998 proposal
did not contain any amendments or revisions (aside from the removal of
the written statement and written commitment requirement) that would
affect the availability of nonpublic, predecisional information to
State government agencies. FDA further notes that it would be an odd
result if FDA could provide nonpublic, predecisional information to a
foreign government, but could not provide the same information to a
State government in the United States. Similarly, it would be an odd
result if FDA required State government agencies to provide greater
assurance, compared to foreign governments, that they would protect
nonpublic, predecisional documents from disclosure, especially when, in
both cases, it is only governmental interests, not individual
companies' interests, that would be adversely affected by an
unauthorized disclosure.

B. Section 20.89(e)--Amending the Term ``Official of a Foreign
Government Agency''

1. The Inclusion of Temporary and Permanent Employees and Agents
    As stated earlier, proposed Sec. 20.89(e) would clarify that the
term ``official of a foreign government'' includes both temporary and
permanent foreign government employees and agents. FDA proposed this
change because the existing language, at Sec. 20.89(d)(3), expressly
mentions agents, but not employees, of a foreign government. The
proposal also would construe the term ``official of a foreign
government'' as including temporary as well as permanent employees and
agents. The inclusion of temporary employees and agents is meant to
cover those situations where a foreign government employee is
temporarily assigned to an international organization.
    2. One comment noted that the proposal did not expressly state
whether foreign consultants are subject to any restrictions on the
disclosure of information that FDA provides to a foreign government or
to an international organization. The comment further noted that
proposed Sec. 20.89(e) would require written statements from an
international organization and individuals in the international
organization, but that proposed Sec. 20.89(d)(1)(i) would eliminate the
written statements.
    The reference to employees and agents in proposed Sec. 20.89(e) was
not intended to exclude consultants to a foreign government agency. FDA
considers consultants to be ``agents'' within proposed Sec. 20.89(e)
and expects that such persons will adhere to the foreign government's
written statement and written commitment regarding confidential
commercial information and adhere to the foreign government agency's
customary practice of not disclosing nonpublic, predecisional
information supplied by a different government. In the event of an
unauthorized disclosure, FDA will hold both the responsible individual
and the foreign government agency accountable, and will take
appropriate action.
    As for the comment's statement that proposed Secs. 20.89(d)(1)(i)
and 20.89(e) conflict on the need for a written statement and written
commitment, FDA agrees and has modified Sec. 20.89(e) to clarify that
written statements and written commitments are required on behalf of
both the international organization and the individual involved when
confidential commercial information is being disclosed.
2. Providing Confidential Commercial Information to International
Organizations
    Several comments strongly opposed the language in proposed
Sec. 20.89(e) which would enable FDA to provide confidential commercial
information to international organizations.
    3. Three comments challenged the agency's basis for the proposal.
Two comments argued that an international organization such as PAHO has
no role in matters that would require it to receive confidential
commercial information, has no enforcement authority, and might not
even be considered to have a role in harmonizing standards or
requirements. Alternatively, one comment stated that, even if an
international organization is responsible for global or regional
harmonization of standards, it is unclear why such international
organizations need confidential commercial information, especially in
situations where there is no public health concern.
    The preamble to the proposed rule described an incident in Haiti
where PAHO assisted Haiti's Ministry of Health in investigating a
kidney failure epidemic in which nearly 90 children died. The problems
were traced to a contaminated liquid acetaminophen product manufactured
in Haiti, and FDA assisted the Haitian government by examining the
pharmaceutical company, obtaining samples, and conducting laboratory
tests. FDA prepared an inspection report that contained some
confidential commercial information. Consequently, when PAHO requested
the report, FDA was unable to provide the information because the
existing FDA regulation did not provide for disclosing confidential
commercial information to an international organization. FDA provided
the information to PAHO only after FDA learned that non-FDA sources had
publicly disclosed the information.
    This example illustrates that an international organization may,
indeed, have a need for confidential commercial information from FDA.
FDA also disagrees with the comment that suggested that no public
health concerns existed in the PAHO example because, at the time of the
investigation, the number of children who had died or

[[Page 11884]]

had become ill due to the contaminated product was rising, and
officials were not certain about the source of the contamination or
whether other drug products had been contaminated.
    However, FDA acknowledges that, in the PAHO example, the
international organization was working to promote and coordinate public
health efforts rather than taking an enforcement role or harmonizing
standards or requirements. Therefore, FDA has clarified the definition
of ``international organization'' to extend to international
organizations whose responsibilities include promoting and coordinating
public health efforts, consistent with the Haiti example described in
the preamble to the proposed rule.
    FDA also points out that the World Health Organization (WHO), as
well as PAHO (the WHO's regional body), does have a responsibility for
harmonization and product standards.
    4. Three comments also sought specifics as to which international
organizations might be able to receive confidential commercial
information from FDA under the rule. One comment suggested that FDA
establish standards and procedures to determine which international
organizations should receive confidential commercial information; the
comment would have FDA identify such organizations through notice and
comment rulemaking and require international organizations to give FDA
a summary of their charters, purposes, membership, and internal rules
for protecting confidential commercial information from public
disclosure. One comment would permit FDA to disclose confidential
commercial information only to international organizations whose
regulatory responsibilities are established by law, treaties, or other
acts of government, and would exclude private or nongovernmental
organizations. Another comment would exclude nongovernmental
organizations. The comment stated that employees of nongovernmental
organizations may not be subject to any laws preventing unauthorized
disclosures and might not be ``legally or morally bound'' to protect
confidential commercial information provided by FDA.
    Although FDA believes that many of the comments' suggestions would
encumber the agency with excessive procedures and requirements, the
agency agrees that the reference to international organizations should
be more specific. The proposal was not intended to extend disclosures
of confidential commercial information to private or nongovernmental
organizations. Consequently, FDA has revised proposed Sec. 20.89(e) so
that the term ``international organization'' refers only to
international organizations that are established by law, treaty, or
other governmental action and that have the responsibility to
facilitate global or regional harmonization of standards and
requirements in FDA's area of responsibility or to promote and
coordinate public health efforts. Thus, the international organizations
subject to revised proposed Sec. 20.89(e), therefore, are those that
(unlike private or nongovernmental organizations) generally have
statutes, regulations, or other obligations to protect confidential
commercial information from public disclosure. Additionally, FDA will
continue to require international organizations to provide written
statements establishing their authority to protect confidential
commercial information from public disclosure and written commitments
not to disclose such information without the sponsor's written
permission or written confirmation from FDA that the information is no
longer confidential.
    The agency declines, however, to amend the rule to establish notice
and comment rulemaking procedures to determine which international
organizations may be eligible to receive confidential commercial
information from FDA. The agency reiterates that, in almost all cases,
exchanges of confidential commercial information involve a sponsor's
consent. Thus, the burdens on the agency associated with notice and
comment rulemaking procedures for determining an international
organization's ``eligibility'' to receive information outweigh any
benefits from such procedures in this instance.
    FDA also declines to amend the rule to create an explicit
``application'' to be submitted by international organizations.
Currently, for all disclosures to State and foreign governments
(including international organizations), FDA carefully examines the
reasons why the requesting body needs confidential commercial
information, the statutory and regulatory mechanisms for protecting
information supplied by FDA, and the identities of persons who will
receive the information. Requiring a summary of the international
organization's charter, purpose, and membership could be done on a
case-by-case basis, if necessary, but often would be unnecessary. The
United States is a member of the international organizations that would
generally be the recipients of information under the rule and,
therefore, FDA already possesses information on their charters,
purposes, and memberships. (For example, the United States is a member
of the PAHO and the WHO, and information on their charters and
memberships is readily available.) If an international organization
requests confidential commercial information under Sec. 20.89, and the
United States is not a member of that organization, FDA will carefully
review the request and will seek whatever documents it feels are
necessary to evaluate the request.
    5. One comment stated that developing countries that lack
sophisticated health systems would be the countries most likely to rely
on international organizations in a public health crisis. However, the
comment explained, developing countries often lack intellectual
property protections within their legal systems. The comment added that
if confidential commercial information were ``routinely'' released to
international organizations, there would be a corresponding increased
risk of ``routine'' abuse of intellectual property protections
worldwide, without any benefit to U.S. manufacturers or to the public
health of the United States. The comment claimed that the rule would
benefit only foreign organizations and foreign competitors to U.S.
manufacturers.
    The comment misinterprets the rule. Under Sec. 20.89(c)(1)(i), a
foreign government agency seeking confidential commercial information
from FDA must provide both a written statement establishing its
authority to protect confidential commercial information from public
disclosure and a written commitment not to disclose such confidential
commercial information ``without the written permission of the sponsor
or written confirmation by the Food and Drug Administration that the
information no longer has confidential status'' (emphasis added).
Additionally, under Sec. 20.89(c)(1)(ii)(A), FDA must determine that
the sponsor of the product application has provided written
authorization for the disclosure, or, under Sec. 20.89(c)(1)(ii)(B),
that disclosure would be in the interest of public health by reason of
the foreign government's possessing information concerning the safety,
efficacy, or quality of a product or information concerning an
investigation. Under the final rule, these safeguards also would apply
to disclosures of confidential commercial information to an
international organization. FDA is not proposing, and has never
proposed, to disclose confidential commercial information to a foreign
government or to an international organization on a routine basis.

[[Page 11885]]

    The agency notes that, under existing FDA regulations, an
international organization that provides the necessary written
statement and written commitment in order to obtain confidential
commercial information from FDA cannot redisclose that confidential
commercial information to a foreign government (or to any other party)
without the sponsor's written permission or written confirmation from
FDA that the information no longer has nonpublic status (see 21 CFR
20.89(c)(1)(i)). Thus, international organizations receiving
confidential commercial information under this rule will not be
conduits for disclosures of confidential commercial information to
foreign governments without permission from the sponsor or from FDA. If
an international organization intends to request confidential
commercial information from FDA and then provide that information to a
foreign government, both the international organization and the foreign
government must provide the necessary written statements and
commitments to FDA to ensure that the information is protected.
    Moreover, as stated in the preamble to the proposed rule, in almost
every case, disclosures of confidential commercial information to
foreign governments have occurred with the sponsor's consent, and only
after the foreign government has provided the necessary written
statements (see 63 FR 40069 at 40070). Contrary to the comment's
inference about the benefits that would flow to developing countries,
the exchanges to date have been mostly to other developed countries.
The disclosures have generally benefitted the sponsors of the
confidential commercial information by facilitating approval or
marketing decisions for the sponsor's product.
    FDA further notes that it is conscious of intellectual property
concerns, particularly for pharmaceuticals, and is quite aware of its
obligation under Article 39.3 of the Agreement on Trade-related Aspects
of Intellectual Property Rights to protect undisclosed test or other
data against unfair commercial use. Article 39.3 requires governments
to protect such data against public disclosure ``except where necessary
to protect the public, or unless steps are taken to ensure that the
data are protected against unfair commercial use.'' The requirement in
Sec. 20.89(c)(1) for written statements and the general requirement for
sponsor consent are intended to help protect confidential commercial
information from unauthorized public disclosure.
    6. Two comments stated that FDA should require or reaffirm that it
will obtain a sponsor's consent before providing confidential
commercial information to a foreign government or to an international
organization. One comment would amend Sec. 20.89(d)(1)(ii) to require
written confidentiality agreements from international organizations and
individuals in the organization who are to receive confidential
commercial information and to require consent from sponsors.
    FDA reiterates that neither the proposed rule nor this final rule
changes the requirements for written statements, written commitments,
and sponsor consent for exchanges involving confidential commercial
information. The requirements for disclosures of confidential
commercial information are found at Sec. 20.89(c). The elimination of
the written statement and written commitment requirement applies solely
to exchanges involving nonpublic, predecisional documents under
Sec. 20.89(d). As stated earlier, nonpublic, predecisional documents
are prepared by FDA and normally do not contain any confidential
commercial information.
    Thus, FDA declines to amend Sec. 20.89(d)(1)(i) as suggested by the
comment because that paragraph pertains to exchanges of nonpublic,
predecisional information.
    7. One comment would amend the rule to require a sponsor's consent
for all disclosures of confidential commercial information to
international organizations. The comment stated that FDA has no
obligation to balance the public interest against a sponsor's interest
in maintaining the confidentiality of information. The comment added
that if FDA engages in such balancing of interests, it should provide
written notice to the sponsor describing the confidential commercial
information that has been provided to an international organization
and, furthermore, that only the Commissioner of Food and Drugs (the
Commissioner) should be authorized to make such disclosures to an
international organization.
    Similarly, another comment stated that if FDA discloses
confidential commercial information to an international organization,
without a sponsor's consent, under the ``public interest'' at
Sec. 20.89(c)(1)(ii), the agency should specify the public health
circumstances justifying the disclosure.
    When FDA first issued the final rule codifying Sec. 20.89(c)(1)(ii)
in 1993, it explained that there are situations in which it might be
inappropriate to seek a sponsor's consent to a disclosure of
confidential commercial information. The preamble to the 1993 final
rule gave examples of possible situations in which a sponsor may have
engaged in deliberate fraud or misrepresentation, or situations in
which FDA might wish to share confidential commercial information
obtained through an FDA investigation for a foreign government's use in
its own regulatory efforts (see 58 FR 61598 at 61601 (November 19,
1993)). FDA stated that these types of disclosures to foreign
government counterparts ``may facilitate efforts to keep unapproved,
adulterated, counterfeit, or misbranded products off world markets as
well as American markets.'' This rationale still applies, and,
therefore, FDA declines to amend the rule to require a sponsor's
consent in all disclosures of confidential commercial information.
    As for the comments asking FDA to provide written notice to a
manufacturer or to explain the public interest reasons behind a
disclosure, FDA responded to similar comments in 1995 when it issued a
final rule amending Secs. 20.88 and 20.89. Those comments in 1995
suggested that FDA provide summaries of the information disclosed to
foreign governments. In the preamble to the 1995 final rule, FDA stated
that such summaries would be inappropriate or unnecessary (see 60 FR
63372 at 66379). FDA explained that if a foreign government were
considering whether to take action against a particular product,
requiring FDA to provide a summary to the product's manufacturer would
alert the manufacturer to a potential enforcement action and would,
therefore, be inappropriate. If FDA were helping a foreign government
identify fraudulent goods and provided confidential commercial
information to help distinguish legitimate products from fraudulent
ones, providing a summary to the manufacturer would be unnecessary
because the manufacturer would already know the information that was
the basis of the summary.
    FDA's rationale for not providing summaries also applies to the
written notice and identification of the public health interests sought
by the comments. If FDA were providing confidential commercial
information to a foreign government to assist that government in a
decision whether to take action against a particular product, providing
a written notice to the product's manufacturer would alert the
manufacturer to a potential enforcement action and might undermine or
compromise the enforcement action. Similarly, stating that the public
health interest involved an enforcement action would alert the
product's manufacturer and might undermine or compromise any
enforcement action. Thus, FDA

[[Page 11886]]

declines to revise the rule to require the agency to provide a written
notice to a sponsor or to specify the public health interest reasons
behind a disclosure.
    As for the comment asking that the Commissioner be the only person
authorized to disclose confidential commercial information to an
international organization, FDA declines to amend the rule to impose
such a limitation. The authority to disclose confidential commercial
information under Sec. 20.89 was delegated to the Associate
Commissioner for Regulatory Affairs and various office and center
officials (such as center directors and deputy directors) in 1994.
Similar authority, for disclosures of confidential commercial
information under Sec. 20.88, was delegated in 1997. These delegations
of authority have made exchanges of confidential commercial information
with State and foreign government officials more efficient. Given the
agency's experience with these previous delegations of authority, the
agency sees no reason to limit or otherwise restrict the authority to
disclose such information to international organizations.
    8. One comment asked FDA to ``set out the means by which it can and
will enforce any confidentiality agreement with an international
organization.'' The comment said this information would be relevant to
a sponsor's willingness to consent to releasing confidential commercial
information to an international organization.
    In previous rulemakings, FDA has stated that it would discontinue
cooperative ventures with any State or foreign government that failed
to honor its written commitment to protect the confidential commercial
information provided by FDA (see 60 FR 63372 at 63377). The agency will
extend this policy to cover international organizations receiving
information from FDA.
    The agency also notes that international organizations might cease
to enjoy immunity and might face serious consequences if a person in
the international organization made an unauthorized disclosure of
confidential commercial information or if the international
organization violated its written commitment. Under U.S. law, the
President may, by Executive Order, designate certain international
organizations as being entitled to the privileges, exemptions, and
immunities that are normally afforded to foreign governments (see 22
U.S.C. 288). These privileges, exemptions, and immunities are
significant, and include treatment comparable to that enjoyed by
foreign governments as regards, for example, immunity from suit and
judicial process (22 U.S.C. 288a), customs duties and taxes relating to
importation (id.), and property taxes imposed by Congress (22 U.S.C.
288c). The President may revoke the designation of an international
organization ``if in his judgment such action should be justified by
reason of the abuse by an international organization or its officers
and employees of the privileges, exemptions, and immunities provided *
* *'' (id.) Thus, an international organization that failed to protect
confidential commercial information would risk losing some or all of
these significant privileges, exemptions, and immunities.
    One should note that several international organizations that might
conceivably request confidential commercial information from FDA are
designated as international organizations under 22 U.S.C. 288. These
include the Food and Agriculture Organization, PAHO (or PAHO/PASB (Pan
American Sanitary Bureau)), and WHO.
    Additionally, for officers and employees of international
organizations, the immunity extends only to ``acts performed by them in
their official capacity and falling within their functions * * * except
insofar as such immunity may be waived by the foreign Government or
international organization concerned'' (see 22 U.S.C. 288d(b)). An
international organization official or employee who deliberately
violates the organization's written commitment to FDA to protect
confidential commercial information might not be considered to be
acting within his or her ``official capacity'' or within his or her
functions and, as a result, would not enjoy immunity from suit. For
example, in United States v. Enger, 472 F. Supp. 490, 502 (D. N.J.
1978), a Federal district court rejected several defendants' claim that
they could not be prosecuted for espionage because they were United
Nations employees. The court stated, ``Espionage, the crime with which
the defendants are charged, is, of course, not one of the functions
performed in the defendants' official capacities with the United
Nations'' (id.) (see also Rendall-Speranza v. Nassim, 107 F.3d 913, 920
(D.C. Cir. 1997) (plaintiff's failure to question a court's acceptance
of the defendant organization's admission that its employee's act of
battery was within the scope of his employment meant that the employee
was immune from suit for battery under 22 U.S.C. 288d(b))).
    International organizations that are not designated by an Executive
Order do not enjoy the privileges, exemptions, and immunities as
provided in 22 U.S.C. 288 through 288d. As a result, they, their
officials, and their employees might not be immune from suit. In the
event of an unauthorized disclosure of confidential commercial
information, a sponsor would be able to pursue legal action against the
undesignated international organization.
    9. One comment stated that if an international organization
requested confidential commercial information on an alleged health
hazard, but the relevant foreign government had not asked for such
information, FDA should consult the sponsor and allow the sponsor to
handle any disclosure issues directly with the international
organization. The comment added that if FDA were dissatisfied with the
outcome between the sponsor and the international organization, FDA
could release the data if it determined that a health hazard exists.
The comment also stated that FDA should first determine that the
international organization has responsibilities that require it to have
the type of confidential commercial information requested.
    FDA reiterates that, for almost all disclosures involving
confidential commercial information to a State government, foreign
government, or international organization, the sponsor's consent to
disclosure will be obtained. However, the agency does not object to a
sponsor's making individual disclosure arrangements with an
international organization and agrees with the comment that, in some
cases, the comment's approach would be practical.
    Furthermore, disclosures under Sec. 20.89 have been made on a case-
by-case basis, and FDA will consider the foreign government's or
international organization's need for the requested information when
deciding whether to disclose information. The regulation is intended to
facilitate communication with foreign governments and international
organizations; it does not compel the agency to disclose confidential
commercial information to a foreign government or to an international
organization. Thus, if an international organization requests
confidential commercial information without any apparent reason, FDA
may decline to grant the request.
3. Editorial Changes
    Proposed Sec. 20.89(e) stated, in part, that for exchanges of
confidential commercial information with an official of an
international organization, the written statement and commitment
``shall be provided by both the

[[Page 11887]]

organization and the individual.'' FDA, on its own initiative, is
replacing the words ``provided by'' with ``provided on behalf of'' to
make the sentence more accurate because, in a literal sense, a document
cannot be ``provided by'' an inanimate body such as an international
organization. Instead, persons provide the required statements and
commitments ``on behalf of'' the organization.
    Additionally, Secs. 20.88(e) and 20.89(d) authorize the Deputy
Commissioner for Policy to authorize the disclosure of nonpublic,
predecisional documents to State and foreign government officials.
Because FDA has reorganized its offices, the functions that were
handled by the then-Deputy Commissioner for Policy are now assigned to
the Senior Associate Commissioner for Policy, Planning, and
Legislation, and international policy functions that were in the then-
Office of Policy are now assigned to the Office of International and
Constituent Relations. Consequently, FDA is revising Secs. 20.88(e) and
20.89(d) to refer to the Senior Associate Commissioner for Policy,
Planning, and Legislation and to the Deputy Commissioner for
International and Constituent Relations.

III. Environmental Impact

    The agency has 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.

IV. Federalism

    FDA has analyzed this final rule in accordance with the principles
set forth in Executive Order 13132. FDA has determined that the rule
does not contain policies that have federalism implications as defined
in the order and, consequently, a Federalism summary impact statement
is not required.

V. Analysis of Impacts

    FDA has examined the impacts of this final rule under Executive
Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the
Unfunded Mandates Reform Act of 1995 (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 new benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity). The agency believes this
final rule is consistent with the regulatory philosophy and the
principles identified in the Executive Order. In addition, this final
rule is not an economically significant regulatory action as defined in
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. The final rule will have no significant economic
impact on a substantial number of small entities under the Regulatory
Flexibility Act because it regulates only conduct of FDA, State and
foreign governments, and international organizations, and not small
entities under the Regulatory Flexibility Act. The final rule provides
for FDA disclosure of confidential commercial information to
international organizations subject to the same safeguards against
public disclosure of that information that apply in the case of
disclosures to foreign government agencies. These disclosures would
likely facilitate marketing review and approval of various FDA-
regulated products in foreign countries, and disclosures would almost
always occur only with the consent of the business that generated the
confidential commercial information. The final rule also provides for
FDA disclosure of nonpublic, predecisional documents and other
nonpublic information created by FDA to State governments, foreign
governments, and international organizations without the need to obtain
written assurances. These beneficial effects outweigh any possible
adverse impact. Thus, the agency certifies that this rule will not have
a significant economic impact on a substantial number of small
entities, and, under the Regulatory Flexibility Act, no further
analysis is required.
    The Unfunded Mandates Reform Act requires that agencies prepare an
assessment of anticipated costs and benefits before proposing any rule
that may result in an expenditure in any one year by State, local, and
tribal governments, in the aggregate, or by the private sector of $100
million (adjusted annually for inflation). This rule does not impose
any mandates on State, local, or tribal governments, nor is it a
significant regulatory action under the Unfunded Mandates Reform Act.

VI. Paperwork Reduction Act of 1995

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

List of Subjects in 21 CFR Part 20

    Confidential business information, Courts, Freedom of information,
Government employees.
    Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
20 is amended as follows:

PART 20--PUBLIC INFORMATION

    1. The authority citation for 21 CFR part 20 continues to read as
follows:

    Authority: 5 U.S.C. 552; 18 U.S.C. 1905; 19 U.S.C. 2531-2582; 21
U.S.C. 321-393, 1401-1403; 42 U.S.C. 241, 242, 242a, 242l, 242n,
243, 262, 263, 263b-263n, 264, 265, 300u-300u-5, 300aa-1.

    2. Section 20.88 is amended by revising paragraph (e)(1) to read as
follows:

Sec. 20.88  Communications with State and local government officials.

* * * * *
    (e)(1) The Senior Associate Commissioner for Policy, Planning, and
Legislation, or the Deputy Commissioner for International and
Constituent Relations, or any other officer or employee of the Food and
Drug Administration whom the Senior Associate Commissioner for Policy,
Planning, and Legislation or the Deputy Commissioner for International
and Constituent Relations may designate to act on their behalf for the
purpose, may authorize the disclosure to, or receipt from, an official
of a State government agency of nonpublic, predecisional documents
concerning the Food and Drug Administration's or the other government
agency's regulations or other regulatory requirements, or other
nonpublic information relevant to either agency's activities, as part
of efforts to improve Federal-State uniformity, cooperative regulatory
activities, or implementation of Federal-State agreements, provided
that:
    (i) The State government agency has the authority to protect such
nonpublic documents from public disclosure and will not disclose any
such documents provided without the written confirmation by the Food
and Drug Administration that the documents no longer have nonpublic
status; and
    (ii) The Senior Associate Commissioner for Policy, Planning, and
Legislation or the Deputy Commissioner for International and
Constituent Relations or their designee makes the determination that
the exchange is reasonably necessary to improve Federal-State
uniformity, cooperative

[[Page 11888]]

regulatory activities, or implementation of Federal-State agreements.
* * * * *

    3. Section 20.89 is amended by revising paragraph (d)(1); by
removing paragraph (d)(3); and by adding paragraph (e) to read as
follows:

Sec. 20.89  Communications with foreign government officials.

* * * * *
    (d)(1) The Senior Associate Commissioner for Policy, Planning, and
Legislation, or the Deputy Commissioner for International and
Constituent Relations, or any other officer or employee of the Food and
Drug Administration whom the Senior Associate Commissioner for Policy,
Planning, and Legislation or the Deputy Commissioner for International
and Constituent Relations may designate to act on their behalf for the
purpose, may authorize the disclosure to, or receipt from, an official
of a foreign government agency of nonpublic, predecisional documents
concerning the Food and Drug Administration's or the other government
agency's regulations or other regulatory requirements, or other
nonpublic information relevant to either agency's activities, as part
of cooperative efforts to facilitate global harmonization of regulatory
requirements, cooperative regulatory activities, or implementation of
international agreements, provided that:
    (i) The foreign government agency has the authority to protect such
nonpublic documents from public disclosure and will not disclose any
such documents provided without the written confirmation by the Food
and Drug Administration that the documents no longer have nonpublic
status; and
    (ii) The Senior Associate Commissioner for Policy, Planning, and
Legislation or the Deputy Commissioner for International and
Constituent Relations or their designee makes the determination that
the exchange is reasonably necessary to facilitate global harmonization
of regulatory requirements, cooperative regulatory activities, or
implementation of international agreements.
* * * * *
    (e) For purposes of this section, the term ``official of a foreign
government agency'' includes, but is not limited to, employees (whether
temporary or permanent) of and agents contracted by the foreign
government, or by an international organization established by law,
treaty, or other governmental action and having responsibility to
facilitate global or regional harmonization of standards and
requirements in FDA's areas of responsibility or to promote and
coordinate public health efforts. For such officials, the statement and
commitment required by paragraph (c)(1)(i) of this section shall be
provided on behalf of both the organization and the individual.

    Dated: December 3, 1999.
Margaret M. Dotzel,
Acting Associate Commissioner for Policy.
[FR Doc. 00-5417 Filed 3-6-00; 8:45 am]
BILLING CODE 4160-01-F