[Federal Register Volume 64, Number 127 (Friday, July 2, 1999)]
[Proposed Rules]
[Pages 35966-35972]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16857]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 510, 514, and 558

[Docket No. 99N-1591]


Animal Drug Availability Act; Veterinary Feed Directive

AGENCY: Food and Drug Administration, HHS.
ACTION: Proposed rule.

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SUMMARY: The Food and Drug Administration (FDA) is proposing to amend 
the animal drug regulations to implement the Veterinary Feed Directive 
(VFD) drugs section of the Animal Drug Availability Act (ADAA). A VFD 
drug is intended for use in animal feeds, and such use of the VFD drug 
is permitted only under the professional supervision of a licensed 
veterinarian. The proposed regulation would establish the requirements 
relating to the distribution and use of VFD drugs and animal feeds 
containing VFD drugs.

DATES: Written comments on this proposed rule must be submitted by 
September 30, 1999. Comments on the information collection provisions 
must be submitted by August 2, 1999.

ADDRESSES: Submit written comments on this proposed rule to the Dockets 
Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers 
Lane, rm. 1061, Rockville, MD 20852. Submit written comments regarding 
the information collection to the Office of Information and Regulatory 
Affairs, Office of Management and Budget (OMB), New Executive Bldg., 
725 17th St. NW., rm. 10235, Washington, DC 20503, Attn: Wendy Taylor, 
Desk Officer for FDA. All comments must be identified with the docket 
number found in brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT: George Graber, Center for Veterinary 
Medicine (HFV-220), Food and Drug Administration, 7500 Standish Pl., 
Rockville, MD 20855, 301-827-6651, e-mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    FDA has determined that certain new animal drugs, vital to animal 
health, should be approved for use in animal feed, but only if such 
medicated feeds are administered under a veterinarian's order and 
supervision. This limitation is important for a number of reasons. For 
example, control of the usage of certain antimicrobials is critical to 
reducing unnecessary use of such drugs in animals and to slowing or 
preventing the development of bacterial resistance to antimicrobial 
drugs. In addition, safety concerns relating to, among other things, 
difficulty in diagnosing disease conditions and high toxicity may also 
require that the use of a drug in animal feed be limited to use by 
order and under the supervision of a licensed veterinarian.
     Before the passage of the ADAA, the Federal Food, Drug, and 
Cosmetic Act (the act) provided FDA only two options for regulating the 
distribution of animal drugs: Over-the-counter (OTC) and prescription. 
Although prescription status affords certain controls, the regulation 
of animal drugs for use in medicated feeds under traditional 
prescription systems has proven unworkable. The prescription legend 
invokes the application of State pharmacy laws, and FDA usually defers 
to State law concerning dispensing of prescription drugs. Pharmacy laws 
in a significant number of States prohibit feed manufacturers from 
possessing and dispensing prescription animal drugs and medicated feed 
containing those drugs. Pharmacy laws in other States require the 
presence of a pharmacist at the feed manufacturing facility that uses 
prescription drugs in the manufacture of medicated feeds. As a 
practical matter, the application of State pharmacy laws to medicated 
feeds would burden State pharmacy boards and impose costs on animal 
feed manufacturers to such an extent that it would be impractical to 
make these critically needed new animal drugs available for animal 
therapy. After considerable deliberation with, and support from, the 
Coalition for Animal Health, and with support from State regulatory 
agencies, Congress enacted legislation in 1996 establishing a new class 
of restricted feed use drugs that may be distributed without invoking 
State pharmacy laws. The ADAA (Pub. L. 104-250) amended the act to 
create section 504 (21 U.S.C. 354), VFD drugs.
    Although statutory controls on the distribution and use of VFD 
drugs are similar to those for prescription animal drugs regulated 
under section 503(f) of the act (21 U.S.C. 353(f)), the proposed 
implementing VFD regulations are tailored to the unique circumstances 
relating to the distribution of animal feeds containing a VFD drug. 
This proposal would ensure the protection of public health while 
enabling animal producers to obtain and use needed drugs as efficiently 
and cost-effectively as possible. Unlike prescription drugs, VFD drugs 
would not be regulated by State pharmacy bodies. Historically, FDA has 
cooperated with State feed control offices in regulating the 
manufacture and use of medicated feeds. Investigations and inspections 
to measure compliance at FDA licensed feed manufacturing establishments 
are carried out by FDA or by State feed regulatory personnel 
commissioned by FDA. Most States maintain active inspection programs 
for medicated feed establishments that are not required to be licensed 
by FDA. We anticipate that State feed offices will continue assisting 
FDA by enforcing VFD regulations.
    To date, one VFD drug has been approved; tilmicosin, an 
antimicrobial approved for administration via animal feed for control 
of swine respiratory diseases (Sec. 558.618 (21 CFR 558.618)). The 
regulation for tilmicosin, in addition to specifying the approved 
conditions of use, describes the information that the attending 
veterinarian must provide as part of the VFD form. At the time of 
publication of the final rule for VFD's, the regulation at Sec. 558.618 
will be amended, if needed, to be consistent with the final rule.

II. Discussion of the Proposed Rule

    By amending part 558 (21 CFR part 558), the proposed rule would 
implement section 504 of the act, which created VFD drugs. 
Specifically, the proposed rule would amend Sec. 558.3(b) by adding 
necessary definitions at Sec. 558.3(b)(6) through (b)(11). The proposed 
rule would also redefine Category II drugs at Sec. 558.3(b)(1)(ii) to 
include all VFD drugs, a reflection of

[[Page 35967]]

our safety concerns for all medicated feeds containing VFD drugs. A 
proposed new Sec. 558.6 would be added to list the requirements for the 
distribution and use of VFD drugs and feeds that contain VFD drugs.
    A VFD drug is limited to use under a valid veterinary-client-
patient relationship where the veterinarian assumes the responsibility 
for safe and effective use of the VFD and the client has agreed to 
follow the instructions of the veterinarian. Proposed Sec. 558.6(a)(1) 
through (a)(4) lists the responsibilities of the veterinarian issuing a 
VFD.
    The information required to be included in the VFD will vary from 
drug to drug. Proposed Sec. 558.6(a)(5) describes information that may 
be required in a VFD. The specific VFD approval regulation will 
identify the information required in a VFD for a particular animal 
drug. FDA is particularly concerned that VFD drugs be used only in 
accordance with the approved uses.
    The length of time a VFD may be valid (expiration date) and the 
number of refills or reorders, if any, that will be permitted will be 
specific to the VFD drug. As part of the VFD drug approval process, FDA 
will determine whether refills or reorders are allowed, and if so, the 
number of refills or reorders. We request your comment on this proposed 
approach and on how much latitude should be given the veterinarian in 
ordering use of VFD drugs consistent with the control over drug use as 
envisioned by the ADAA; i.e., should reorders be permitted and for what 
length of time should the order be valid? The American Association of 
Swine Practitioners (AASP) addressed this issue in a response dated 
January 20, 1997, to the ADAA advanced notice of proposed rulemaking in 
the Federal Register of November 21, 1996 (61 FR 59209) (Docket No. 
96N-0411). The AASP stated that it is imperative that the rule allow 
flexibility in issuance and content of the VFD in order to be practical 
in its application to various types of production systems. For example, 
the AASP inquired whether a single VFD can be applicable to multiple 
groups of pigs when a farm's history predicts recurring disease 
outbreaks in the transition between production stages, such as 
postweaning.
    As a practical matter, FDA anticipates that practicing 
veterinarians would not want to attempt to create their own practice-
specific VFD's because of the time involved and the amount of specific 
information required. We expect VFD drug manufacturers to provide 
veterinarians with preprinted VFD's in triplicate. We are thus 
proposing to amend Sec. 514.1(b)(9) (21 CFR 514.1(b)(9)) to require 
submission of a VFD format as a part of the new animal drug application 
(NADA) for each VFD drug.
    Proposed Sec. 558.6(b)(1), (b)(2), and (b)(3) describe the proper 
distribution and recordkeeping requirements for each of the three 
copies of the VFD. The client and the veterinarian each keep a copy, 
and the original is given to the distributor supplying the VFD feed to 
the client. Under proposed Sec. 558.6(b)(4), to expedite delivery, a 
veterinarian may fax a VFD to the distributor provided the veterinarian 
immediately forwards the original to the distributor and a copy to the 
client. Proposed Sec. 558.6(c) would require that the involved parties 
(veterinarian, distributor, and client) keep the VFD for 2 years after 
the date of issuance and make it available for inspection and copying 
by FDA.
    In addition to facsimile transmission of VFD's, we are considering 
permitting the veterinarian to telephone or e-mail VFD orders to the 
distributor. This would facilitate rapid movement of VFD feeds when 
immediate personal contact among the veterinarian, client, and 
distributor is not practical, and the situation demands the VFD feed be 
fed immediately to the animals. This approach would require that the 
veterinarian provide complete VFD information to the feed distributor 
by telephone or electronic means. In the case of telephone orders, the 
distributor would be responsible for reducing the telephone order to 
writing and keeping this order in its files. The veterinarian would 
follow the telephone call with prompt issuance of a signed, written VFD 
to the distributor and a copy to the client. Even though use of either 
electronic transmission or telephone will require that the veterinarian 
followup with signed written copies to both distributor and client, 
there is still concern about telephone orders. A concern is that there 
will be less control over the distribution process when the required 
information is not initially in writing, and reliance is placed on the 
client or distributor for proper interpretation of oral instructions. 
We are seeking comments on the policy reflected in the proposed rule 
allowing only fascimile transmission of VFD's, and whether that policy 
should be changed to allow use of the telephone and e-mail for 
transmitting VFD orders. Specifically, we invite comments on how to 
ensure transmission of clear, complete, and secure information via 
telephone or electronic means, and on the mechanics of promptly 
providing a signed copy of the VFD to all involved parties while 
avoiding undue duplication of effort and paperwork.
    Proposed Sec. 558.6(d)(1) discusses the statutory requirement of 
ADAA that all distributors of medicated feed containing VFD drugs, 
whether feed manufacturers or other suppliers in the feed distribution 
chain, notify us of their intent to distribute such feed upon first 
engaging in distribution. A ``distributor'' is defined in proposed 
Sec. 558.3(b)(9) as any person who distributes a medicated animal feed 
containing a VFD drug to a client who presents a VFD or to another 
distributor. The term ``distributor'' includes all entities marketing 
VFD feeds, from the manufacturer of such feed to all suppliers in the 
distribution chain. To assist us in maintaining an accurate data base 
of distributors, proposed Sec. 558.6(d)(1)(iv) would require that 
distributors notify us within 30 days if they change business name or 
address. We regard this as an extension of Sec. 558.6(d)(1) 
notification requirement, necessary to keep original notification 
information current.
    To accommodate the many levels of distribution, proposed 
Sec. 558.6(d)(2) would allow a distributor to ship medicated feeds 
containing a VFD drug to a consignee in the absence of a VFD. The 
regulations would only allow this if the consignee furnishes an 
``acknowledgment letter'' affirming that it will only distribute 
medicated feed bearing or containing a VFD drug to a VFD holder or 
another distributor who furnishes a similar acknowledgment letter. 
Proposed Sec. 558.6(d)(2) also is intended to ensure that all parties 
involved in distribution of VFD drugs understand the requirement of 
shipping medicated animal feeds containing VFD drugs only to consignees 
who have notified FDA. Proposed Sec. 558.6(e)(ii) would require that 
distributors keep records of receipt and distribution of all medicated 
animal feeds containing VFD drugs. We believe that the usual and 
customary records of purchase and sales kept by distributors will 
satisfy this requirement. FDA would examine receipt and distribution 
records to verify compliance with these proposed regulations.
    Proposed Sec. 558.6(f) would specify the wording of a cautionary 
statement that is required by statute to be included in all labeling 
and advertising for VFD drugs and medicated feeds containing VFD drugs. 
This ``cautionary'' labeling requirement is exempt from the scope of 
the Paperwork Reduction Act (the PRA) because it is a ``public 
disclosure of information originally supplied by the Federal Government 
for the purpose of disclosure to the public'' (5 CFR 1320.3(c)(2)).

[[Page 35968]]

    Under section 512(a)(1) of the act (21 U.S.C. 360b(a)(1)), an 
animal drug is unsafe unless it is approved and its labeling and use 
comply with the approval. In addition, section 512(a)(4) of the act, 
which allows for some extra-label use of animal drugs, specifically 
prohibits extra-label use in animal feed. This prohibits the extra-
label use of VFD drugs in animal feed. Therefore, a VFD drug not used 
in accord with its approval would be an unapproved new animal drug and 
would be considered to be unsafe under section 512 of the act. 
Consequently, the VFD drug would be adulterated under section 501(a)(5) 
of the act (21 U.S.C. 351(a)(5)), and an animal feed bearing or 
containing such VFD drug would be adulterated under section 501(a)(6) 
of the act. A VFD drug and any feed bearing or containing a VFD drug 
would be considered to be misbranded under section 504(b) of the act if 
the labeling or advertising fails to contain the cautionary statements 
prescribed in these regulations or fails to conform to the approved 
conditions and indications for use.
    In order to implement those provisions of the act prohibiting 
extra-label use and promotion of VFD drugs, and to clarify that 
reporting and recordkeeping requirements for labeling and promotional 
material under Sec. 510.300 (21 CFR 510.300) are also applicable to VFD 
drugs, the proposed rule would revise Sec. 510.300(a)(4) to add ``or a 
veterinary feed directive drug'' after ``if it is a prescription new 
animal drug.'' This would require that promotional material for VFD 
drugs be submitted at the time of initial dissemination and publication 
in accord with Sec. 510.300(a)(4) and (b)(3), respectively.

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. Analysis of Impacts

    FDA has examined the impact of the proposed rule under Executive 
Order 12866, under the Regulatory Flexibility Act (5 U.S.C. 601-612), 
and under the Unfunded Mandates Reform Act (Pub. L. 104-4). Executive 
Order 12866 directs agencies to assess all costs and benefits of 
available regulatory alternatives and, when regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity). The Regulatory 
Flexibility Act requires agencies to examine regulatory alternatives 
for small entities if the rule may have a significant impact on a 
substantial number of small entities. The Unfunded Mandates Reform Act 
requires agencies to prepare an assessment of anticipated costs and 
benefits before enacting any rule that may result in an expenditure 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).
    FDA concludes that this proposed rule is consistent with the 
principles set forth in the Executive Order and in these two statutes. 
We estimate that the present value of the proposed rule's annual 
compliance costs on industry in the first year would range from about 
$315,000 to $571,000. These costs will increase yearly as more VFD 
drugs are approved and should total about $2.8 million in year 10 
(after amortization at a 7-percent discount rate). It is important to 
note that these costs will be incurred each year only if those using 
this new class of drugs believe that the accompanying health benefits 
outweigh these costs. As a result, the proposed rule is not a 
significant regulatory action as defined by the Executive Order and so 
is not subject to review under the Executive Order. We have further 
determined that the proposed rule will not have a significant economic 
impact on a substantial number of small entities. Further, because this 
proposed rule makes no mandates on other government entities and will 
result in expenditures of less than $100 million by the private sector 
in any one year, we need not prepare additional analyses under the 
Unfunded Mandates Reform Act.
    FDA is proposing to amend the animal drug regulations to reflect 
the creation of a new category of drugs for use in animal feeds, 
referred to as VFD drugs. A VFD drug is a drug intended for use in or 
on animal feed that is limited to use under the professional 
supervision of a licensed veterinarian. Certain drugs can be approved 
for feed use only if used under a veterinarian's supervision. Statutory 
creation of VFD drugs provides the agency with a means for controlling 
the distribution and use of certain animal drugs that is more practical 
and less burdensome to industry than the existing prescription system. 
The proposed new system would be as effective as the prescription drug 
system in controlling the distribution and use of VFD drugs, but with 
requirements tailored to the unique circumstances that exist for the 
distribution of medicated feeds. The most critical aspect of this 
system is the direct involvement of a veterinarian in the selection and 
use of the VFD drug. Thus, the proposal would maintain public health 
protection while enabling livestock producers to obtain needed drugs as 
efficiently and cost-effectively as possible.

A. Benefits

    Quantifying the benefits of the new system for VFD drugs is 
difficult because it requires that the treatment benefits of each VFD 
drug be compared to the drug that it replaces in the treatment regimen. 
Because almost all of the VFD drugs are as yet unidentified, it is not 
possible to make these determinations. It is reasonable, however, to 
assume that because each VFD drug would be assigned the VFD 
classification during the drug approval process, each drug would have 
some safety or toxicity concerns that would prevent its approval as an 
OTC drug for use in feed. Because these drugs would otherwise have to 
be approved in a prescription drug form, the proposed VFD drug rules 
provide for greater availability and use. Moreover, because the rule 
does not require that a VFD drug be used in place of either OTC 
medicated feeds or prescription drugs in a nonfeed form, consumers 
(veterinarians and animal producers) are expected to use VFD drugs only 
where they believe that the VFD drug's benefits outweigh their costs.

B. Costs

    Complying with the VFD drug provisions would impose some costs on 
industry and government. A percentage of these costs, however, or even 
an amount greater than the costs shown here, would be incurred 
independently of the VFD rules if the same animal drug and its approved 
indication for treatment were approved under the current animal drug 
approval system as a prescription drug intended for use other than in 
or on an animal feed. From a broader perspective, therefore, the rule 
may result in a decrease in net costs, or a net benefit to the 
industry, as the VFD drug rule requirements may be less costly than the 
prescription drug requirements.
    The costs imposed by the VFD drug proposal are dependent on the 
number of drugs that would be approved each year as VFD drugs. Although 
it is difficult to predict this number, because the VFD drugs are a new 
creation, the agency estimates that the average number of animal drugs 
that would be approved as VFD drugs is about one per

[[Page 35969]]

year. Likewise, the number of VFD's that will be issued annually is 
dependent on many factors, some of which are difficult to predict. For 
purposes of this analysis, however, the agency assumes that each VFD 
drug will be issued from 250,000 to 500,000 times each year. Due to the 
uncertainty surrounding this initial estimate, the agency invites 
comment on the appropriate number of times an average VFD drug will be 
issued annually.
    The VFD system is intended to retain the existing distribution 
mechanisms for drugs intended for use in feeds and for medicated feeds 
while maintaining more control over the availability of certain animal 
drugs that are intended for use in animal feed and that raise safety 
issues. The major cost of compliance would result from the paperwork 
that would be necessary to track the VFD drugs and feeds. One of the 
cost components would be the cost of filing the VFD's by the 
veterinarian, distributor, and animal producer. The agency estimates 
that filing each VFD by the veterinarian, distributor, and animal 
producer or their records clerks will take only about 1 minute. The 
first year cost of this task is estimated to total $218,000 to $437,000 
based on the hourly wages for records clerks and animal producers 
calculated from data in Employment and Earning, pp. 206 and 209, 
January 1996; and Monthly Labor Review, p. 76, September 1997. After 
the VFD drug system becomes more routine and the total number of VFD's 
issued increases with the years, it is likely that the compliance time 
per VFD will decrease.
    Another first year cost is the requirement that VFD drug 
distributors notify FDA of their intent to distribute the drugs. The 
agency estimates that there will be up to 20,000 distributors over 
time, but that only about 25 percent of them will notify the agency in 
the first year. Based on agency estimates of 15 minutes to write the 
notification at a middle manager's wage of about $19 per hour, and 10 
minutes for a GS-7 Government employee to process the notification, 
total notification costs in the first year are estimated at about 
$35,000. We cannot estimate the cost of the requirement that 
distributors notify us when they change their business name or address, 
but believe it to be negligible. The compliance cost of the VFD, 
whether by the VFD drug manufacturer or the veterinarian, is estimated 
at about $1,000 for the initial one page layout and $0.05 for each 
triplicate form. This amounts to $14,000 to $26,000 per year per VFD 
drug. The $1,000 cost for the layout (format) would be incurred by the 
VFD drug sponsor under the proposal in Sec. 514.1(b)(9) to require 
submission of the format with the NADA. Storage costs for the normal 
three copies of the VFD previously mentioned, and fax copies if that 
form of transmission is used, amount to $25,000 to $50,000 in the first 
year, assuming that about 15,000 copies fit into a large file cabinet 
at about $500 per cabinet.
    The final compliance cost concerns the acknowledgment letters 
written by the distributors of the VFD drugs. We estimate that about 
5,000 letters will be written annually for the first 3 years and that 
each letter will take 15 minutes to prepare. At the middle manager's 
wage rate mentioned previously, we estimate this provision to cost only 
about $24,000 annually for the first 3 years.
    In sum, FDA estimates the total first year compliance costs to be 
from about $315,000 to $571,000, including costs to both industry and 
government, or about $1.25 per VFD issued. FDA has not included the 
cost of the veterinarian's time to write and explain the VFD to the 
animal producer because it is very likely that a comparable amount of 
time would be spent by veterinarians counseling animal producers in 
other animal treatments in the absence of the VFD drug system. 
Regardless, the net effect of the entire VFD drug system is expected to 
be a net benefit, or decrease in net costs, as the consumers of these 
drugs will only use them if they expect a greater net benefit over 
currently available treatment alternatives.
    In future years, compliance costs would increase for several 
reasons. First, distributor notifications would increase in the second 
year as an estimated 75 percent of those that do not notify us in the 
first year perform this obligation (this rate may be overestimated to 
the extent that it takes more years before all distributors begin to 
handle medicated feeds containing VFD drugs). Second, and more 
importantly, there may be, on average, about one more VFD drug approved 
in each succeeding year that would steadily increase the total issuance 
and filing costs. Compliance costs per VFD issued, however, would 
decrease slightly in the future because the one-time-only costs already 
would have been incurred.
    The estimated total nondiscounted compliance costs in year 2 range 
from about $640,000 to $1,151,000. Discounting these costs at 7 percent 
per year results in a final second year cost estimate of about $598,000 
to $1,076,000. At some year in the future, the increasing number of 
VFD's issued will reach a point at which issuances of the newly 
approved VFD's will be offset by the decreasing issuances of older 
VFD's as their sales volume decreases. Although the agency does not 
know in which year this will occur, it can be determined that the 
present value of the annual compliance costs will not continue to 
increase. The agency invites comment on all compliance cost estimates 
included in this analysis.

C. Regulatory Flexibility Analysis

    The Small Business Administration (SBA) defines all manufacturers 
of drugs and prepared feeds for animals having 500 employees or fewer 
to be a small business. We have included feed distributors in this 
category also. FDA estimates that only about 2 percent of the affected 
facilities belong to large conglomerates with an overall employee count 
of higher than 500. Therefore, the remaining 98 percent of the affected 
facilities would be considered small businesses according to SBA's 
standards. SBA defines veterinary services for livestock as small 
businesses if annual revenues are less than $5 million. Because, 
according to the American Veterinary Medical Association, ``Veterinary 
Market Statistics, 1997,'' large animal veterinarians earn about 
$60,000 per year on average, the agency assumes that virtually all 
large animal veterinary practices are small businesses. Likewise, most 
livestock production facilities would be considered small businesses by 
SBA, because SBA defines small business as those businesses with 
revenues under $500,000, except for beef cattle feedlots, for which the 
limit is $1.5 million. Consequently, the proposed rule would ultimately 
affect a substantial number of small businesses. The rule will not, 
however, have a significant effect on these small business, as the cost 
of the additional veterinary service and paperwork burdens are 
estimated at about $1.25 per VFD issued. Such costs would constitute an 
insignificant percentage of the revenue of the affected firms even if 
several VFD drugs are issued to a producer each year. Thus, in 
accordance with the Regulatory Flexibility Act, FDA certifies that this 
proposed rule would not have a significant economic impact on a 
substantial number of small entities.

D. Unfunded Mandate Reform Act

    The Unfunded Mandates Reform Act requires (section 202) that 
agencies prepare an assessment of anticipated costs and benefits before 
proposing any expenditure by State, local, and tribal governments, in 
the aggregate, or by the private sector of $100 million (adjusted

[[Page 35970]]

annually for inflation) in any one year. The publication of the 
proposal creating the VFD drug system is not expected to result in 
expenditures of funds by State, local, and tribal governments or the 
private sector in excess of $100 million annually. Therefore, FDA is 
not required to perform a cost/benefit analysis according to the 
Unfunded Mandates Reform Act.

V. Paperwork Reduction Act of 1995

    This proposed rule contains information collection provisions that 
are subject to review by OMB under the PRA (44 U.S.C. 3501-3520). The 
title, description, and respondent description of the information 
collection provisions are shown in this section V with an estimate of 
the annual reporting and recordkeeping burden (Tables 1 and 2 of this 
document). Included in the estimate is the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing each 
collection of information.
    FDA invites comments on: (1) Whether the proposed collection of 
information is necessary for the proper performance of our functions, 
including whether the information will have practical utility; (2) the 
accuracy of our estimate of the burden of the proposed collection of 
information, including the validity of the methodology and assumptions 
used; (3) ways to enhance the quality, utility, and clarity of the 
information to be collected; and (4) ways to minimize the burden of the 
collection of information on respondents, including through the use of 
automated collection techniques, when appropriate, and other forms of 
information technology.
    Title: Veterinary Feed Directives.
    Description: The proposed rule implements provisions of the ADAA of 
1996 (Pub. L. 104-250), which, by adding section 504 to the act, 
created a new class of animal drugs called VFD drugs. The proposed rule 
establishes regulatory requirements for the distribution and use of VFD 
drugs. VFD drugs are new animal drugs intended for use in or on animal 
feed whereby such use is permitted only under the professional 
supervision of a licensed veterinarian operating within the confines of 
a valid veterinarian-client-patient relationship.
    The VFD ordered by the veterinarian must be issued in accordance 
with the format described under proposed Sec. 558.6(a). We are 
proposing to amend the new animal drug regulations in Sec. 514.1(b)(9) 
to require the VFD drug sponsor to submit such format as part of the 
NADA. The format may be used by the sponsor to produce forms in 
triplicate for use by the veterinarian or it may be supplied to the 
veterinarian for use in preparing a practice-specific form. 
Veterinarians are required to complete the VFD in triplicate, 
authorizing a client-recipient to obtain and use a medicated feed 
containing a VFD drug. The original copy of the VFD must be forwarded 
either by the veterinarian or the client-recipient to the distributor 
providing the VFD. In addition, the veterinarian issuing the VFD and 
the client-recipient of the VFD must retain a copy of each VFD for 2 
years from date of issuance. Any person who distributes medicated feed 
containing VFD drugs must file with us a one time notification letter 
of intent to distribute, and retain a copy of each VFD serviced or each 
consignee`s acknowledgment letter for 2 years. Distributors are also 
required to keep records of receipt and distribution of medicated 
animal feeds containing VFD drugs for 2 years. An acknowledgment letter 
must be provided to a distributor by a consignee who is not the 
ultimate user of the medicated feed containing a VFD drug. The 
acknowledgment letter affirms that the consignee will not ship such 
medicated animal feed to an animal production facility that does not 
have a VFD, and will not ship such feed to another distributor without 
receiving a similar acknowledgment letter. To maintain an accurate data 
base for distributors of VFD drugs, a distributor is required to notify 
us of any change in name or business address.
    Certain capital costs are involved with respect to the reporting 
and recordkeeping requirements for VFD drugs. Specific details of cost 
estimates are found in section IV.B of this document. We estimate that 
approximately 375,000 VFD's will issue annually. The estimated cost for 
producing 375,000 VFD's in triplicate annually is $19,750 ($1,000 for 
the initial one-page layout and $0.05 for each triplicate form). For 
maintaining records of VFD's, the estimated cost is $37,500. This cost 
estimate is based on the fact that the veterinarian, client-recipient 
and distributor must each keep a copy of the VFD. Thus, a total of 
1,125,000 copies of VFD's will be filed (375,000 VFD's x 3). We 
estimate that it will take 75 large file cabinets to store all copies 
of VFD's, assuming 15,000 copies can be stored in a large file cabinet. 
The estimated cost per file cabinet is $500, resulting in a total cost 
of $37,500 (75 cabinets x $500).
    Description of Respondents: Veterinarians, distributors of animal 
feeds containing VFD drugs, and clients utilizing medicated feeds 
containing VFD drugs.

                                                     Table 1.--Estimated Annual Reporting Burden\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Annual
               21 CFR Sections                     No. of       Frequency per    Total Annual Responses      Hours per      Total Hours    Capital Costs
                                                 Respondents      Response                                   Response
--------------------------------------------------------------------------------------------------------------------------------------------------------
558.6(a)(3) through (a)(5)                      15,000              25                375,000                   0.25       93,750         $12,250
558.6(d)(1)(i) through (d)(1)(iii)               5,000               1                  5,000                   0.25        1,250
558.6(d)(1)(iv)                                    100               1                    100                   0.25           25
558.6(d)(2)                                      5,000               1                  5,000                   0.25        1,250
514.1(b)(9)                                          1               1                      1                   3.0             3
Total hours/cost                                                                                                           96,278          12,250
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\There are no operating or maintenance costs associated with this collection of information.


[[Page 35971]]


                                                   Table 2.--Estimated Annual Recordkeeping Burden\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Annual
               21 CFR Sections                     No. of       Frequency per     Total Annual Records       Hours per      Total Hours    Capital Costs
                                                Recordkeepers   Recordkeeping                              Recordkeeper
--------------------------------------------------------------------------------------------------------------------------------------------------------
558.6(c)(1) and (d)(2)(i)                      112,500              10              1,125,000                    .0167     18,788         $37,500
558.6(e)(ii)                                     5,000              75                375,000                    .0167      6,263
Total hours/cost                                                                                                           25,051          37,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\There are no operating or maintenance costs associated with this collection of information.

    To permit FDA to implement certain provisions of the VFD procedure, 
the OMB approved a portion of this collection of information under the 
emergency processing provisions of the PRA (5 CFR 1320.13), on a 
temporary basis, OMB control number 0910-0363. Estimates in the 
preceding burden chart have been changed from those in the emergency 
approval (62 FR 64847, December 9, 1997) based upon FDA's experience in 
implementing certain elements of the VFD procedure.
    In compliance with section 3507(d) of the PRA (44 U.S.C. 3507(d)), 
FDA submitted to OMB the information collection provisions of this 
proposed rule for review. Interested persons are requested to send 
comments regarding this burden estimate or any other aspect of this 
information collection, including suggestions for reducing the burden, 
by August 2, 1999, to the Office of Information and Regulatory Affairs, 
(address above).

VI. Public Comments Procedures

     On June 1, 1998, the President instructed all Federal agencies to 
ensure the use of ``plain language'' in all new documents. As part of 
this initiative, FDA has drafted the codified portion of this document 
using the principles of ``plain language'' set forth by the President. 
The agency seeks public comment on the clarity of this proposed rule.
     FDA invites interested persons to submit comments regarding these 
proposed regulations to the Dockets Management Branch (address above). 
To ensure that public comments have maximum effect in developing the 
final regulations, FDA urges you to identify clearly the specific 
section or sections of the proposed regulation that each comment 
addresses. Comments should be confined to issues pertinent to the 
proposed rule and explain the reason for any recommended change. 
Comments are to be identified with the docket number found in brackets 
in the heading of this document. FDA will accept comments after the 
deadline September 30, 1999, but are not obligated to consider or 
include in the administrative record for the final rule those comments 
received after the close of the comment period. Received comments may 
be seen in the office above between 9 a.m. and 4:30 p.m., Monday 
through Friday.

List of Subjects

21 CFR part 510

    Administrative practice and procedure, Animal drugs, Labeling, 
Reporting and recordkeeping requirements.

21 CFR part 514

    Administrative practice and procedure, Animal drugs, Confidential 
business information, Reporting and recordkeeping requirements.

21 CFR part 558

    Animal drugs, Animal feeds.
    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 parts 510, 514, and 558 be amended as follows:

PART 510--NEW ANIMAL DRUGS

    1. The authority citation for 21 CFR part 510 continues to read as 
follows:

    Authority: 21 U.S.C. 321, 331, 351, 352, 353, 360b, 371, 379e.

Sec. 510.300  [Amended]

    2. Section 510.300 Records and reports concerning experience with 
new animal drugs for which an approved application is in effect is 
amended in paragraph (a)(4) by adding the phrase ``or a veterinary feed 
directive drug,'' after the phrase ``if it is a prescription new animal 
drug''.

PART 514--NEW ANIMAL DRUG APPLICATIONS

    3. The authority citation for 21 CFR part 514 continues to read as 
follows:

    Authority: 21 U.S.C. 351, 352, 360b, 371, 379e, 381.

    4. Section 514.1 is amended by adding paragraph (b)(9) to read as 
follows:


Sec. 514.1  Applications.

* * * * *
    (b) * * *
    (9) Veterinary feed directive (VFD). Three copies must be submitted 
in the format described under Sec. 558.6(a)(3), (a)(4), and (a)(5) of 
this chapter.
* * * * *

PART 558--NEW ANIMAL DRUGS FOR USE IN ANIMAL FEEDS

    5. The authority citation for 21 CFR part 558 continues to read as 
follows:

    Authority: 21 U.S.C. 360b, 371.

    6. Section 558.3 is amended by revising paragraph (b)(1)(ii) and by 
adding paragraphs (b)(6) through (b)(11) to read as follows:


Sec. 558.3  Definitions and general considerations applicable to this 
part.

* * * * *
    (b) * * *
    (1) * * *
    (ii) Category II--These drugs require a withdrawal period at the 
lowest use level for at least one species for which they are approved, 
or are regulated on a ``no-residue'' basis or with a zero tolerance 
because of a carcinogenic concern regardless of whether a withdrawal 
period is required, or are a veterinary feed directive drug.
* * * * *
    (6) A ``veterinary feed directive (VFD) drug'' is a drug intended 
for use in or on animal feed and which is limited by an approved 
application filed under section 512(b) of the Federal Food, Drug, and 
Cosmetic Act to use by the order and under the professional supervision 
of a licensed veterinarian.
    (7) A ``veterinary feed directive'' is a written statement issued 
by a licensed veterinarian in the course of the veterinarian's 
professional practice that orders the use of a veterinary feed 
directive drug in or on an animal feed. This written statement 
authorizes the client (the owner of the animal or animals or other 
caretaker) to obtain and use the veterinary feed directive drug in or 
on an animal feed to treat the client's animals only in accordance with 
the Food and Drug Administration

[[Page 35972]]

approved directions for use. A veterinarian may issue a VFD only if a 
valid veterinarian-client-patient relationship exists, as defined in 
Sec. 530.3(i) of this chapter.
    (8) A ``medicated feed'' means a Type B medicated feed as defined 
in paragraph (b)(3) of this section or a Type C medicated feed as 
defined in paragraph (b)(4) of this section.
    (9) For the purposes of this part, a ``distributor' means any 
person who distributes a medicated feed containing a VFD drug to 
another distributor or to the client-recipient of the VFD.
    (10) An ``animal production facility'' is a location where animals 
are raised for any purpose, but does not include the specific location 
where medicated feed is made.
    (11) An ``acknowledgment letter'' is a written communication 
provided to a distributor by a consignee who is not the ultimate user 
of medicated feed containing a VFD drug. An acknowledgment letter 
affirms that the consignee will not ship such medicated animal feed to 
an animal production facility that does not have a VFD, and the 
consignee will not ship such feed to another distributor without 
receiving a similar written acknowledgment letter.
     7. Section 558.6 is added to subpart A to read as follows:


Sec. 558.6  Veterinary feed directive drugs.

    (a) What conditions must be met if I am a veterinarian issuing a 
veterinary feed directive?
    (1) You must be appropriately licensed;
    (2) You must issue a VFD only within the confines of a valid 
veterinarian-client-patient relationship (as defined in Sec. 530.3(i) 
of this chapter) in accordance with the format described in paragraphs 
(a)(3), (a)(4), and (a)(5) of this section;
    (3) You must complete the VFD in writing and sign it;
    (4) You must produce the VFD in triplicate;
    (5) You must include the following information in the VFD:
    (i) Your name, address, and phone number and that of the client;
    (ii) Identification and number of animals to be treated/fed the 
medicated feed, including identification of the species of animals, and 
the location of the animals;
    (iii) Date of treatment and, if different, date of prescribing the 
VFD drug;
    (iv) Approved indications for use;
    (v) Name of the animal drug;
    (vi) Level of animal drug in the feed, and the amount of feed 
required to treat the animals in paragraph (a)(5)(ii) of this section;
    (vii) Feeding instructions with the withdrawal time;
    (viii) Any special instructions and cautionary statements necessary 
for use of the drug in conformance with the approval;
    (ix) Expiration date of the VFD;
    (x) Number of refills (reorders) if necessary and permitted by the 
approval;
    (xi) Your license number and the name of the State issuing the 
license; and,
    (xii) The statement: ``Extra-label use, (i.e., Use of this VFD feed 
in a manner other than as provided for in the VFD drug approval) is 
strictly prohibited.''
    (xiii) Any other information required by the VFD drug approval 
regulation.
    (6) You must issue a VFD only for the approved conditions and 
indications for use of the VFD drug.
    (b) What must I do with the VFD if I am a veterinarian?
    (1) You must give the original VFD to the feed distributor 
(directly or through client);
    (2) You must keep one copy of the VFD;
    (3) You must give the client the second copy of the VFD;
    (4) You may fax a VFD to the client or distributor, if you wish, 
provided you immediately forward the signed written original to the 
distributor and a copy to the client.
    (c) What are the VFD recordkeeping requirements?
    (1) The VFD must be kept by all involved parties (i.e., 
veterinarian, client, and VFD feed distributor) for a period of 2 years 
from date of issuance.
    (2) The VFD must be made available by all involved parties for 
inspection and copying by FDA.
     (3) VFD's transmitted by facsimile must be kept by all involved 
parties along with copies distributed by the veterinarian.
    (d) What are the notification requirements if I am a distributor of 
animal feed containing a VFD drug?
     (1) You must notify FDA only once, by letter, that you intend to 
distribute animal feed containing a VFD drug.
     (i) The notification letter must include the complete name and 
address of each business site from which distribution will occur.
     (ii) A responsible person from your firm must sign and date the 
notification letter.
     (iii) You must submit the notification letter, prior to beginning 
your first distribution, to the Center for Veterinary Medicine, 
Division of Animal Feeds (HFV-220), 7500 Standish Pl., Rockville, MD 
20855; and
     (iv) You must notify the Center for Veterinary Medicine at the 
address provided in paragraph (d)(1)(iii) of this section within 30 
days of any change in name or business address.
     (2) If you are a distributor who ships an animal feed containing a 
VFD drug to another consignee-distributor in the absence of a valid 
VFD, you must obtain:
     (i) An ``acknowledgment letter,'' as defined in Sec. 558.3(b)(11) 
of this chapter, from the consignee-distributor; and
     (ii) A statement affirming that the consignee-distributor has 
complied with ``Distributor Notification'' requirements of paragraph 
(d)(1) of this section.
     (e) What are the recordkeeping requirements if I am a distributor?
     (1) You must keep information specified in paragraph (c)(1) or 
paragraph (d)(2)(i) of this section;
     (2) You must keep records of receipt and distribution of all 
medicated animal feed containing a VFD drug;
     (3) You must keep these records for 2 years from date of receipt 
and distribution; and
     (4) You must make records available for inspection and copying by 
FDA.
     (f) What cautionary statements are required for VFD drugs and 
animal feeds containing VFD drugs? All labeling and advertising must 
prominently and conspicuously display the following cautionary 
statement: ``Caution: Federal law limits this VFD drug product to use 
under the professional supervision of a licensed veterinarian. 
Medicated feed bearing or containing a VFD drug may be fed to animals 
only when there exists a lawful veterinary feed directive issued by a 
licensed veterinarian in the course of the veterinarian's professional 
practice.''

    Dated: June 25, 1999.
Margaret M. Dotzel,
Acting Associate Commissioner for Policy Coordination.
[FR Doc. 99-16857 Filed 7-1-99; 8:45 am]
BILLING CODE 4160-01-F