Maximum Civil Money Penalty Amounts and Compliance with the Federal Civil Penalties Inflation Adjustment Act
Federal Register: November 12, 2008 (Volume 73, Number 219)
Proposed Rules
Page 66811-66815
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DOCID:fr12no08-26
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration 21 CFR Part 17
Docket No. FDA-2008-N-0561
Maximum Civil Money Penalty Amounts and Compliance With the
Federal Civil Penalties Inflation Adjustment Act
AGENCY: Food and Drug Administration, HHS.
ACTION: Proposed rule.
SUMMARY: The Food and Drug Administration (FDA) is publishing this companion proposed rule to the direct final rule, published elsewhere in this issue of the Federal Register, which is intended to amend our regulations to adjust for inflation the maximum civil money penalty amounts for the various civil money penalty authorities within our jurisdiction. We are taking this action to comply with the Federal
Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA), as amended.
The last adjustment was published in the Federal Register of July 20, 2004 (69 FR 43299), and the FCPIAA requires Federal agencies to adjust their civil money penalties at least once every 4 years. This proposed rule does not adjust the civil money provisions
Page 66812
enacted by the Food and Drug Administration Amendments Act of 2007
(FDAAA).
DATES: Submit written or electronic comments on the proposed rule by
December 26, 2008. If FDA receives any timely significant adverse comments, the agency will publish a document withdrawing the direct final rule within 30 days after the comment period ends. FDA will then proceed to respond to comments under this proposed rule using the usual notice-and-comment procedures.
ADDRESSES: You may submit comments, identified by Docket No. FDA-2008-
N-0561, by any of the following methods:
Electronic Submissions
Submit electronic comments in the following way:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Written Submissions
Submit written submissions in the following ways:
FAX: 301-827-6870.
Mail/Hand delivery/Courier [For paper, disk, or CD-ROM submissions]: Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
To ensure more timely processing of comments, FDA is no longer accepting comments submitted to the agency by e-mail. FDA encourages you to continue to submit electronic comments by using the Federal eRulemaking Portal or the agency Web site, as described previously, in the ADDRESSES portion of this document under Electronic Submissions.
Instructions: All submissions received must include the agency name and Docket No. FDA-2008-N-0561 for this rulemaking. All comments received may be posted without change to http://www.regulations.gov, including any personal information provided. For additional information on submitting comments, see the ``Comments'' heading of the
SUPPLEMENTARY INFORMATION section of this document.
Docket: For access to the docket to read background documents or comments received, go to http://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the ``Search'' box and follow the prompts and/or go to the Division of
Dockets Management, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
Interested persons may submit to the Division of Dockets Management
(see ADDRESSES) written or electronic comments regarding this document.
Submit a single copy of electronic comments or two paper copies of any mailed comments, except that individuals may submit one paper copy.
Comments are to be identified with the docket number found in brackets in the heading of this document. Received comments may be seen in the
Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Erik Mettler, Office of Policy (HF- 11), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857, 301-827-3360.
SUPPLEMENTARY INFORMATION:
-
Background
In general, the FCPIAA (28 U.S.C. 2461 note, as amended by the Debt
Collection Improvement Act of 1996 (31 U.S.C. 3701)) requires Federal agencies to issue regulations to adjust for inflation each civil monetary penalty provided by law within their jurisdiction. The FCPIAA directs agencies to adjust the civil monetary penalties by October 23, 1996, and to make additional adjustments at least once every 4 years thereafter. The adjustments are based on changes in the cost of living, and the FCPIAA defines the cost of living adjustment as: `` * * * the percentage (if any) for each civil monetary penalty by which--(1) the
Consumer Price Index for the month of June of the calendar year preceding the adjustment, exceeds (2) the Consumer Price Index for the month of June of the calendar year in which the amount of such civil monetary penalty was last set or adjusted pursuant to law'' (28 U.S.C. 2461 note, section 5(b)).
The FCPIAA also prescribes a rounding method based on the size of the penalty after the calculated increase, but states that the first adjustment of a civil monetary penalty may not exceed 10 percent of the penalty.
The FCPIAA defines a civil monetary penalty as: ``any penalty, fine, or other sanction that--(A)(i) is for a specific monetary amount as provided by Federal law; or (ii) has a maximum amount provided for by Federal law; and (B) is assessed or enforced by an agency pursuant to Federal law; and (C) is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal Courts'' (28
U.S.C. 2461 note, section 3(2)).
Congress enacted the FCPIAA, in part, because it found that the impact of civil monetary penalties had been reduced by inflation and that reducing the impact of civil monetary penalties had weakened their deterrent effect.
In the Federal Register of July 20, 2004 (69 FR 43299), we published a final rule that identified 14 civil monetary penalties that fall within our jurisdiction and are subject to adjustments under the
FCPIAA. The final rule amended our regulations governing civil money penalties hearings found at part 17 (21 CFR part 17) to establish a new
Sec. 17.2 entitled ``Maximum penalty amounts'' to show the maximum civil monetary penalty amounts that were adjusted under the FCPIAA. The final rule also revised Sec. 17.1, which lists statutory provisions authorizing civil money penalties governed by the civil money penalty regulations as of August 28, 1995, updating the statutory citations.
-
What Changes Did We Make?
We revised the list of statutory monetary penalties in Sec. 17.1 to include the new penalties prescribed by the Federal Food, Drug, and
Cosmetic Act, as amended by FDAAA in 2007. These new penalties have been added as proposed new paragraphs (c) and (d). The table in Sec. 17.2 has also been amended to include the new penalties, and the adjusted maximum penalty amounts for the pre-FDAAA penalties have been updated to account for the inflation between June 2004 (the year of the last adjustment) and June 2007 as prescribed by FCPIAA. The per violation amount for 21 U.S.C. 333(f)(1)(A), the per violation per person amount for 21 U.S.C. 360pp(b)(1), and the per violation amount for 42 U.S.C. 263b(h)(3) have not been adjusted because the rounding rules of FCPIAA prevent an inflation adjustment in these cases. The new
FDAAA penalties have also not been adjusted because Congress only recently passed FDAAA on September 27, 2007. Finally, the ``Description of the Violation'' column in the table in Sec. 17.2 is proposed to be removed, as it is unnecessary for purposes of merely showing the adjustment in penalty amounts.
-
What is Proposed?
In brief, the proposed rule would:
Revise Sec. 17.1 to update the statutory citations regarding the new civil monetary penalties prescribed by FDAAA, and
Revise the table in Sec. 17.2 to include the new FDAAA penalties, and adjusts the pre-FDAAA maximum civil penalty amounts for inflation as prescribed by FCPIAA.
-
Additional Information
This proposed rule incorporates requirements specifically set forth in the FCPIAA requiring FDA to issue a
Page 66813
regulation implementing inflation adjustments for all its civil penalty provisions. These technical changes, required by law, do not substantively alter the existing regulatory framework, nor do they in any way affect the terms under which civil penalties are assessed by
FDA. The formula for the amount of the penalty adjustment is prescribed by Congress in the FCPIAA, and these changes are not subject to the exercise of discretion by FDA. In addition, FDA has made conforming changes to the regulations, which have no substantive effect, to reflect the new penalties prescribed by Congress in FDAAA.
This proposed rule is a companion to the direct final rule published elsewhere in this issue of the Federal Register. This companion proposed rule and the direct final rule are identical in substance. This companion proposed rule will provide the procedural framework to proceed with standard notice-and-comment rulemaking in the event the direct final rule receives significant adverse comment and is withdrawn. The comment period for the companion proposed rule runs concurrently with the comment period of the direct final rule. Any comments received under the companion proposed rule will be treated as comments regarding the direct final rule and vice versa.
A significant adverse comment is one that explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without change. A comment recommending a rule change in addition to this rule will not be considered a significant adverse comment unless the comment states why this rule would be ineffective without the additional change.
If no significant adverse comment is received in response to the direct final rule, no further action will be taken related to the companion proposed rule. Instead, we will publish a confirmation document within 30 days after the comment period ends. We intend the direct final rule to become effective 30 days after publication of the confirmation document.
If we receive significant adverse comments, we will withdraw the direct final rule. We will proceed to respond to all the comments received regarding the direct final rule, treating those comments as comments to this proposed rule. The agency will address the comments in the subsequent final rule. We will not provide additional opportunity for comment. If we receive a significant adverse comment which applies to part of the rule and that part may be severed from the remainder of the rule, we may adopt as final those parts of the rule that are not the subject of significant adverse comment.
For additional background information, see the corresponding direct final rule published elsewhere in this issue of the Federal Register.
-
Environmental Impact
We have determined under 21 CFR 25.30(a) and (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.
-
Paperwork Reduction Act 1995
We conclude that the civil monetary penalties adjustments in this proposed rule are not subject to review by the Office of Management and
Budget because they do not constitute a ``collection of information'' under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The adjustments do not require disclosure of any information to FDA, third parties, or the public.
-
Federalism
FDA has analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the agency has concluded that the rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.
-
Analysis of Impacts
FDA has examined the impacts of the proposed rule under Executive
Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act 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 net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this proposed rule is not a significant regulatory action under the
Executive order.
The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the proposed rule simply proposes to adjust the maximum amount of civil monetary penalties administered by FDA, and because the adjustment is required by the FCPIAA, the agency certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities.
Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing ``any rule that includes any Federal mandate that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.'' The current threshold after adjustment for inflation is $130 million, using the most current (2007) Implicit
Price Deflator for the Gross Domestic Product. FDA does not expect this proposed rule to result in any 1-year expenditure that would meet or exceed this amount.
-
Comments
Interested persons may submit to the Division of Dockets Management
(see ADDRESSES) written or electronic comments regarding this document.
This comment period runs concurrently with the comment period for the direct final rule; any comments received will be considered as comments regarding the direct final rule. Submit a single copy of electronic comments or two paper copies of any mailed comments, except that individuals may submit one paper copy. Comments are to be identified with the docket number found in brackets in the heading of this document. Received comments may be seen in the Division of Dockets
Management between 9 a.m. and 4 p.m., Monday through Friday.
Please note that on January 15, 2008, the FDA Division of Dockets
Management Web site transitioned to the Federal Dockets Management
System (FDMS). FDMS is a Government-wide, electronic docket management system. Electronic comments or submissions will be accepted by FDA only through FDMS at http://www.regulations.gov.
List of Subjects in 21 CFR Part 17
Administrative practice and procedure, Penalties.
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Therefore, under the Federal Food, Drug, and Cosmetic Act and the
Public Health Service Act, and under authority delegated to the
Commissioner of Food and Drugs, 21 CFR part 17 is amended as follows:
PART 17--CIVIL MONEY PENALTIES HEARINGS 1. The authority citation for 21 CFR part 17 continues to read as follows:
Authority: 21 U.S.C. 331, 333, 337, 351, 352, 355, 360, 360c, 360f, 360i, 360j, 371; 42 U.S.C. 262, 263b, 300aa-28; 5 U.S.C. 554, 555, 556, 557. 2. Section 17.1 is amended by redesignating paragraphs (c) through
(g) as paragraphs (e) through (i) and by adding new paragraphs (c) and
(d) to read as follows:
Sec. 17.1 Scope.
* * * * *
(c) Section 303(f)(3) of the act authorizing civil money penalties for certain violations relating to the submission of certifications and/or clinical trial information to the clinical trial data bank and section 303(f)(4) of the act authorizing civil money penalties for certain violations of the act relating to postmarket studies, clinical trial requirements, and risk evaluation and mitigation strategies for drugs.
(d) Section 303(g)(1) of the act authorizing civil money penalties for certain violations of the act that relate to dissemination of direct-to-consumer advertisements for approved drugs or biological products.
* * * * * 3. Section 17.2 is revised to read as follows:
Sec. 17.2 Maximum penalty amounts.
The following table shows maximum civil monetary penalties associated with the statutory provisions authorizing civil monetary penalties under the act or the Public Health Service Act.
Civil Monetary Penalties Authorities Administered by FDA and Adjusted
Maximum Penalty Amounts
Former
Adjusted
Maximum
Date of Last
Maximum
U.S.C.
Penalty
Assessment
Penalty Figure
Penalty
Section
Amount (in
Method
or Adjustment
Amount (in dollars)
dollars)
21 U.S.C.
333(b)(2 55,000
For each of the
2008
60,000
)(A)
first two violations in any 10-year period
333(b)(2 1,100,000
For each
2008 1,200,000
)(B)
violation after the second conviction in any 10-year period
333(b)(3 110,000
Per violation
2008
120,000
)
333(f)(1 16,500
Per violation
2008 16,500 (not
)(A)
adjusted)
333(f)(1 1,100,000
For the
2008 1,200,000
)(A)
aggregate of violations
333(f)(2 55,000
Per individual
2008
60,000
)(A)
333(f)(2 275,000
Per ``any other
2008
300,000
)(A)
person''
333(f)(2 550,000
For all
2008
600,000
)(A)
violations adjudicated in a single proceeding
333(f)(3 10,000
For all
2007 10,000 (not
)(A)
violations
adjusted) adjudicated in a single proceeding
333(f)(3 10,000
For each day the
2007 10,000 (not
)(B)
violation is
adjusted) not corrected after a 30-day period following notification until the violation is corrected
333(f)(4 250,000
Per violation
2007
250,000
)(A)(i)
(not adjusted)
333(f)(4 1,000,000
For all
2007 1,000,000
)(A)(i)
violations
(not adjudicated in
adjusted) a single proceeding
333(f)(4 250,000
For the first 30-
2007
250,000
)(A)(ii
day period (or
(not
)
any portion
adjusted) thereof) of continued violation following notification
333(f)(4 1,000,000
For any 30-day
2007 1,000,000
)(A)(ii
period, where
(not
)
the amount
adjusted) doubles for every 30-day period of continued violation after the first 30- day period
333(f)(4 10,000,000 For all
2007 10,000,000
)(A)(ii
violations
(not
)
adjudicated in
adjusted) a single proceeding
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333(g)(1 250,000
For the first
2007
250,000
)
violation in
(not any 3-year
adjusted) period
333(g)(1 500,000
For each
2007
500,000
)
subsequent
(not violation in
adjusted) any 3-year period
335b(a) 275,000
Per violation
2008
300,000 for an individual
335b(a) 1,100,000
Per violation
2008 1,200,000 for ``any other person''
360pp(b) 1,100
Per violation
2008 1,100 (not
(1)
per person
adjusted)
360pp(b) 330,000
For any related
2008
355,000
(1)
series of violations
42 U.S.C.
263b(h)( 11,000
Per violation
2008 11,000 (not 3)
adjusted)
300aa-28 110,000
Per occurrence
2008
120,000
(b)(1)
Dated: October 30, 2008.
Jeffrey Shuren,
Associate Commissioner for Policy and Planning.
FR Doc. E8-26864 Filed 11-10-08; 8:45 am
BILLING CODE 4160-01-S
