Dockets Management Branch
HFA-305
Food and Drug Administration
12420 Parklawn Drive
Room 1-23 Rockville, MD 20857
Dear Dockets Management Clerk:
On June 14, 1996, the Food and Drug Administration (FDA) published a notice of proposed rulemaking concerning the classification of immunohistochemistry reagents and kits (IHCs) into three classes based upon their intended use. The stated goal of the agency is to regulate these devices in a consistent fashion. 61 Fed. Reg. 30,197.
The Office of the Chief Counsel for Advocacy of the U.S. Small Business Administration was created in 1976 by Pub. L. No. 94-305 (codified as amended at 15 U.S.C. 634a-g, 637) to represent the views and interests of small businesses in federal policy making activities. The Chief Counsel participates in rulemakings when he deems it necessary to ensure proper representation of small business interests. In addition to these responsibilities, the Chief Counsel monitors agency compliance with the Regulatory Flexibility Act (RFA) and works with federal agencies to ensure that their rulemaking processes analyze the impact that decisions will have on small businesses.
Generally speaking, attempting to streamline a process and promote consistency in a regulatory regime does not create, as a rule, disparity in the regulatory burden on the regulated entities. However, in the instant rulemaking, the agency's certification that its action will not have a significant impact on a substantial number of small entities could not be further from the truth. In fact, hundreds of small businesses subject to the rule will be impacted negatively under the proposed rule. Many will be forced out of business immediately and others will suffer a lingering death. Prior to publication of its final rule, FDA must rethink its regulatory flexibility analysis and consider other alternatives which will accomplish the desired objectives yet reduce unnecessary burden on small entities
I. Specific Deficiencies Within the Rule
There are a number of specific problems within the rule due to both ambiguous drafting and failure to study the rule's impact. The alternatives that are offered herein for agency consideration are intended to clarify the rule and reduce unnecessary regulatory burden.
A. Scope of the Rule Requires Clarification
The scope of the rule includes "pre-1976 devices which have not been previously classified."(1) Although it is FDA's intent to make devices in commercial distribution prior to May 28, 1976 subject to the new classification requirements, doing so is inconsistent with FDA's own rules. According to the Code of Federal Regulations, "grandfathered" products--as proposed in the instant rulemaking--are exempt from 510(k) review.(2)
Alternatives: Exempt pre-1976 devices from the new labeling guidelines, or state a legal basis for non-applicability of the CFR provisions. Aside from the legal ramifications, Advocacy's recommendation will narrow the scope of the rule, and therefore, reduce the regulatory burden on a large number of small entities.
B. Definition of Class III Devices
As to which reagents are to be covered in the instant rule, it is important to realize that some antibodies can have uses in both research and in the clinical laboratory, while others only have utility in the area of basic research. By lumping both groups together, FDA eliminates useful research tools to which humans are not exposed and, in doing so, FDA retards future research developments.
According to industry experts, it would be counterproductive, for instance, to define an estrogen receptor (ER) generally as a Class III Device. The biology of ER lends itself, in some circumstances, to a research rather than a clinical tool.(3) Therefore, basing classification on the whole antigen rather than the specific properties of clones to an antigen subjects manufacturers to the unnecessary (and substantial) costs associated with obtaining approval for a Class III Device.
Alternatives: A solution recommended by the industry is for FDA to institute a new class of labeling. Dual use products that are to be used only in basic research can be labeled unambiguously to read: "For In Vitro Experimental Use Only. Not Intended for Use in Humans or Clinical Diagnosis." This alternative would keep the market for dual use products open, while accomplishing FDA's objective of assuring appropriate use of the product.
C. 510(k) Requirement
510(k) submissions should not be required for Class I devices because the benefits of the requirement do not outweigh the tremendous costs associated with the submission. Reagents are used by pathologists to prepare tissues and slides to diagnose, for example, a particular form of cancer. It is appropriate to place the reagents in the Class I low risk category and subject them to GMP standards and record keeping requirements. It is not appropriate to subject them to the 510(k) process with time consuming and expensive pre-market approval procedures.
FDA claims that "risk to patient may result from misdiagnosed and initiation of inappropriate therapies or withholding of appropriate therapies based on the results obtained with the IHC diagnostic device..."(4) Manufacturers, have no control over how accurately a pathologist interprets the results. The correct focus should be on GMP standards and the other key determinants of manufacturing consistency and compliance.
In addition, the rule states that "the degree of risk to the patient associated with the use of immunohistochemistry products depends on whether the given product is used as an adjunct to conventional histopathology diagnostic techniques, or provides information that is used independently of the conventional diagnostic process."(5) Industry experts say that IHC products have almost always been used solely as an adjunct to diagnosis since the 1940s. Because of their adjunctive role, IHCs prevent a very low level or risk. Moreover, as indicated above, the manufacturers have no control over the competency of the interpreters. Additional regulation by FDA will do nothing to lower risk with respect to interpretation.
Alternatives: Most IHC antibodies should fall into the Class I low risk, 510(k) exempt category to avoid burdensome regulations that do not necessarily accomplish FDA's stated objectives.
II. Economic Analysis of the Rule
According to industry experts, periodicals and manuals, there are between 3000 and 4000 antibody specificities offered by over 400 U.S. companies--most of which are small.(6) Notwithstanding the size of the industry and the number of products involved, FDA offers no analysis or study to support its conclusion that there will be no significant economic impact on a substantial number of small entities. FDA has arrived at this rather peculiar conclusion without any demonstrable analysis.
The Office of Advocacy has had direct contact with a small manufacturer from New York. The manufacturer produces about a dozen antibodies in relatively small quantities that would be subject to the proposed reclassification standards. According to the manufacturer, the 510(k) procedure alone easily would cost over $3500 per antibody. The manufacturer has less than fifty employees. Those individuals are sure to be standing in the unemployment line if what the manufacturer says about the cost of the 510(k) procedure is only half accurate.
This manufacturer is seemingly typical of hundreds of small companies across the country that service the area of cancer and other vital research. Most of these companies manufacture small quantities of large numbers of products under GMP regulations. What has been accomplished if these companies go under?
According to the Joint Council of Immunohistochemical Manufacturers, each company typically has 20% of these products generating 80% of sales. Its membership has estimated that a 510(k) submission requirement would cost between $10,000 and $40,000 per antibody when following the draft guidance.
III. Small Business Regulatory Enforcement Fairness Act of 1996
In order for an agency to certify that a rule will not have a significant economic impact on a substantial number of small entities, an agency must first demonstrate that they have made a reasonable preliminary assessment of what constitutes a small entity in the affected industry, the number of small entities likely to be affected, and the impact of the regulation on those businesses. The purpose of this analysis is not to bestow special privileges upon small entities, but to preserve competition in the marketplace between businesses of differing sizes. These are the requirements of the Regulatory Flexibility Act.
Although the RFA has been in existence for about twenty years, agencies have been far from diligent in adhering to the requirements of the law. However, on March 29, 1996, the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) was signed. The new law adds teeth to the RFA in that it provides for judicial review of agency analysis. An agency's determination that there will be no significant economic impact on a substantial number of small entities is judicially reviewable once a rule is finalized.
According to our analysis, FDA has not met its statutory burden under the RFA. As such, we believe that FDA has left itself vulnerable to lawsuits by aggrieved small manufacturers of reagents. To rectify the situation, FDA should conduct a final regulatory flexibility analysis, and incorporate reasonable alternatives into the final rule. FDA has an affirmative obligation to explain why reasonable alternatives--such as those indicated above--were rejected; and FDA also has an obligation to demonstrate that there has been outreach to the affected industry to determine the likely or potential impact. Simply, FDA must refashion its regulation so as not to impact small entities disproportionately--or face the consequences.
IV. Conclusion
The Office of Advocacy urges FDA to conduct a final regulatory flexibility analysis and consider incorporating the alternatives and recommendations cited herein. Anything less would result in an overly burdensome regulation and may subject FDA to lawsuits. Please feel free to contact the undersigned if you require additional information or assistance is needed in drafting the final rule, 202-205-6945.
Sincerely,
Jere W. Glover
Chief Counsel
Shawne M. Carter
Assistant Chief Counsel for Advocacy
ENDNOTES
1. 61 Fed. Reg. at 30,197 (proposed June 14, 1996).
2. 21 C.F.R. 807.85(b)(I).
3. There are many different antibodies to ER. Certain clones (e.g., clone 33) have no known or expected clinical utility.
4. 61 Fed. Reg. at 30,198.
5. Id.
6. See, e.g., Linscott's Directory. Also, the 1992 data derived from the U.S. Enterprise and Employment Microdatabase (USEEM) indicates that 80% of all firms in the category are small (fewer than 500 employees) when using the Standard Industrial Classification (SIC) for Diagnostic Substances (including blood derivative diagnostic reagents).