[Federal Register Volume 68, Number 167 (Thursday, August 28, 2003)]
[Rules and Regulations]
[Pages 51693-51704]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21980]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 101
[Docket No. 2003N-0346]
Food Labeling: Ingredient Labeling of Dietary Supplements That
Contain Botanicals
AGENCY: Food and Drug Administration, HHS.
ACTION: Direct final rule.
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SUMMARY: The Food and Drug Administration (FDA) is amending its
regulation on declaring botanical ingredients in dietary supplements to
incorporate by reference the latest editions of two books. Currently,
the regulation incorporates by reference Herbs of Commerce (1992) and
the International Code of Botanical Nomenclature (Tokyo Code) 1994. FDA
is replacing the references to these editions with the 2000 editions of
the same books. This action is intended to provide industry with
current and more comprehensive references to use in identifying on
product labels the common or usual name of each botanical ingredient
contained in dietary supplements. In addition, FDA is incorporating new
statutory restrictions on the use of the word ``ginseng'' in dietary
supplement labeling. Finally, FDA is making minor wording changes in
its regulation on declaring botanical ingredients in dietary
supplements. These changes are intended to improve the reader's
understanding, consistent with the principles of plain English, or to
be more technically accurate, consistent with internationally accepted
botanical terminology. FDA is issuing a direct final rule for this
action because FDA expects there will be no significant adverse
comments on the rule. Elsewhere in this issue of the Federal Register,
FDA is publishing a companion proposed rule through the usual notice-
and-comment rulemaking process. If FDA receives significant adverse
comment on either rule, FDA intends to withdraw the direct final rule
and proceed with the rulemaking. The companion proposed rule and direct
final rule are substantively identical.
DATES: This rule is effective January 1, 2006. Submit written or
electronic comments on this direct final rule by November 12, 2003. If
FDA receives no significant adverse comments within the specified
comment period, the agency intends to publish a document in the Federal
Register confirming the effective date of this direct final rule. If
the agency receives any timely significant adverse comments, FDA
intends to publish a document in the Federal Register withdrawing this
direct final rule before its effective date. The Director of the Office
of the Federal Register approves the incorporation by reference, in
accordance with 5 U.S.C. 552(a) and 1 CFR part 51, of certain
publications in 21 CFR 101.4(h) as of January 1, 2006.
ADDRESSES: Submit written comments on this direct final rule to the
Division of Dockets Management (HFA-305), Food and Drug Administration,
5630 Fishers Lane, rm. 1061, Rockville, MD 20852. Submit electronic
comments to http://www.fda.gov/dockets/ecomments.
FOR FURTHER INFORMATION CONTACT: Victoria Lutwak, Office of
Nutritional Products, Labeling, and Dietary Supplements, Center for
Food Safety and Applied Nutrition (HFS-810), Food and Drug
Administration, 5100 Paint Branch Pkwy., College Park, MD 20740, 301-
436-2375.
SUPPLEMENTARY INFORMATION:
[[Page 51694]]
I. Background
A. Rulemaking Process
FDA has determined that the subject of this rulemaking is suitable
for a direct final rule because it does not involve controversial
regulatory changes and FDA does not anticipate receiving any
significant adverse comments. This direct final rule has a companion
proposed rule addressing the same topic published in the proposed rules
section of this issue of the Federal Register. The direct final rule
and its companion proposed rule are substantively identical. The
proposed rule provides the procedural framework to finalize the rule in
the event that the direct final rule is withdrawn because FDA receives
significant adverse comment.
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 why it would be ineffective or unacceptable
without a change. In determining whether a significant adverse comment
is sufficient to terminate a direct final rulemaking, FDA will consider
whether the comment raises an issue serious enough to warrant a
substantive response in a notice-and-comment process. Comments that are
frivolous, insubstantial, or outside the scope of the rule will not be
considered adverse under this procedure. A comment recommending
additional changes in the rule will not be considered a significant
adverse comment, unless the comment states why the rule would be
ineffective without the recommended revision. In addition, if a
significant adverse comment applies to an amendment, paragraph, or
section of this rule and that provision can be severed from the
remainder of the rule, FDA may adopt as final those provisions of the
rule that are not the subject of a significant adverse comment.
The comment periods for the direct final rule and its companion
proposed rule run concurrently. We have identified and discussed the
regulatory changes in the preambles to both rules. Any comments
received under the direct final rule will be treated as comments
regarding the proposed rule and vice versa. FDA is publishing this
direct final rule because the rule does not contain controversial
changes and FDA does not anticipate receiving significant adverse
comments about it. If no significant adverse comments are received in
response to either rule, FDA will take no further action on the
proposed rule. Instead, after the comment period ends, FDA intends to
publish a document in the Federal Register to confirm the January 1,
2006, effective date of the direct final rule. This is the applicable
uniform effective date for compliance with food labeling requirements
published in the Federal Register (see the Federal Register of December
31, 2002 (67 FR 79851), designating January 1, 2006, as the effective
date for food labeling regulations issued between January 1, 2003, and
December 31, 2004). However, if FDA receives significant adverse
comment on either rule, FDA will withdraw the direct final rule and
will proceed to respond to all comments received on both rules under
the companion proposed rule using the usual notice-and-comment
procedures. A full description of FDA's policy on direct final rule
procedures appears in a guidance document published in the Federal
Register on November 21, 1997 (62 FR 62466).
B. Current Regulatory and Legislative Requirements Related to Direct
Final Rule Amendments
FDA issued a final rule entitled ``Food Labeling: Statement of
Identity, Nutrition Labeling and Ingredient Labeling of Dietary
Supplements'' in the Federal Register on September 23, 1997 (62 FR
49826). This rule incorporated by reference under Sec. 101.4(h) (21
CFR 101.4(h)) the two books entitled Herbs of Commerce (1992) (Ref. 1)
and International Code of Botanical Nomenclature (Tokyo Code) 1994
(Ref. 2) for industry's use in identifying on product labels the common
or usual name of each botanical ingredient contained in dietary
supplements. Both books were incorporated by reference in accordance
with 5 U.S.C. 552(a) and 1 CFR part 51.
Section 101.4(h) currently requires that a dietary supplement that
contains one or more botanical ingredients (including fungi and algae)
state the common or usual name for each of these ingredients on the
label. This common or usual name must be consistent with the
``standardized common name'' listed in Herbs of Commerce (1992) for the
corresponding plant from which the ingredient is derived. Therefore,
the ``standardized common name'' of each botanical used as an
ingredient of a dietary supplement is its common or usual name for
labeling purposes.
Current Sec. 101.4(h)(2) also requires that if no standardized
common name for a particular botanical ingredient is listed in Herbs of
Commerce (1992), the label must state the Latin binomial name of the
plant from which that ingredient is derived. All names in Latin
binomial form must be stated on the label in accordance with
internationally accepted rules on nomenclature, such as those found in
the International Code of Botanical Nomenclature (Tokyo Code) 1994.
Further, the name in Latin binomial form must include the designation
of the author or authors who published the Latin name [hereafter
referred to as author citation] when a positive identification of the
dietary ingredient cannot be made without identifying the author(s).
Since 1997, both of the books incorporated by reference for use by
industry in the labeling of dietary supplements that contain botanical
ingredients have been updated and now the 2000 editions supersede the
earlier ones. Herbs of Commerce, 2nd Edition (2000) (Ref. 3) added
standardized common names for approximately 1,500 more botanicals than
were included in the earlier edition, and changed the standardized
common names for approximately 140 botanicals listed in the earlier
edition. The International Code of Botanical Nomenclature (Saint Louis
Code) 2000 (Ref. 4) reflects the International Botanical Congress's
latest decisions on the rules for the scientific naming of plants.
Botanical nomenclature is an evolving science that is influenced by new
discoveries and the correction of past misidentifications of plants.
Further, in 2002, Congress passed and the President signed into law
the Farm Security and Rural Investment Act of 2002 (Public Law 107-171)
[hereafter referred to as the Farm Bill]. Section 10806 of the Farm
Bill amended the misbranding provisions in section 403 of the Federal
Food, Drug, and Cosmetic Act (the act ) (21 U.S.C. 343) by adding a new
paragraph (u), which states that a dietary supplement is misbranded
``[i]f it purports to be or is represented as ginseng, unless it is an
herb or herbal ingredient derived from a plant classified within the
genus Panax.'' Section 10806(b)(1)(A) of the Farm Bill states that
``the term `ginseng' may only be considered to be a common or usual
name (or part thereof) for any herb or herbal ingredient derived from a
plant classified within the genus Panax.'' Section 10806(b)(1)(B)
further provides that ``only labeling or advertising for herbs or
herbal ingredients classified within that genus may include the term
`ginseng.'''
The Farm Bill requirements about use of the term ``ginseng'' are in
effect today because the law is self-executing. Congress did not direct
FDA to issue regulations in order to implement these new requirements;
therefore, industry must comply with them currently.
[[Page 51695]]
C. Updated Books To Be Incorporated by Reference
Herbs of Commerce, 2nd Edition (2000) establishes a ``standardized
common name,'' expressed primarily in English, for each plant used in
commerce, including fungi and algae. However, in a few instances, the
standardized common name is expressed in another language or is the
same as the plant's Latin binomial name (i.e., genus and species) when
that name has become common. For example, the Spanish word ``mate'' is
the standardized common name for the plant ``Ilex paraguariensis A.
St.-Hil.,'' and the Latin binomial name ``Phyllanthus amarus'' is the
standardized common name for the plant ``Phyllanthus amarus Schumach.''
The standardized common name generally applies to the whole plant, but
in some instances it applies to a plant part. For example, the
standardized common names ``mace'' and ``nutmeg'' pertain specifically
to the plant parts ``aril'' and ``seed,'' respectively, of the same
plant ``Myristica fragrans Houtt.''
All standardized common names listed in Herbs of Commerce, 2nd
Edition (2000) are printed in boldface letters. In this book under
``Section One: Latin Binomials,'' each plant name is listed first
alphabetically by its Latin binomial name. The plant's corresponding
standardized common name is stated after the acronym ``SCN'' on the
first indented line of text underneath its Latin binomial name. Under
``Section Two: Standardized Common Names,'' each plant name is listed
first alphabetically by its standardized common name. The plant's
corresponding Latin binomial name is stated on the first indented line
of text underneath its standardized common name.
In addition to the standardized common name, Herbs of Commerce, 2nd
Edition (2000) identifies the currently recognized Latin binomial name
and four other categories of common names for each of the plants
listed, as applicable. These other categories are:
[sbull] ``botanical synonym,''
[sbull] ``Ayurvedic name,''
[sbull] ``pinyin name,'' and
[sbull] ``other common name.''
The botanical synonym, if any, represents one or more examples of
other Latin binomial names that have been broadly used for the plant in
the past. The Ayurvedic name, if any, generally represents the plant's
Sanskrit name; however, the Hindi name may be cited if the plant is
primarily known by it instead. The pinyin name, if any, may be one or
more of the plant's Chinese common names. Other common names, if any,
represent any additional names frequently used for the plant.
The ``standardized common name'' is different and distinct from all
of the other categories of common names for a plant. There is only one
standardized common name that is selected for each plant listed in
Herbs of Commerce, 2nd Edition (2000); however, there may be several
names cited within one or more of the other categories of common names
that are associated with the same plant.
The International Code of Botanical Nomenclature (Saint Louis Code)
2000 (the Code) establishes the current internationally accepted rules
that govern the scientific naming of plants, including fungi and algae.
The scientific name, which identifies the plant's genus and species, is
expressed in Latin and applies to the whole plant without exception.
The Latin binomial name of a plant is followed by the name(s) of the
person(s) who described and published the plant name in accordance with
the Code's guidelines. The Code refers to such notation about authors
as an ``author citation.''
II. Direct Final Rule
FDA is revising Sec. 101.4(h) to substitute Herbs of Commerce, 2nd
Edition (2000) for its 1992 edition, and the International Code of
Botanical Nomenclature (Saint Louis Code) 2000 for its 1994 edition, as
books incorporated by reference. Requirements on how these references
are to be used for dietary supplement labeling purposes remain the same
and are not affected by this direct final rule, with one minor
exception.
Currently, Sec. 101.4(h)(2) uses the phrase ``such as'' when
referring to the International Code of Botanical Nomenclature as a
reference that industry may use to ensure that any Latin binomial name
of a botanical ingredient listed on the label of a dietary supplement
conforms to the internationally accepted rules of botanical
nomenclature. As presently worded, the regulation could be interpreted
to allow other references to be consulted for this purpose. We are
revising the language in the Code of Federal Regulations (CFR) to make
the International Code of Botanical Nomenclature the only reference
that may be used on the rules for determining and formatting the Latin
binomial name of a botanical ingredient for dietary supplement labeling
purposes. This book is internationally recognized by botany experts
from nations around the world as the foremost authoritative reference
on botanical nomenclature. We are not aware of any comparable reference
that comprehensively addresses the rules on the scientific naming of
plants and has as broad international support. The International Code
of Botanical Nomenclature is regulated by the Nomenclature Section of
an International Botanical Congress. This group meets under the
auspices of the International Union of Biological Sciences, of which
the U.S. National Research Council/National Academy of Sciences is a
member. The XVI International Botanical Congress brought together more
than 4,000 scientists from more than 100 countries at its most recent
meeting held in Saint Louis, MO in 1999 when the International Code of
Botanical Nomenclature (Saint Louis Code) 2000 was voted on and
adopted. Therefore, to be in harmony with this international
cooperation and to be consistent with FDA's science-based philosophy,
this direct final rule is incorporating by reference the International
Code of Botanical Nomenclature (Saint Louis Code) 2000 as the one that
industry must follow on the rules to determine and format the Latin
binomial names of any botanical ingredients stated on dietary
supplement labels.
Some dietary supplements may contain a botanical ingredient that is
not listed in the 2000 edition of Herbs of Commerce and therefore does
not have a standardized common name. Like the former regulation, in
such cases the direct final rule is requiring that the common or usual
name for that botanical ingredient listed on the label be accompanied,
in parentheses, by the Latin binomial name of the plant from which it
is derived. When needed to positively identify the botanical
ingredient, the direct final rule is continuing to require that the
Latin binomial name also must include the author citation, stated in
accordance with the internationally accepted rules on botanical
nomenclature found in the International Code of Botanical Nomenclature
(Saint Louis Code) 2000.
FDA is aware that there may be instances when a botanical
ingredient belongs to a subspecies or variety of a species that is not
listed in the 2000 edition of Herbs of Commerce. In those cases, the
Latin binomial name and author citation alone will not identify the
subspecies or variety of that species. Although not a requirement, FDA
encourages industry to voluntarily state the following on dietary
supplement labels directly after the Latin binomial name when needed to
positively identify a botanical ingredient below the species level: The
name of any
[[Page 51696]]
applicable subspecies, variety, or other subdivision and its
corresponding author citation, stated in accordance with the
internationally accepted rules on botanical nomenclature found in the
International Code of Botanical Nomenclature (Saint Louis Code) 2000.
FDA is further revising Sec. 101.4(h) to incorporate statutory
restrictions on the use of the term ``ginseng'' that were imposed by
section 10806 of the Farm Bill. Specifically, the direct final rule
includes the following statement in Sec. 101.4(h): ``The use of the
term `ginseng' as a common or usual name (or part thereof) for any
dietary supplement or dietary ingredient is limited to those that are
derived from a plant classified within the genus `Panax.'''
Finally, FDA is making minor wording changes in Sec. 101.4(h) to
improve the reader's understanding, consistent with the principles of
plain English, or to improve technical accuracy, consistent with
internationally accepted botanical terminology. Examples of changes we
are making to improve the reader's understanding are using simpler
language throughout, substituting the word ``must'' for ``shall,'' and
dividing very long sentences into shorter ones. To be more technically
accurate, the direct final rule replaces the current wording under
Sec. 101.4(h)(2) that refers to the ``designation of the author or
author(s) who published the Latin name'' with the term ``author
citation'' to refer to the ``name(s) of the person(s) who described and
published the Latin binomial name in accordance with the
internationally accepted rules on botanical nomenclature found in the
International Code of Botanical Nomenclature (Saint Louis Code) 2000.''
For technical clarity, the direct final rule also adds the notation
``(i.e., genus and species)'' after the first reference to the term
``Latin binomial name'' under Sec. 101.4(h).
III. Use of the Incorporated References and Implementation of Pertinent
Farm Bill Provisions
Over the years, FDA has received several inquiries from
representatives of the dietary supplement industry about the use of
Herbs of Commerce and the International Code of Botanical Nomenclature.
These books are references for industry to use in determining the
common or usual name of each botanical ingredient or to consult on the
rules for determining and formatting any required Latin binomial names
corresponding to the botanical ingredients declared on dietary
supplement labels. The act of ``incorporation by reference,'' however,
does not imply that all of the botanicals that have standardized common
names listed in Herbs of Commerce or that follow the scientific naming
rules found in the International Code of Botanical Nomenclature are
safe for consumption as dietary supplements or other foods by man or
other animals. Citation of these books in the CFR is specific and
limited to the sole purpose of identifying authoritative references for
industry to use to determine the correct plant nomenclature. Neither
reference addresses the safety or uses of plants.
This direct final rule focuses only on the naming of botanical
ingredients of dietary supplements for labeling purposes. It is the
responsibility of manufacturers and distributors to ensure that the
particular botanicals they use as ingredients of dietary supplements
are safe for human consumption, do not contain contaminants, are
properly identified on the label, are legally marketed, and conform to
all governing regulations.
In addition, Herbs of Commerce, 2nd Edition (2000) does not
represent an authoritative compilation of botanical dietary ingredients
that were marketed in the United States before October 15, 1994 (i.e.,
botanicals that are not new dietary ingredients under section 413(c) of
the act (21 U.S.C. 350b(c))). The book's disclaimer explains that the
publisher did not verify whether or not the companies that submitted
botanical information for inclusion in this reference had valid
documentation that supported such marketing. The book's disclaimer
further states: ``The listing of a particular species of plant in this
work is not, therefore, in and of itself, evidence that such species
was marketed in the United States prior to October 15, 1994'' (Ref. 3,
page xx). This direct final rule does not confer FDA endorsement of
Herbs of Commerce, 2nd Edition (2000) for any other purpose than to
serve as a reference on the common or usual names of botanical
ingredients contained in dietary supplements.
In most cases, Herbs of Commerce, 2nd Edition (2000) assigns a
unique standardized common name to each plant. However, the book
indicates that the same standardized common name is given to more than
one plant when the plants are used interchangeably in commerce. There
are over 100 instances in Herbs of Commerce, 2nd Edition (2000) where
the same standardized common name applies to two or more different
species, subspecies, or varieties of the same genus of plant.
In other cases in Herbs of Commerce, 2nd Edition (2000), a name
listed under one of the categories of common names (e.g., Pinyin names)
for one botanical may be shared by another botanical from a different
genus of plants. For example, the botanical Ammi majus L. has the
standardized common name bishop's weed, whereas bishop's weed is also
listed as the other common name for the botanical Aegopodium podagraria
L. that has the standardized common name ash weed.
Confusion and mistakes in the identity of botanicals can be caused
when the ingredients have the same or similar common names. Therefore,
it is important that manufacturers know a botanical's true identity,
including its Latin binomial name with author citation and its
biological and chemical properties, before substituting one botanical
for another as an ingredient of a dietary supplement. It is the
responsibility of manufacturers and distributors to ensure that any
botanical used as an ingredient of a dietary supplement or other food
marketed in the United States is safe for consumption and complies with
all applicable requirements of the act.
The ``standardized common names'' of botanicals listed in both the
1992 and 2000 editions of Herbs of Commerce are consistent with the
Farm Bill's definition of the term ``ginseng.'' However, both editions
note that the term ``ginseng'' has been used as part of ``other common
names'' associated with botanicals from genera other than Panax,
including blue ginseng, lesser ginseng, prince ginseng, and Siberian
ginseng. We remind industry that names that include the term
``ginseng'' may be used as the common or usual name for a botanical
ingredient only if the botanical is derived from the plant genus
``Panax.''
IV. Environmental Impact
FDA has determined under 21 CFR 25.30(k) that this action is of a
type that does not individually or cumulatively have a significant
effect on the human environment. Therefore, neither an environment
assessment nor an environmental impact statement is required.
V. Regulatory Impact Analysis
FDA has examined the economic implications of this direct final
rule as required by Executive Order 12866. 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
[[Page 51697]]
Executive order classifies a regulatory action as significant if it
meets any one of a number of specified conditions, including: having an
annual effect on the economy of $100 million, adversely affecting a
sector of the economy in a material way, adversely affecting
competition, or adversely affecting jobs. The Executive order also
classifies a regulatory action as significant if it raises novel legal
or policy issues. We have determined that this direct final rule is not
a significant regulatory action as defined by the Executive order.
A. Regulatory Options
We have identified the following major regulatory alternatives or
options: (1) Take no action, (2) take the direct final rule action, and
(3) take an alternative action. These options are explained in the next
section of this document.
1. Option One: Take No Action
The incorporation by reference citations under Sec. 101.4(h) would
remain unchanged. Under this option, the following requirements and
provisos apply:
[sbull] The label of a dietary supplement containing a botanical
ingredient must use the ``standardized common name'' for that botanical
ingredient listed in the 1992 edition of Herbs of Commerce.
[sbull] For a botanical ingredient not listed in the 1992 edition
of Herbs of Commerce, the label could use any appropriately descriptive
name as the common or usual name, with the following exception. In
accordance with section 10806 of the Farm Bill, the use of the term
``ginseng'' as a common or usual name (or part thereof) for any dietary
supplement or dietary ingredient is limited to those that are derived
from a plant classified within the genus ``Panax.''
[sbull] Any common or usual name other than the ``standardized
common name'' for a botanical ingredient may be used only if the
botanical ingredient is not listed in Herbs of Commerce (1992), and
must be accompanied by the Latin binomial name of the plant from which
it is derived.
[sbull] The Latin binomial name must be stated in accordance with
the internationally accepted rules on botanical nomenclature, such as
those found in the International Code of Botanical Nomenclature (Tokyo
Code) 1994.
[sbull] The Latin binomial name of a botanical ingredient also must
include the designation of the author or authors who published the
Latin name, when a positive identification of the botanical cannot be
made in its absence.
2. Option Two: Take the Direct Final Rule Action
The direct final rule option would update the incorporation by
reference citations under Sec. 101.4(h). Under this option, the
following requirements and provisos apply:
[sbull] The label of a dietary supplement containing a botanical
ingredient must use the ``standardized common name'' for that botanical
ingredient listed in the 2000 edition of Herbs of Commerce.
[sbull] For a botanical ingredient not listed in the 2000 edition
of Herbs of Commerce, the label could use any appropriately descriptive
name as the common or usual name, with the following exception. As in
Option One, in accordance with section 10806 of the Farm Bill, the use
of the term ``ginseng'' as a common or usual name (or part thereof) for
any dietary supplement or dietary ingredient is limited to those that
are derived from a plant classified within the genus ``Panax.''
[sbull] Any common or usual name other than the ``standardized
common name'' for a botanical ingredient may be used only if the
botanical ingredient is not listed in Herbs of Commerce (2000), and
must be accompanied by the Latin binomial name of the plant from which
it is derived.
[sbull] The Latin binomial name must be stated in accordance with
the internationally accepted rules on botanical nomenclature found in
the International Code of Botanical Nomenclature (Saint Louis Code)
2000.
[sbull] When needed to positively identify the botanical
ingredient, the Latin binomial name also must include the author
citation (i.e., name(s) of the person(s) who described and published
the Latin binomial name in accordance with the internationally accepted
rules on botanical nomenclature found in the International Code of
Botanical Nomenclature (Saint Louis Code), 2000).
3. Option Three: Take an Alternative Action
This option is similar to the direct final rule option. We would
still update the incorporation by reference citations under Sec.
101.4(h), but firms would have slightly more flexibility when labeling
supplements containing a botanical ingredient. Under this option, the
following requirements and provisos apply:
[sbull] As in Option Two, if the ``standardized common name'' for a
botanical ingredient has changed from the 1992 to the 2000 edition of
Herbs of Commerce, firms must use the revised ``standardized common
name'' listed in the 2000 edition of Herbs of Commerce.
[sbull] If a botanical ingredient listed in the 2000 edition of
Herbs of Commerce was not previously listed in the 1992 edition of that
reference, firms could elect to use any of the names (i.e., botanical
synonym, Ayurvedic name, pinyin name, or other common name) listed for
that botanical in the 2000 edition as the common or usual name, with
the following exception. As in Options One and Two, in accordance with
section 10806 of the Farm Bill, the use of the term ``ginseng'' as a
common or usual name (or part thereof) for a dietary supplement or
dietary ingredient is limited to those that are derived from a plant
classified within the genus ``Panax.''
[sbull] Similar to Options One and Two, if the botanical ingredient
is not listed in either the 1992 or 2000 edition of Herbs of Commerce,
firms could use any appropriately descriptive name as the common or
usual name for that ingredient with the following exception. In
accordance with section 10806 of the Farm Bill, the use of the term
``ginseng'' as a common or usual name (or part thereof) for a dietary
supplement or dietary ingredient is limited to those that are derived
from a plant classified within the genus ``Panax.''
[sbull] As in Option Two, any common or usual name other than the
``standardized common name'' for a botanical ingredient may be used
only if the botanical ingredient is not listed in Herbs of Commerce
(2000), and must be accompanied by the Latin binomial name of the plant
from which it is derived.
[sbull] As in Option Two, the Latin binomial name must be stated in
accordance with the internationally accepted rules on botanical
nomenclature found in the International Code of Botanical Nomenclature
(Saint Louis Code) 2000.
[sbull] As in Option Two, when needed to positively identify the
botanical ingredient, the Latin binomial name also must include the
author citation (i.e., name(s) of the person(s) who described and
published the Latin binomial name in accordance with the
internationally accepted rules on botanical nomenclature found in the
International Code of Botanical Nomenclature (Saint Louis Code) 2000).
B. Impacts of Regulatory Options
1. Option One: Take No Action
This option would retain the 1992 edition of Herbs of Commerce as
the source for standardized common names and the 1994 edition of the
International Code of Botanical Nomenclature as the reference on how to
state the Latin
[[Page 51698]]
binomial names of botanical ingredients of dietary supplements. By
convention, we treat the option of taking no action as the baseline for
defining the costs and benefits of the other options. Therefore, we
discuss the impacts of this option indirectly via the costs and
benefits of the other options.
For this direct final rule, we include as part of the baseline
costs for Option One (take no action) the cost of section 10806 of the
Farm Bill, which restricts the use of the term ``ginseng'' in the
labeling of dietary supplements as discussed under section II, Direct
Final Rule, of this document. This is because the requirements of the
Farm Bill are already in effect and are not dependent upon this rule
for implementation.
2. Option Two: Take the Direct Final Rule Action
a. Costs of option two. The direct final rule would generate two
basic types of costs: (1) Costs associated with changing certain
dietary supplement labels and (2) potential one-time increases in
product search costs for some consumers.
We estimate the first type of cost by using a model developed for
that purpose by Research Triangle Institute (RTI) under contract to us
(Ref. 5). This model estimates the total cost to change product labels
by estimating and then adding together the following types of costs:
(1) Internal administrative, (2) graphic design, (3) pre-press, (4)
plate or cylinder engraving or etching, and (5) inventory disposal. The
first four costs depend, in part, on the number of stockkeeping units
(SKUs) involved. According to this model, dietary supplements are
associated with 29,514 SKUs (Ref. 5).
The direct final rule would not affect all of these SKUs, only
those associated with dietary supplements containing botanicals. We do
not have direct estimates of the number of SKUs associated specifically
with dietary supplements containing botanicals. However, a 1999 report
by RTI on the economic characteristics of the dietary supplement
industry found that herbals and botanicals made up 28 percent of sales
in the dietary supplement market (Ref. 6). A statement submitted to us
by the American Herbal Products Association (AHPA) noted that the
Nutrition Business Journal ``has consistently stated that herbal
products represent approximately 25 percent of the sales of all
supplements'' (Ref. 7). In the following analysis, we use the 28
percent figure rather than the 25 percent figure because it is better
documented and because the 28 percent figure is consistent with the
phrase ``approximately 25 percent.'' In the absence of other
information, we assume that the share of SKUs associated with products
containing botanicals is similar to the share of sales associated with
such products; that is, we assume that 28 percent of the total number
of SKUs associated with dietary supplements is associated with dietary
supplements containing botanicals. Therefore, we assume that
approximately 8,300 SKUs (29,514 SKUs x 28 percent) are associated with
dietary supplements containing botanicals.
In addition, the direct final rule would only affect dietary
supplements containing the following botanicals: (1) Any of the 1,500
additional botanicals for which the 2000 edition of Herbs of Commerce
establishes standardized common names, if the labels of those products
do not already list those botanicals under those names, (2) any of the
140 botanicals that the 2000 edition of Herbs of Commerce lists under a
different standardized common name than in the 1992 edition, and (3)
any botanical that the 2000 edition of the Herbs of Commerce does not
list and for which using the naming conventions in the 2000 edition of
the International Code of Botanical Nomenclature would result in a
different Latin binomial name or author citation than using the naming
conventions in the 1994 edition.
We do not know how many Latin binomial names the 2000 edition of
the International Code of Botanical Nomenclature has changed, because
that reference contains naming conventions rather than a list of names
that we could compare with another list of names. Firms may need to
change the labels of products containing botanicals that were listed
under the same standardized common names in both the 1992 and 2000
editions of Herbs of Commerce, if the firms voluntarily listed the
Latin binomial names of those botanicals and the 2000 edition of the
International Code of Botanical Nomenclature has changed those names.
We do not have information on the number of dietary supplements
this direct final rule would likely affect. AHPA reportedly reviewed
the labels of several hundred dietary supplements containing botanicals
and found that 85 percent fully conformed to the 2000 edition of Herbs
of Commerce (Ref. 7). Additional samples might find higher or lower
rates of compliance. In addition, labels that are already in compliance
with the 2000 edition of Herbs of Commerce might not be in compliance
with the 2000 edition of the International Code of Botanical
Nomenclature. To better reflect the uncertainty about the number of
dietary supplements this direct final rule would be likely to affect,
we assume it would affect between 10 and 20 percent of the 8,300 SKUs
associated with botanical supplements or from 830 SKUs (8,300 SKUs x 10
percent) to 1,660 SKUs (8,300 SKUs x 20 percent). This range
corresponds to an overall percentage of 3 (830 SKUs / 29,514 SKUs) to 6
percent (1,660 SKUs / 29,514 SKUs) of dietary supplement SKUs.
The labeling cost model we use does not base inventory disposal
costs specifically on SKUs, but on the types of labels firms generally
use for different types of products and assumptions about the amount of
inventory remaining under different compliance periods for different
types of products. We assume that the direct final rule would generate
between 3 and 6 percent of the inventory disposal costs the model
estimates for changing all dietary supplement SKUs.
The cost of changing product labels also varies with the amount of
time we give firms to change the labels. The effective date for this
direct final rule is January 1, 2006, which is the uniform effective
date for food labeling regulations published between January 1, 2003,
and December 31, 2004. We have chosen the uniform effective date for
implementing the direct final rule in part because it provides a
compliance period of at least 1 year following the publication of this
rule. Under this compliance period, the label cost model estimates that
the direct final rule would generate one-time relabeling costs of
between $2 million (830 SKUs x $2,400 per SKU) and $7 million (1,660
SKUs x $4,200 per SKU).
In addition, the direct final rule may generate a one-time increase
in product search costs for some consumers. Affected consumers would
include those who currently identify desired botanical ingredients by:
(1) Common or usual names that are different from the 1,500 new
standardized common names listed in the 2000 edition of the Herbs of
Commerce, (2) one of the 140 standardized common names changed by the
2000 edition of the Herbs of Commerce, or (3) one of the Latin binomial
names changed by the 2000 edition of the International Code of
Botanical Nomenclature. These consumers would need to learn the new
names for desired ingredients. We do not know the number of affected
consumers, but approximately 100 million adults (49 percent of adults
times 202,493,000 adults ages 18 and older in the United States in
1999) consumed dietary supplements
[[Page 51699]]
containing botanicals in 1999 (Refs. 8 and 9). Probably only a small
percentage of these consumers would be interested in one or more of the
botanicals whose names would be affected by this direct final rule. In
the absence of other information, we assume that the proportion of
consumers using the botanical ingredient names that the direct final
rule would change is the same as the proportion of labels bearing those
names or 3 to 6 percent. These percentages correspond to 3 to 6 million
consumers.
We do not know the amount of time these consumers would need to
discover that they cannot locate a product containing a desired
botanical ingredient by the name under which they were accustomed to
finding it, investigate the cause, and discover the new name. The
methods consumers would use to resolve these issues are probably: (1)
Asking a salesperson, (2) reading information on current botanical
names in books or the Internet, or (3) reading additional product
labels or brochures, some of which might voluntarily indicate the
relevant name changes. The amount of time particular consumers devote
to finding ingredients that have different names will vary with their
interest in the ingredient and the number of ingredients involved.
Consumers interested in multiple affected ingredients would probably
spend the greatest amount of time on the first change they encounter
because they could use some of the information they discover about that
change to deal with additional changes. For example, they might learn
that names have changed and develop a method for finding the new name.
We assume that each affected consumer might spend between 0 and 30
minutes to process the name changes. The average value of 1 hour of
leisure time should be similar to the average value of 1 hour of
working time, which was $15.66 in January 2001 (Ref. 10). Therefore, we
estimate a maximum search cost increase of between $23 million (3
million x 0.5 hours x $15.66 per hour) and $47 million (6 million x 0.5
hours x $15.66 per hour). This burden is a one-time cost, because
future consumers of these products would not need to switch from the
old name to the new name.
Combining the two types of costs, relabeling and search costs,
gives a range of total one-time costs of $25 to $54 million.
b. Benefits of option two. The direct final rule would reduce
product search costs for consumers who currently shop for dietary
supplements containing desired botanical ingredients by using Latin
binomial names or the nonstandardized names that might appear along
with Latin binomial names, but who would be able to use one or more of
the 1,500 additional standardized common names in the 2000 edition of
the Herbs of Commerce. The direct final rule would reduce these
consumers' search costs because standardized common names tend to be
shorter and more distinctive than Latin binomial names, and the same
ingredients would always appear under the same standardized common
name.
Other consumers who would benefit from the direct final rule are
those who shop for dietary supplements containing botanical ingredients
by using the standardized common names listed in the 1992 edition of
Herbs of Commerce, but who are currently unable to differentiate
desired ingredients from undesired ingredients using those standardized
names. Some of these consumers might be better able to differentiate
these ingredients using the more specific standardized common names in
the 2000 edition. As noted previously, the 2000 edition reports that it
has changed 140 names to improve specificity, accuracy, or both.
Additional consumers who would benefit are those who shop for
dietary supplements containing botanical ingredients using: (a) One or
more of the standardized common names that the 2000 edition of Herbs of
Commerce has changed to improve accuracy or (b) one or more of the
Latin binomial names that the 2000 edition of the International Code of
Botanical Nomenclature has changed due to a better understanding about
the taxonomic relationships between plants. These consumers shop for
dietary supplements using the botanical ingredient names in the 2000
edition of Herbs of Commerce or stated in accordance with the rules in
the 2000 edition of the International Code of Botanical Nomenclature
but sometimes have difficulty finding those dietary supplements because
the product labeling may use a name from or stated in accordance with
previous editions of those texts. The direct final rule would reduce
search costs for these consumers by reducing inconsistencies between
the botanical names in the 2000 editions of Herbs of Commerce and the
International Code of Botanical Nomenclature and the names used to
refer to those botanicals on dietary supplement labels.
We do not know the number of consumers in each of these categories.
Therefore, we again assume that the total number of consumers in all
affected categories would be between 3 and 6 percent of the estimated
100 million consumers who used a dietary supplement containing a
botanical ingredient in 1999, or 3 to 6 million consumers.
We also do not know the decrease in search costs that the consumers
in each of these categories would experience. However, we estimate the
possible range of total search cost reductions using three studies on
consumer behavior. The first study recorded the amount of time people
in drug stores spent looking at an item on the shelf before making a
purchase (Ref. 11) and found that customers, on average, spent
approximately 4 minutes studying a product before purchasing it.
According to data from RTI, adult consumers bought an average of six
units of dietary supplements containing a botanical ingredient in 1999.
Therefore, this study suggests that consumers of dietary supplements
containing botanicals spend an average of 24 minutes per year (six
units per year x 4 minutes per unit) looking at these products on
shelves before purchasing them.
The second study, called the Americans' Use of Time Project, used
time diaries to study how over 3,500 adults spent their time (Ref. 12).
This study found that adult Americans spent about 371 minutes per week
shopping for personal consumption items in 1985, such as groceries and
other household products. This study did not provide information on
time spent searching specifically for dietary supplements. To estimate
this time, we assume that the share of shopping time devoted to dietary
supplements is proportional to the share of consumers' budgets spent on
dietary supplements. According to an industry source and FDA
projections, consumers spent about $4.8 billion on dietary supplements
containing botanical ingredients in 1999 (Ref. 13). Consumers spent
$6,250 billion on personal consumption in 1999 (Ref. 14). We do not
know the personal consumption expenditures of people who specifically
purchase dietary supplements containing botanicals. Therefore, we
assume that the personal consumption expenditures of those consumers
are 49 percent of the personal consumption expenditures of all
consumers. We base this assumption on the estimate that 49 percent of
adult consumers used such a supplement in 1999, and the assumption that
those consumers spent about the same amount on personal consumption as
did other consumers. Under these assumptions, we estimate on the basis
of this study that consumers spend an average of 30 minutes per year
[($4.8 billion / [$6,250 billion X 0.49]) x 371 minutes per week
[[Page 51700]]
x 52 weeks per year] shopping for supplements containing botanicals.
The third study used hidden observers to track and record shopping
time in grocery stores (Ref. 15). This study found that people spent an
average of about 21 minutes shopping in the grocery store per trip to
the grocery store. By combining the estimated time per trip with the
Food Marketing Institute's finding that consumers average about 2.2
grocery shopping trips per week, we estimate shopping time for all
grocery store purchases to be 46.2 minutes per week (2.2 trips per week
x 21 minutes per trip) (Ref. 16). Again, we assume that the proportion
of shopping time devoted to dietary supplements equals the proportion
of grocery store expenditures on dietary supplements. In 1999,
consumers spent approximately $711 billion on grocery store purchases
(here defined as food, alcoholic beverages, housekeeping supplies,
personal care products, and tobacco products and smoking supplies)
(Ref. 17).
We again assume that 49 percent of this amount was spent by adults
who consumed dietary supplements containing botanicals. Based upon this
study and the stated assumptions, we estimate that consumers spend
about 33 minutes per year [($4.8 billion / [$711 billion X 0.49]) x 46
minutes per week x 52 weeks per year] shopping for dietary supplements
containing botanical ingredients.
All of the estimates of search costs are imprecise. None of these
studies looks at product search activity that does not involve
shopping, such as looking up material in books or on the Internet. The
grocery store and use of time studies both addressed shopping time,
which includes activities other than reading product labels.
Nevertheless, in the absence of additional information, we estimate
that this direct final rule could reduce one's shopping time by a
maximum of about 33 minutes (0.55 hours) per year. Applying this time
savings to the estimated 3 to 6 million affected consumers and the
average value of time of $15.66 gives maximum search cost savings of
between $26 million (0.55 hours per year x 3 million x $15.66 per hour)
and $52 million (0.55 hours per year x 6 million x $15.66 per hour) per
year. The direct final rule, however, would not eliminate all search
costs associated with dietary supplements containing botanical
ingredients for consumers interested in the affected products. To
reflect this fact, we assume that this direct final rule would
eliminate between 10 and 20 percent of those search costs, which would
result in a range of search cost savings of $3 to $10 million per year
($2.6 million x 10 percent to $52 million x 20 percent). These benefits
would recur annually because they would apply whenever a consumer
actively searched for products containing the relevant ingredients,
unlike the one-time increases in search costs that some consumers might
face because the direct final rule would change existing botanical
ingredient names.
Based on the preceding discussion, we estimate this direct final
rule would generate net costs in the first year of between $15 to $51
million, and net benefits of $3 to $10 million every year after the
first year. Under a discount rate of 7 percent, the present value of an
infinite stream of benefits of $3 million per year is $43 million ($3
million / 7 percent), and the present value of an infinite stream of
benefits of $10 million per year is $143 million ($10 million / 7
percent). Therefore, over time, this option would generate net benefits
of negative $8 million ($43 million - $51 million) to $128 million
($143 million - $15 million). The stream of benefits that would exactly
offset the maximum estimated cost of $51 million to give zero net costs
is $4 million ($4 million / 7 percent = $57 million) per year out of
the potential range of $3 to $10 million per year. Therefore, this
direct final rule would probably generate net benefits.
3. Option Three: Take an Alternative Action (as described under section
V.A, Regulatory Options, of this document)
As discussed under section I, Background, of this document, in
addition to standardized common names and Latin binomial names, the
2000 edition of Herbs of Commerce includes up to four other categories
of names (i.e., botanical synonyms, Ayurvedic names, pinyin names and
other common names) for each plant listed, when applicable. In order to
reduce the number of label and name changes that we would require under
Option Two, we could allow firms using any of the 1,500 botanicals that
were not listed in the 1992 edition of Herbs of Commerce, but that are
listed in the 2000 edition, to continue to label their products as they
do now, as long as the name used for a botanical ingredient meets one
of the following requirements: (1) Is among the names for the
respective botanical listed in the 2000 edition and complies with the
Farm Bill requirement concerning the use of the term ``ginseng'' and
(2) is accompanied by the corresponding Latin binomial name, stated to
conform to the naming conventions of the 2000 edition of the
International Code of Botanical Nomenclature, including the author
citation when needed for a positive identification of the botanical.
a. Costs of option three. This option would generate the same
labeling costs as Option Two, except that some firms manufacturing or
labeling dietary supplements containing one or more of the 1,500
botanical ingredients for which the 2000 edition of Herbs of Commerce
establishes new standardized common names would not need to revise the
labels of those products. The product whose labels would not need to be
revised are, with some exceptions, those that currently list botanical
ingredients by any one of their corresponding names found in the 2000
edition of Herbs of Commerce. The exceptions whose labels would
nonetheless need to be revised, are those with names that conflict with
the Farm Bill restriction on the use of the term ``ginseng,'' or that
do not state the correct Latin binomial names must be stated in
accordance with the naming conventions of the 2000 edition of the
International Code of Botanical Nomenclature and include the author
citations when needed for a positive identification of the botanicals.
We do not know the number of such products. Using the cost estimated
for Option Two, we estimate that the label change costs for Option
Three would also be between $2 and $7 million, except that the cost of
this option must be the same or less than the costs of Option Two.
Option Three would also generate the same short-term increases in
product search costs as Option Two, except that some consumers who
currently use one of the other names listed in the 2000 edition of
Herbs of Commerce to identify botanical ingredients would be able to
continue to use those names to identify those ingredients. We do not
know the number of such consumers. Using the cost estimated for Option
Two, we estimate that the increase of search costs under Option Three
would also be between $23 and $47 million, except that these costs must
be the same or less than the corresponding costs of Option Two, because
the consumers affected by this cost under Option Three are a subset of
the consumers affected by this cost under Option Two.
b. Benefits of option three. This option would generate the same
reduction in long-term search costs as Option Two, except that fewer
consumers who currently shop for dietary supplements using
nonstandardized names would instead be able to use standardized common
names to more easily identify those ingredients in other supplements.
Again, we do not have sufficiently
[[Page 51701]]
detailed information to distinguish the size of this benefit from that
of Option Two, so we again estimate the benefits to be between $3 and
$10 million per year, except that they must be the same or less than
the benefits of Option Two because the source of benefits under Option
Three is a subset of the sources of benefits under Option Two.
We cannot compare the net benefits of Option Three to those of
Option Two because the costs and benefits of Option Three are both
lower, and we do not know the relative size of the changes in costs and
benefits. If, however, the costs and benefits of Option Three were
below those of Option Two by the same proportion, then Option Three
would probably have lower net benefits than Option Two.
VI. Regulatory Flexibility Analysis
FDA has examined the economic implications of this direct final
rule as required by the Regulatory Flexibility Act (5 U.S.C. 601-612).
If a rule has a significant economic impact on a substantial number of
small entities, the Regulatory Flexibility Act requires us to analyze
regulatory options that would minimize the economic effect of the rule
on small entities. We find that this direct final rule will have a
significant economic impact on a substantial number of small entities.
A. Regulatory Options
In the preceding preliminary regulatory impact analysis under
section V.A, Regulatory Options, of this document, we identified the
following major regulatory alternatives or options: (1) Take no action,
(2) take the direct final rule action, and (3) take an alternative
action. We request comments on these and any other plausible
alternatives.
B. Impacts of Regulatory Options
1. Option One: Take No Action
The incorporation by reference citations under Sec. 101.4(h) would
remain unchanged. Under this option, the following requirements and
provisos apply:
[sbull] The label of a dietary supplement containing a botanical
ingredient must use the ``standardized common name'' for that botanical
ingredient listed in the 1992 edition of Herbs of Commerce.
[sbull] For a botanical ingredient not listed in the 1992 edition
of Herbs of Commerce, the label could use any appropriately descriptive
name as the common or usual name, with the following exception. In
accordance with section 10806 of the Farm Bill, the use of the term
``ginseng'' as a common or usual name (or part thereof) for any dietary
supplement or dietary ingredient is limited to those that are derived
from a plant classified within the genus ``Panax.''
[sbull] Any common or usual name other than the ``standardized
common name'' for a botanical ingredient may be used only if the
botanical ingredient is not listed in Herbs of Commerce (1992), and
must be accompanied by the Latin binomial name of the plant from which
it is derived.
[sbull] The Latin binomial name must be stated in accordance with
the internationally accepted rules on botanical nomenclature, such as
those found in the International Code of Botanical Nomenclature (Tokyo
Code) 1994.
[sbull] The Latin binomial name of a botanical ingredient also must
include the designation of the author or authors who published the
Latin name, when a positive identification of the botanical cannot be
made in its absence.
Taking no additional action beyond the current regulatory regime
that we described in the previous paragraphs would have no effect on
small entities relative to the status quo.
2. Option Two: Take the Direct Final Rule Action
The direct final rule action is to update the incorporation by
reference citations under Sec. 101.4(h). Under this option, the
following requirements and provisos apply:
[sbull] The label of a dietary supplement containing a botanical
ingredient must use the ``standardized common name'' for that botanical
ingredient listed in the 2000 edition of Herbs of Commerce.
[sbull] For a botanical ingredient not listed in the 2000 edition
of Herbs of Commerce, the label could use any appropriately descriptive
name as the common or usual name, with the following exception. As in
Option One, in accordance with section 10806 of the Farm Bill, the use
of the term ``ginseng'' as a common or usual name (or part thereof) for
any dietary supplement or dietary ingredient is limited to those that
are derived from a plant classified within the genus ``Panax.''
[sbull] Any common or usual name other than the ``standardized
common name'' for a botanical ingredient may be used only if the
botanical ingredient is not listed in Herbs of Commerce (2000), and
must be accompanied by the Latin binomial name of the plant from which
it is derived.
[sbull] The Latin binomial name must be stated in accordance with
the internationally accepted rules on botanical nomenclature found in
the International Code of Botanical Nomenclature (Saint Louis Code)
2000.
[sbull] When needed to positively identify the botanical
ingredient, the Latin binomial name also must include the author
citation (i.e., name(s) of the person(s) who described and published
the Latin binomial name in accordance with the internationally accepted
rules on botanical nomenclature found in the International Code of
Botanical Nomenclature (Saint Louis Code) 2000).
The direct final rule would cause some small businesses to change
product labels as described in the preceding regulatory impact
analysis. It would not affect any other class of small entities. RTI
developed a Dietary Supplement Enhanced Establishment Database (DS-EED)
under contract to us. RTI based the DS-EED on our official
establishment inventory and supplemented it with information from trade
organizations, trade shows, and electronic databases (Ref. 6).
According to these data, approximately 350 to 1,260 establishments
might manufacture, repackage, or relabel supplements containing
botanicals.
The Small Business Administration (SBA) defines a small business in
the dietary supplement industry as a business having 500 or fewer
employees. RTI traced the establishments to the parent company to
determine how many establishments belonged to small firms. Based on
that study, between 60 and 90 percent of the 1,260 establishments
belong to small firms, or between approximately 700 and 1,200
establishments. However, the RTI study did not provide information on
the total number of firms associated with those establishments.
In a letter to FDA, AHPA claims that between 600 and 1,100 firms
produce at least one dietary supplement product containing an herbal
ingredient and are also involved in labeling products (Ref. 7). The
letter also states that the editor of the Nutrition Business Journal
told APHA that between 95 and 96 percent of dietary supplement
companies have 500 or fewer employees. This information appears
consistent with the information on establishments provided by RTI. We
do not know how many of these firms would actually need to revise their
labels. Therefore, we estimate that the direct final rule would affect
between 0 and 1,045 small firms.
We assume that these firms would face 96 percent of the maximum
total labeling costs for all firms we estimated in this document's
preceding section V.B.2.a, Costs of Option Two, which were $2 to $7
million. Therefore, we estimate that this direct final rule would
generate one-time costs for small firms
[[Page 51702]]
of between $2 and $7 million, after rounding to the nearest million.
3. Option Three: Take an Alternative Action
This option is similar to the direct final rule action. We would
still update the incorporation by reference citations under Sec.
101.4(h), but firms would have slightly more flexibility when labeling
dietary supplements containing a botanical ingredient. Under this
option, the following requirements and provisos apply:
[sbull] As in Option Two, if the ``standardized common name'' for a
botanical ingredient has changed from the 1992 to the 2000 edition of
Herbs of Commerce, firms must use the revised ``standardized common
name'' listed in the 2000 edition of Herbs of Commerce.
[sbull] If a botanical ingredient listed in the 2000 edition of
Herbs of Commerce was not previously listed in the 1992 edition of that
reference, firms could elect to use any of the names (i.e., botanical
synonym, Ayurvedic name, pinyin name, or other common name) listed for
that botanical in the 2000 edition as the common or usual name, with
the following exception. As in Options One and Two, in accordance with
section 10806 of the Farm Bill, the use of the term ``ginseng'' as a
common or usual name (or part thereof) for a dietary supplement or
dietary ingredient is limited to those that are derived from a plant
classified within the genus ``Panax.''
[sbull] Similar to Options One and Two, if the botanical ingredient
is not listed in either the 1992 or 2000 edition of Herbs of Commerce,
firms could use any appropriately descriptive name as the common or
usual name for that ingredient with the following exception. In
accordance with section 10806 of the Farm Bill, the use of the term
``ginseng'' as a common or usual name (or part thereof) for a dietary
supplement or dietary ingredient is limited to those that are derived
from a plant classified within the genus ``Panax.''
[sbull] As in Option Two, any common or usual name other than the
``standardized common name'' for a botanical ingredient may be used
only if the botanical is not listed in Herbs of Commerce (2000), and
must be accompanied by the Latin binomial name of the plant from which
it is derived.
[sbull] As in Option Two, the Latin binomial name must be stated in
accordance with the internationally accepted rules on botanical
nomenclature found in the International Code of Botanical Nomenclature
(Saint Louis Code) 2000.
[sbull] As in Option Two, when needed to positively identify the
botanical ingredient, the Latin binomial name also must include the
author citation (i.e., name(s) of the person(s) who described and
published the Latin binomial name in accordance with the
internationally accepted rules on botanical nomenclature found in the
International Code of Botanical Nomenclature (Saint Louis Code) 2000).
We discussed this option under this document's preceding section
V.B.3.a, Costs of Option Three, and concluded that it would generate
lower relabeling costs for all firms than the direct final rule action.
However, we were unable to estimate the size of the cost reduction and
again concluded that labeling costs could be anywhere from $2 to $7
million, except that the costs of this option must be the same or less
than the costs of Option Two. These conclusions also hold for small
firms, which make up the vast majority of the affected firms. Although
Option Three would reduce the impact of the direct final rule on small
firms, it would also reduce the benefits by an unknown amount. We have
decided not to pursue this option because the potential cost savings
for small firms would be modest and we do not know the impact on
benefits.
VII. Paperwork Reduction Act of 1995
FDA concludes that the labeling requirements in this document 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). Rather, these
dietary supplement labeling requirements are a ``public disclosure of
information originally supplied by the Federal government to the
recipient for the purpose of disclosure to the public'' (5 CFR
1320.3(c)(2)).
VIII. Unfunded Mandates Reform Act of 1995
Section 202(a) of the Unfunded Mandates Reform Act of 1995 (Public
Law 104-4) requires that agencies prepare a written statement of
anticipated costs and benefits before proposing any rule that may
result in an expenditure by State, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million in any one
year (adjusted annually for inflation).
The Unfunded Mandates Reform Act does not require FDA to prepare a
statement of costs and benefits for the direct final rule, because the
direct final rule is not expected to result in any one-year expenditure
that would exceed $100 million adjusted for inflation. The current
inflation-adjusted statutory threshold is $112 million.
IX. Federalism
FDA has analyzed this direct final rule in accordance with the
principles set forth in Executive Order 13132. FDA has determined that
the rule has a preemptive effect on State law. Section 4(a) of the
Executive order requires agencies to:
* * * construe * * * a Federal Statute to preempt State law
only where the statute contains an express preemption provision, or
there is some other clear evidence that the Congress intended
preemption of State law, or where the exercise of State authority
conflicts with the exercise of Federal authority under the Federal
statute.
Section 403A of the act (21 U.S.C. 343-1) is an express preemption
provision. That section provides that ``no State or political
subdivision of a State may directly or indirectly establish under any
authority or continue in effect as to any food in interstate commerce''
certain food labeling requirements, unless an exemption is provided by
the Secretary of Health and Human Services (and, by delegation, FDA).
Relevant to this rule, one such requirement that States and political
subdivisions may not adopt is ``any requirement for the labeling of
food of the type required by section * * * 403(i)(2) that is not
identical to the requirement of such section,'' (section 403A(a)(2) of
the act). Another such requirement that States and political
subdivisions may not adopt is ``any requirement for the labeling of
food of the type required by section * * * 403(i)(1) that is not
identical to the requirement of such section,'' (section 403A(a)(3) of
the act). Prior to the effective date of this direct final rule, this
provision operates to preempt States from imposing requirements
concerning the use of botanical names in dietary supplement labeling if
the requirements concerning the use of those names are not identical to
those contained in Sec. 101.4(h) (incorporating by reference Herbs of
Commerce (1992) and the International Code of Botanical Nomenclature
(Tokyo Code) 1994). Specifically, the preemptive effect applies to
requirements concerning the use of botanical names in the common or
usual name on the label of a dietary supplement (section 403(i)(1) of
the act) and to requirements for listing individual botanical
ingredients on the label of a dietary supplement (section 403(i)(2) of
the act). Once this direct final rule becomes effective, States will be
preempted from imposing any such requirements concerning the use of
[[Page 51703]]
botanical names on dietary supplement labels that are not identical to
those required by the new rule, which amends the existing Sec.
101.4(h) to incorporate by reference Herbs of Commerce (2000) and the
International Code of Botanical Nomenclature (Tokyo Code) 2000, and to
incorporate new Federal legislative restrictions on the use of the term
``ginseng'' in dietary supplement labeling.
Section 403A(a)(2) to (a)(3) of the act displaces both State
legislative requirements and State common-law duties (Medtronic v.
Lohr, 518 U.S. 470, 503 (1996) (Breyer, J., concurring in part and
concurring in the judgment); id. at 510 (O'Connor, J., joined by
Rehnquist, C. J., Scalia, J., and Thomas, J., concurring in part and
dissenting in part); Cipollone v. Liggett Group, Inc., 505 U.S. 504,
521 (1992) (plurality opinion); id. at 548-49 (Scalia, J., joined by
Thomas, J., concurring in part in the judgment and dissenting in
part)). Although this rule has preemptive effect in that it would
preclude States from adopting statutes, issuing regulations, or
adopting or enforcing any requirements, including State tort-law
imposed requirements, that are not identical to the requirements of
this rule, this preemptive effect is consistent with what Congress set
forth in section 403A of the act.
Section 4(e) of the Executive order states that ``when an agency
proposes to act through adjudication or rulemaking to preempt State
law, the agency shall provide all affected State and local officials
notice and an opportunity for appropriate participation in the
proceedings.'' Similarly, section 6(c) of the Executive order states
that:
* * * to the extent practicable and permitted by law, no agency
shall promulgate any regulation that has federalism implications and
that preempts state law, unless the agency, prior to the formal
promulgation of the regulation * * * consulted with State and local
officials early in the process of developing the proposed
regulation.
This requirement, that FDA provide the States with an opportunity for
appropriate participation in this rulemaking, has been met. This rule
updates and makes minor changes to a rule that was first proposed
through full notice-and-comment rulemaking procedures in 1995 and
finalized in 1997. During the comment period prior to the issuance of
the 1997 final rule, and after the publication of the final rule, the
agency received no comments, correspondence, or other communications
from any State or local government concerning preemption of an existing
legislative or common-law requirement. In its consultation with states
prior to the publication of this direct final rule, FDA was not
informed about any State requirements that would be in conflict with
the Federal requirements in this rule, and no States expressed concerns
over the rule's preemptive effect. Moreover, FDA is providing an
opportunity for State and local officials to comment through this
rulemaking, and intends to withdraw the direct final rule if
significant adverse comments are received.
In conclusion, the agency believes that it has complied with all of
the applicable requirements under the Executive order, and has
determined that the preemptive effects of this rule are consistent with
Executive Order 13132.
X. 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 that for the companion
proposed rule. Submit a single copy of electronic comments or two paper
copies of any mailed comments, except that individuals may submit one
paper copy. Submit electronic comments to http://www.fda.gov/dockets/ecomments. 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. FDA will consider any comments received on
either this direct final rule or the companion proposed rule to be
comments received on both rules.
XI. Effective Date
FDA periodically establishes, by final rule in the Federal
Register, uniform effective dates for compliance with food labeling
regulations (see, e.g., the Federal Register of December 31, 2002 (67
FR 79851), designating the effective date of January 1, 2006, for food
labeling regulations issued between January 1, 2003, and December 31,
2004). FDA intends to make this direct final rule effective on January
1, 2006, the uniform effective date for compliance with food labeling
regulations published between January 1, 2003, and December 31, 2004.
FDA will publish a document in the Federal Register to confirm the
effective date of this direct final rule, if FDA receives no
significant adverse comments on it or its companion proposed rule.
XII. References
Copies of the following references have been placed on display and
may be seen by interested persons between 9 a.m. and 4 p.m., Monday
through Friday at the Division of Dockets Management (see ADDRESSES).
FDA has verified the Web site addresses, but is not responsible for
subsequent changes to the Web sites after this document publishes in
the Federal Register.
1. Foster, Steven, editor, Herbs of Commerce, American Herbal
Products Association, Austin, TX, 1992.
2. Greuter, W., editor (chairman), International Code of
Botanical Nomenclature (Tokyo Code) 1994, adopted by the 15th
International Botanical Congress, Koeltz Scientific Books, D-61453
K[ouml]nigstein, Germany, 1994.
3. McGuffin, Michael, managing editor, Herbs of Commerce, 2nd
Edition, American Herbal Products Association, Silver Spring, MD,
2000.
4. Greuter, W., editor (chairman), International Code of
Botanical Nomenclature (Saint Louis Code) 2000, adopted by the 16th
International Botanical Congress, Koeltz Scientific Books, D-61453
K[ouml]nigstein, Germany, 2000.
5. FDA Labeling Cost Model: Final Report, Research Triangle
Institute (RTI) International, April 2002, Revised.
6. Economic Characterization of the Dietary Supplement Industry,
Research Triangle Institute (RTI), March 1999, p. 5-1.
7. Letter from Michael McGuffin, President, American Herbal
Products Association, to Rhonda R. Kane, Consumer Safety Officer,
FDA, May 13, 2002, pp. 1-6 with 3 attachments.
8. ``Consumer Use of Dietary Supplements,'' Prevention Magazine
Survey, Table A, Prevention Magazine, 2000, p. 13.
9. Statistical Abstract of the United States: 2000, Table Number
13--Resident Population by Sex and Age: 1999, U.S. Census Bureau,
Washington, DC, p. 14. Obtained data at the Internet site http://www.census.gov/prod/2001pubs/statab/sec01.pdf on June 19, 2002.
10. National Employment, Hours, and Earnings, Bureau of Labor
Statistics, U.S. Department of Labor, Washington, DC. Obtained data
from the Internet site http://data.bls.gov/cgi-bin/srgate on August
14, 2002. To view the data used, enter the number EES00510006 in the
series id window, select the year 2001-2002 in the years to report
window, and select the button ``retrieve data.''
11. ``The Power of Persuasion at the Moment of Truth,'' Drug
Store News, 19(20):3-8, 22, and 24, December 8, 1997.
12. Robinson, J. P. and G. Godbey, Time for Life: The Surprising
Ways Americans Use Their Time, Second Edition, The Pennsylvania
State University Press, University Park, PA, 1997, Appendix A, 1985
column, categories 30 to 39, pp. 355 and 356.
13. Guthrie, J. F., K. M. Koehler, and R. A. Scharff: Trends in
the Consumption of Dietary Supplements 1994-2000, Table 11-Growth in
Market Size and Per Capita Consumption of Dietary Supplements, 1994-
2000, Panel A, Unpublished document, Center for Food Safety and
Applied Nutrition, FDA, Washington, DC, July 12, 2000, p. 29.
[[Page 51704]]
14. Economic Report of the President, Table B-16--Personal
Consumption Expenditures, 1959-2001, U.S. Government Printing
Office, Washington, DC, February 2002. Obtained data at the Internet
site http://w3.access.gpo.gov/usbudget/fy2003/sheets/b16.xls on
August 14, 2002.
15. ``Customer Behavior: How Consumers Shop,'' Progressive
Grocer, December 1992, pp. 62-64.
16. ``A Shopping for Health Report, 1998: A Look at the Self-
Care Movement,'' Food Marketing Institute, Research Department,
Washington, DC, and Prevention Magazine, Research Department, Emmaus
PA, 1998, p. 2.
17. Consumer Expenditures in 1999, Report 949, Table A--Average
Annual Expenditures of All Consumer Units and Percent Changes,
Consumer Expenditure Survey, 1997-99, Bureau of Labor Statistics,
U.S. Department of Labor, Washington, DC, May 2001, p. 3. Obtained
data from the Internet site http://stats.bls.gov/cex/csxann99.pdf on
July 25, 2002.
List of Subjects in 21 CFR Part 101
Food labeling, Incorporation by reference, Nutrition, Reporting and
recordkeeping requirements.
0
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
101 is amended as follows:
PART 101--FOOD LABELING
0
1. The authority citation for 21 CFR part 101 continues to read as
follows:
Authority: 15 U.S.C 1453, 1454, 1455; 21 U.S.C. 321, 331, 342,
343, 348, 371; 42 U.S.C. 243, 264, 271.
0
2. Section 101.4 is amended by revising paragraph (h) to read as
follows:
Sec. 101.4 Food; designation of ingredients.
* * * * *
(h) The common or usual name of a botanical ingredient (including
fungi and algae) listed on the label of a dietary supplement must be
consistent with the ``standardized common name'' listed in Herbs of
Commerce, 2nd Edition (2000) for the plant from which the ingredient is
derived. The use of the term ``ginseng'' as a common or usual name (or
part thereof) for any dietary supplement or dietary ingredient is
limited to those that are derived from a plant classified within the
genus ``Panax.'' Herbs of Commerce, 2nd Edition (2000) is incorporated
by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.
Copies of this book may be obtained from the American Herbal Products
Association, 8484 Georgia Ave., suite 370, Silver Spring, MD 20910,
301-588-1171, FAX: 301-588-1174, e-mail: [email protected]. Copies also may
be examined at the Center for Food Safety and Applied Nutrition's
Library, 5100 Paint Branch Pkwy., College Park, MD, or at the Office of
the Federal Register, 800 North Capitol St. NW., suite 700, Washington,
DC.
(1) The listing of the common or usual name on the label must be
followed by statements of:
(i) The part of the plant (e.g., root, leaves) from which the
dietary ingredient is derived (e.g., ``Garlic bulb'' or ``Garlic
(bulb)''), except that this designation is not required for algae. The
name of the part of the plant must be expressed in English (e.g.,
``flower'' rather than ``flos''); and
(ii) The Latin binomial name (i.e., genus and species) of the plant
from which the botanical ingredient is derived, stated in parentheses,
when no ``standardized common name'' for the plant is listed in Herbs
of Commerce, 2nd Edition (2000). In such cases, this Latin binomial
name may be listed before the part of the plant and must be stated in
accordance with the internationally accepted rules on botanical
nomenclature found in the International Code of Botanical Nomenclature
(Saint Louis Code) 2000. When needed to positively identify the
botanical ingredient, the Latin binomial name also must include the
author citation (i.e., name(s) of the person(s) who described and
published the Latin binomial name in accordance with the
internationally accepted rules on botanical nomenclature found in the
International Code of Botanical Nomenclature (Saint Louis Code) 2000).
The International Code of Botanical Nomenclature (Saint Louis Code)
2000, a publication of the International Association for Plant
Taxonomy, is incorporated by reference in accordance with 5 U.S.C.
552(a) and 1 CFR part 51. Copies of this book may be obtained from
Koeltz Scientific Books, D-61453 K[ouml]nigstein, Germany; University
Bookstore, Southern Illinois University, Carbondale, IL 62901-4422,
618-536-3321, FAX: 618-453-5207, e-mail: [email protected]; and from
Lubrecht & Cramer, 18 East Main St., Port Jervis, NY 12771, 800-920-
9334, FAX: 800-920-9334, e-mail: [email protected]. Copies also
may be examined at the Center for Food Safety and Applied Nutrition's
Library, 5100 Paint Branch Pkwy., College Park, MD, or at the Office of
the Federal Register, 800 North Capitol St. NW., suite 700, Washington,
DC.
(2) On labels of single-ingredient dietary supplements that do not
include an ingredient list, the identification of the Latin binomial
name, when needed, and the part of the plant may be prominently placed
on the principal display panel or information panel, or included in the
nutrition label.
Dated: August 14, 2003.
William K. Hubbard,
Associate Commissioner for Policy and Planning.
[FR Doc. 03-21980 Filed 8-27-03; 8:45 am]
BILLING CODE 4160-01-S