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Statement of Need: Section 417 of the Food and Drug Modernization Act (PL 105-115) requires any establishment in any foreign country that is engaged in the manufacture, preparation propagation, compounding, or processing of a drug or device that is imported or offered for import into the United States to register the name and place of business of the establishment and to identify a United States agent. The final rule implements the statutory requirement by amending the establishment registration and listing regulations for human drugs and biological products (21 CFR part 207), blood and blood products (21 CFR part 607), and devices (21 CFR part 807). The final rule also discusses the duties of the United States agent. The United States agent's duties, under the final rule, include facilitating communications with the foreign establishment and responding to inquiries about the foreign establishment's products that are imported or offered for import into the United States. The final rule will strengthen FDA?s procedures for ensuring that products imported or offered for import into the United States are safe and effective.

Summary of the Legal Basis: The principal legal basis can be summarized as follows. Section 510 of the Federal Food, Drug, and Cosmetic Act (the Act) requires establishment registration and listing. Section 417 of the Food and Drug Modernization Act amended section 510 by requiring foreign establishments to register, to list their products, and to identify a United States agent. Section 701(a) of the Act gives FDA authority to promulgate regulations for the efficient enforcement of the Act. Thus, the final rule represents FDA's effort to enforce section 510 of the Act, as amended by section 417 of the Food and Drug Modernization Act.

Alternatives: FDA considered requiring less establishment registration information, but the information required by the rule is quite minimal, consisting largely of the establishment's address, names of owners or responsible officials, and additional identifying information (such as the type of establishment). An alternative that would have required less information would not give FDA sufficient information to identify a foreign establishment's location, type, or responsible persons, and this would complicate efforts to locate or contact the foreign establishment. FDA also rejected requiring less frequent registration by foreign establishments because this would increase the likelihood that the information would become incorrect or obsolete and would hinder regulatory actions involving foreign establishments. FDA also considered comments seeking an exemption from the United States agent requirement or to allow the United States agent to be in a foreign country. However, the statute requires foreign establishments to have a United States agent, and the most logical interpretation of the statute is that the United States agent must be in the United States rather than in a foreign country. FDA did state that the United States agent may be an entity or a person.

Anticipated Costs and Benefits: FDA examined the potential costs and benefits associated with foreign establishment registration. Given its experience with establishment registration for domestic firms, FDA estimates the total registration costs for foreign establishments to be $809,820. Recordkeeping costs are estimated at $810,000. The rule's principal benefit would be the creation of an accurate, comprehensive list of foreign establishments. This list will make it easier for FDA to identify foreign establishments, schedule inspections, and contact foreign establishments when needed. The United States agent is another benefit as the United States agent will help FDA in communications with the foreign establishment, respond to questions regarding the foreign establishment's products that are imported or offered for import into the United States, and help schedule inspections of the foreign establishment.

Risks: Before the enactment of the Food and Drug Modernization Act, Federal law required domestic establishments to register with FDA and to list their products. Foreign manufacturers could register their establishments voluntarily, but were required to list their products. The different treatment between domestic and foreign establishments created some confusion among foreign establishments. Some foreign establishments erroneously believed that listing was voluntary; others neither registered their establishments nor listed their products. Establishment registration enables FDA to identify manufacturers and other FDA-regulated entities for inspection, communication, and other administrative or regulatory action. For example, if a foreign product presented a health or safety concern, FDA would contact the foreign manufacturer, but if the foreign establishment was not registered, the agency might find it difficult to contact the foreign manufacturer promptly or to contact the manufacturer at all. Requiring foreign establishments to register will facilitate FDA's regulatory and enforcement actions and treat domestic and foreign establishments alike. Moreover, the regulation implements section 417 of the Food and Drug Modernization Act.