by Joel E. Hoffman ¹

Background

As new procedural requirements imposed by Congress and the courts have made notice-and-comment rulemaking increasingly complex and resource-intensive, many agencies have responded by increasingly resorting to other, less formal methods for announcing regulatory norms and expectations. At the Food and Drug Administration, these "nonlegislative" rules are known as "guidance documents."

The practical importance of such "guidance documents" is undeniable; they enable regulated entities to know, in considerable detail, what FDA expects and will demand in a broad variety of contexts, ranging from acceptable levels of harmless but unappetizing filth in food, to acceptable levels of unavoidable carcinogenic environmental contaminants in food, to the appropriate design of clinical studies to be submitted to the agency in support of applications for approval of new drugs or medical devices. It is vital to the regulated industries, therefore, that they be able to rely on guidance documents in the conduct of their businesses, secure in the knowledge that if they do comply with FDA's guidance, however onerous or arbitrary, at least they will be deemed by the agency to have satisfied applicable legal requirements.

The important role played by nonlegislative rules such as agency policy statements and interpretive rules, and the consequent desirability of public participation in their formulation, has been a continuing concern of administrative lawyers. The issue was addressed long ago by the now-defunct Administrative Conference of the United States in its Recommendation 76-5, urging agencies to utilize notice-and-comment procedures for policy statements and interpretive rules that have a "substantial impact" on the public and to provide for post-promulgation comments even when that test is not met. In 1993 the ABA, on the initiative of the Section of Administrative Law and Regulatory Practice, adopted a similar resolution.

The process for developing guidance documents has long been a point of contention between FDA and the industries it regulates. Regulated entities traditionally have sought to maximize their opportunity for input into guidance document formulation. FDA traditionally has resisted such calls to provide rulemaking-type opportunities for public participation in the development of guidance documents, on the grounds that as nonlegislative rules they do not require compliance with notice-and-comment procedure and that employing such procedures voluntarily would take up too many scarce agency resources and unnecessarily slow down the promulgation of the guidance documents.

For twenty years, however, FDA's general procedural regulations have ensured the public's right to rely on broad categories of guidance documents notwithstanding that they do not constitute, and are not promulgated as, legislative rules. The regulations state that even though compliance by the public is not mandatory, such guidance will be binding on the agency until amended or revoked, and that persons may rely on it with assurance that their actions will be acceptable to FDA.

The CNI Case and Its Aftermath

In 1987, the D.C. Circuit ruled in Community Nutrition Institute v. Young, 818 F.2d 943, that FDA's action levels for aflatoxin (a carcinogenic environmental contaminant) in corn, adopted as policy statements, were legislative rules, requiring notice-and-comment rulemaking, because FDA had bound itself not to bring enforcement proceedings where the action level was not exceeded. FDA's response to the CNI decision forcefully illustrates the potential for mischief in making public participation in nonlegislative rulemaking a prerequisite to making such rules binding on the promulgating agency.

Deeming itself obligated by CNI to choose between following notice-and-comment procedure in promulgating action levels for environmental contaminants and disclaiming any intention to be bound by them, FDA opted for the latter. Five years later, the agency proposed to extend the new policy to guidance documents generally, by deleting the contrary provisions from its general procedural regulations.

The Section of Administrative Law and Regulatory Practice submitted comments to the FDA opposing the proposed amendments as unnecessary and unwise. The proposal has never been officially acted upon, but subsequently issued guidance documents have included a boilerplate disclaimer of any binding effect, on FDA as well as on the public, and a caution that no one should assume that the agency will be obliged to respect them.

FDA Reform and Reinvention

With the advent of the 104th Congress in 1994, FDA became a priority target for legislative reform efforts. The agency responded with a variety of self-examination and self-reform proposals, some formally a part of the Administration's Reinventing Government initiative and some not. One such undertaking is a review and overhaul of FDA's guidance process, in which the agency proposes to develop and adhere to "Good Guidance Practices" (presumably by analogy to the Good Manufacturing Practices, Good Laboratory Practices, and Good Clinical Practices that regulated entities are expected to follow).

FDA's "Good Guidance Practices" proposal was published in the Federal Register in March 1996. The notice outlines a new scheme for regularizing and obtaining public input into guidance development and soliciting comments and suggestions. Publication of the notice was followed by a public meeting, also announced in the Federal Register, at which oral presentations by interested persons, companies, and organizations were heard.

FDA's "Good Guidance Practices" Proposal

The March 1996 FDA proposal contemplates a three-tier system. Tier I guidance would be reserved for significant changes of agency position, novel or controversial approaches to a problem, and complex issues. Public comment on proposed Tier I guidance documents will be solicited prior to promulgation.

Tier II guidance, under FDA's proposal, either restates the agency's current practice or makes nonsignificant or noncontroversial changes. FDA proposes to accompany Tier II guidance documents with a solicitation of post-promulgation comments.

Tier III guidance would consist of internal staff directives with limited effect on the public. Neither pre- nor post-promulgation comments would specifically be solicited for Tier III guidance documents, although spontaneously submitted comments would be accepted. Notice of the availability of Tier III guidance documents would be given through periodically published lists.

A noteworthy characteristic of FDA's "Good Guidance Practices" proposal is its limited reliance on the Federal Register as a medium of communication with the public. According to FDA, "[i]t is inefficient to issue a separate Federal Register document for each guidance. Such an approach has profound resource implications and would likely result in a backlog." Instead, the agency proposes to emphasize electronic media -- the Internet, systems for providing automated facsimile responses to requests for copies of proposed and promulgated guidance documents, and computer dial-in systems.

FDA also took this occasion to respond directly to the Administrative Conference's recommendation of pre-promulgation notice-and-comment procedures for nonlegislative rules having a "substantial impact" and post-promulgation comments for all others. The agency firmly rejected the ACUS recommendation, giving three reasons: the "substantial impact" test has been rejected by the courts as a measure of what the Administrative Procedure Act requires, its use would invite litigation, and a requirement that FDA respond to post-promulgation comments in all cases would impose too great a burden on the agency. Finally, reiterating its long-pending proposal to disclaim any "binding effect" for nonlegislative rules such as guidance documents, FDA implied an intention to stand firm on that issue.

The Public Response

Commenters on the FDA proposal all applauded the agency's effort to set criteria and procedures for its development of nonlegislative guidance. Beyond that, however, those speaking for regulated entities were highly critical.

It was suggested that the proposal reserves too much discretion to FDA in deciding when public input on proposed guidance should be solicited; that the criteria proposed by FDA are too vague and too grudging; and that the proposal pays insufficient attention to the need for monitoring and control mechanisms to ensure that "Good Guidance Practices" are followed by agency personnel on a continuing basis. Another important criticism was that the proposal overlooks the need for public input on FDA's establishment of priorities in selecting the issues on which guidance will be developed, inasmuch as FDA and the entities it regulates, not to mention the general public, may have different views on where guidance is most needed.

Status of the Proposal

In July 1996, FDA predicted that "Good Guidance Practices" would be promulgated by early Autumn. In early Autumn, the target date was announced to be year-end. As of mid-February 1997, nothing has emerged, but the FDA has indicated that action is imminent, so by the time this article is published, the final document should have been issued.

Meanwhile, FDA unquestionably has expanded its outreach activities in developing policy on a wide range of substantive issues, conducting regional "grass-roots partnership" conferences with regulated entities and broadly-attended public meetings on such topics as whether and how to regulate promotion on the Internet. But it remains to be seen whether the agency's laudable efforts in this direction will result in significant amelioration of the core problems -- inadequate public participation and uncertain reliability of nonlegislative rulemaking.

1. Joel E. Hoffman is a partner in Sutherland, Asbill & Brennan, L.L.P., Washington, D.C., where he practices food and drug law. This article was first presented as one of the Section's "mini-minders" at the Section meeting in San Antonio.