Characteristics of the variance component for the subject-by-formulation interaction (sigma(2)(D)), estimated in simulated studies of individual bioequivalence and in three- and four-period cross-over trials reported by the FDA, were compared. sigma(2)(D) was estimated by (i) restricted maximum likelihood (REML) and (ii) the method of moments (MM). Variation of the variance component, estimated by both procedures (s(2)(D)) and for both the simulated and FDA data, increased with rising intra-individual variation. Consequently, a constant level of s(2)(D) (such as 0.0225 suggested by the FDA) may not be regarded as a basis for demonstrating substantial interactions. Features of the FDA and simulated parameters were similar. The results suggested that the FDA data were compatible with assuming sigma(D)=0.05 or perhaps 0.00. Therefore, there is no foundation for concerns about public health. Both simulations and calculations demonstrated that s(2)(D) estimated by MM was unbiased and its variance was proportional to sigma(4)(WF) when sigma(2)(D)=0.