[Federal Register: November 25, 2003 (Volume 68, Number 227)]
[Proposed Rules]
[Page 66052-66059]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25no03-17]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Parts 1309, 1310
[Docket No. DEA-189P]
RIN 1117-AA67
Chemical Registration Waivers; Exemption From Chemical
Registration Fees for Certain Persons
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Notice of proposed rulemaking.
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SUMMARY: DEA is proposing amending its regulations to waive the
requirement of registration for contract processors, medical/first aid
kit providers, distributors of sample packages of drug products, and
distributors of research/reference standards pursuant to 21 U.S.C.
822(d). These actions are being taken in response to industry comments
and suggestions. DEA has determined that requiring registration for
these activities is not necessary for effective enforcement under the
Controlled Substances Act (CSA), and waiving the requirement of
registration will ease regulatory burdens for the affected industries.
DEA is also proposing exempting charitable organizations and
governmental entities from initial and renewal registration fees. These
fee exemptions will bring the chemical regulations into conformance
with the controlled substances regulations (21 CFR 1301.21).
DATES: Written comments must be postmarked on or before January 26,
2004.
ADDRESSES: Comments should be submitted to the Deputy Assistant
Administrator, Office of Diversion Control, Drug Enforcement
Administration, Washington, DC 20537, Attention: DEA Federal Register
Representative/CCR.
FOR FURTHER INFORMATION CONTACT: Patricia M. Good, Chief, Liaison and
Policy Section, Office of Diversion Control, Drug Enforcement
Administration, Washington, DC 20537, Telephone (202) 307-7297.
Supplementary Information:
Special Notice
Due to concerns regarding possible harmful side effects, the Food
and Drug Administration (FDA) initiated action in November, 2000, to
remove phenylpropanolamine from the market. As a result, many firms
voluntarily discontinued marketing products containing
phenylpropanolamine and removed them from the shelves for disposal.
However, since some products containing phenylpropanolamine are still
available, DEA has written these proposed regulations to include drug
products containing phenylpropanolamine, where appropriate, as well as
drug products containing pseudoephedrine.
I. Background
What Legislation Permits DEA to Regulate the Chemicals Industry, and
What Laws Allow DEA To Waive Registration Requirements?
The Domestic Chemical Diversion Control Act of 1993 (DCDCA)
established that persons distributing, importing, or exporting List I
chemicals must register with DEA. In addition, it removed the exemption
of single-entity ephedrine drug products from the chemical regulations.
The Comprehensive Methamphetamine Control Act of 1996 (MCA) expanded on
the registration requirement of the DCDCA by removing the exemption for
pseudoephedrine, phenylpropanolamine and combination ephedrine drug
products. Persons distributing, importing or exporting these drug
products must register with DEA (21 U.S.C. 822, 957).
The registration requirement is not absolute. Section 302(c) of the
CSA (21 U.S.C. 822(c)) provides that certain persons, including common
or contract carriers and warehousemen, are not subject to the
registration requirement. Further, section 302(d) of the CSA (21 U.S.C.
822(d)) provides that the Attorney General may waive the registration
requirement for certain persons if it is consistent with the public
health and safety.
As DEA has worked to implement the DCDCA and MCA, a number of
issues have been raised regarding waiving the requirement of
registration for persons engaged in certain activities under the
regulations. In some cases there are parallels between identified
activities and activities previously exempted from the registration
requirement. DEA has reviewed the requests received from industry and
has determined that the requirement of registration is not necessary
for contract processors, medical/first aid kit providers, distributors
of sample packages, and distributors of research/reference standards as
discussed below. Further, DEA has determined that charitable
organizations and governmental entities should be exempted from payment
of the application fee for registration and reregistration, but that
the requirement of registration itself must remain in effect for
effective diversion control. These proposed fee exemptions are also
discussed below.
How Will These Proposed Waivers and Exemptions Benefit the Regulated
Industry?
Current DEA regulations require that any person who manufactures,
distributes, imports, or exports a List I chemical must first register
with DEA annually as a List I chemicals handler and pay a registration
fee. DEA has recognized that, for certain industries, registration is
unnecessary for effective enforcement of the law, and has accommodated
the waiver of registration through Memoranda of Understanding (MOUs)
between DEA and affected persons. In this rulemaking, DEA is proposing
to waive the requirement of registration for contract processors,
medical/first aid kit providers, distributors of sample packages, and
distributors of research/reference standards. Were DEA not to propose
these regulations, thereby codifying present Administration policy,
each affected person would be required to register with DEA annually
and pay an initial registration fee of $595 and annual reregistration
fees of $477. If finalized, these proposed regulations will require
exempt persons to notify DEA only once of their activities, at a cost
of mailing one letter, as opposed to an annual registration fee.
Industry would benefit from a significant cost savings as no fee would
be charged for the one-time notification. Further, in this rulemaking
DEA is proposing to exempt charitable organizations and governmental
entities from payment of the application fee for registration and
reregistration as List I chemical handlers. These exemptions will
reduce regulatory requirements for the applicable industry, creating a
cost savings for affected persons.
What Chemicals Would Be Affected by These Proposed Regulations?
The proposed waiver of the requirement of registration or
reregistration for contract processors will affect all List I
chemicals. List I chemicals have legitimate uses within commercial
industry, being used for research and manufacturing purposes. List I
chemicals include, but are not
[[Page 66053]]
limited to, ephedrine, pseudoephedrine and phenylpropanolamine (used in
the manufacture of pharmaceutical products), benzaldehyde (used in the
manufacture of perfumes and dyes), hydriodic acid (a disinfectant and
chemical reagent), nitroethane (a solvent), and white phosphorus (used
in the production of other phosphoric compounds). As a rule, with the
exception of pseudoephedrine, phenylpropanolamine, and ephedrine, which
are distributed to the public in regulated form as over-the-counter
medications, List I chemicals in regulated form are usually distributed
in commercial transactions between businesses and only rarely to the
public in retail transactions. It is within this commercial arena that
contract processors operate; they do not distribute at retail to the
public.
The proposed waiver of the requirement of registration or
reregistration for distributors of research/reference standards would
affect the List I chemicals ephedrine, pseudoephedrine and
phenylpropanolamine. The proposed waiver of the requirement of
registration or reregistration for medical/first aid kit providers and
distributors of sample packages would affect the List I chemical
pseudoephedrine. Pseudoephedrine, a chemical widely used in over-the-
counter medications, is a decongestant used for the temporary relief of
nasal congestion due to the common cold, hay fever or other upper
respiratory allergies. Products containing pseudoephedrine are widely
available in a variety of dosage forms as a single entity or in
combination with antihistamines, antitussives, analgesics,
expectorants, and/or vitamins. Ephedrine is used for the temporary
relief of shortness of breath, tightness of chest, and wheezing due to
bronchial asthma.
The majority of the products purchased by the public containing
pseudoephedrine are commonly used medications and are easily accessible
at pharmacies, grocery stores, discounted department stores, and a
variety of other retail stores. These products are available to the
public without a prescription. A few products containing
pseudoephedrine or ephedrine are prescription products and require a
prescription issued by a practitioner prior to being dispensed to a
patient. This proposed regulation will not adversely impact the
public's ability to easily access these products.
II. Waivers of the Requirement of Registration
A. Contract Processors
What Are Contract Processors?
Contract processors, sometimes referred to within the industry as
``tollers'', are those persons who, through a legally binding agreement
with a registrant, take physical possession of a listed chemical for
the purpose of providing a processing service to the registrant. Such
processes may include, but are not limited to, packaging a product and
adding chemicals to a mixture. The contract processor never has legal
ownership or control of the chemicals; legal title remains with the
registrant. Following processing, the contract processor either returns
all of the chemicals received to the registrant, or distributes them as
required by the registrant.
Why Is DEA Waiving the Requirement of Registration for Contract
Processors?
In reviewing this situation, DEA has noted that activities of
certain contract processors parallel those of a warehouse at which
chemicals are stored, for which an exemption from registration has been
provided under 21 U.S.C. 822(c) (21 CFR 1309.23(b)(1)). As with the
warehouseman, the contract processor merely carries out the processing
requirements of the registrant; the contract processor does not have,
at any time, legal title to or legal control of the chemicals. The
registrant provides the material to the contract processor for a
specific function, after which the material is returned to the
registrant, thus maintaining a closed-loop system. DEA has determined
that, under such circumstances, the requirement of registration is not
necessary for effective chemical control. Therefore, DEA is proposing
to amend the regulations to waive the requirement of registration for
contract processors provided that chemicals are distributed only back
to the registrant. As with warehousemen, a registrant utilizing a
contract processor's services would be responsible for exercising due
care in selection of the processor (21 CFR 1309.71, 21 CFR 1309.72).
The registrant would have to ensure that the contract processor has in
place appropriate procedures and safeguards to protect chemicals from
diversion.
What Circumstances Are Not Permitted Under This Waiver?
Contract processors do not always operate within a closed-loop
system. In some cases, a contract processor may receive chemicals from
an outside source, process them, and distribute the chemicals to the
registrant. In other cases, a registrant may provide the chemicals to
the contract processor which processes them and, per the registrant's
instructions, distributes the chemicals to other persons. These
activities deviate from the closed-loop system between the registrant
and contract processor and involve distributions to or from other
registrants. Therefore, these types of activities will remain subject
to the registration requirements under the law. DEA is proposing that,
as with the existing provisions for warehouses, the waiver will apply
only to those circumstances in which a registrant distributes directly
to a contract processor which, in turn, will distribute only back to
the registrant from which it received the chemicals.
B. Medical/First Aid Kit Providers
What Are Medical/First Aid Kit Providers?
Medical/first aid kit providers distribute small amounts of
pseudoephedrine drug products, in individual transactions, to medical/
first aid kits maintained by businesses for the personal medical use of
employees in the workplace. The distributions are usually conducted in
face-to-face transactions (an agent or employee of the distributor
delivers the products directly to the customer), the products are
distributed for the personal medical use of the employees of the
customer, and are less than the retail threshold per transaction. [As
used in this document and referenced in the Methamphetamine Anti-
Proliferation Act of 2000 (Section XXXVI of Pub.L. 106-310), the term
``transaction'' is defined to mean the provision of regulated drug
products to a specific location, not the provision of regulated drug
products to a specific medical/first aid kit within a location. Thus,
under the terms of this proposed waiver, if a location had multiple
medical/first aid kits, the medical/first aid kit provider would be
permitted to supply the location with a quantity of product below the
retail per-transaction limit during each visit to that specific
location. Product may be allocated to multiple medical/first aid kits
throughout a specific location, without the medical/first aid kit
provider being required to register with DEA, so long as the amount of
product distributed does not exceed the retail per-transaction
threshold.]
[[Page 66054]]
Why is DEA Waiving the Requirement of Registration for Medical/First
Aid Kit Providers?
Medical/first aid kit provider activities closely parallel those of
retail distributors; sales involve retail below-threshold amounts of
the products, are made in face-to-face transactions, and are intended
for the personal medical use of the employees of the business. DEA has
determined that, where a medical/first aid provider's activities are
restricted to retail below-threshold, face-to-face transactions to
supply/replenish medical or first aid kits maintained for the personal
medical use of employees in the workplace, application of the
registration requirement is not necessary for effective enforcement of
the chemical control program. Instead, the providers must submit
written notice to DEA certifying that their activities will be limited
to distribution of retail below-threshold quantities of a drug product
containing pseudoephedrine that is regulated pursuant to Sec.
1300.02(b)(28)(i)(D) for purposes of supplying/replenishing medical or
first aid kits maintained by businesses for the use of their employees.
(A model of the notice to be used may be found in proposed 1309.24(i).)
Notice must be provided on official company letterhead to the Drug
Enforcement Administration, Chemical Control Section, Washington, D.C.
20537.
Those medical/first aid kit providers currently operating pursuant
to Memoranda of Understanding (MOU) with DEA will be required to
request a waiver of the requirement of registration once the Final Rule
implementing these regulations is published in the Federal Register.
Although medical/first aid kit providers conduct individual
transactions in retail below-threshold quantities, they may store large
quantities of drug products containing list I chemicals that are
regulated pursuant to Sec. 1300.02(b)(28)(i)(D) at any one time.
Because of this, the issue of theft or loss of these drug products is
of concern to DEA. It is extremely important that persons supplying/
replenishing medical or first aid kits maintained by businesses for the
use of their employees take adequate and appropriate measures to ensure
the security of these drug products in their possession (21 CFR
1309.71-1309.73). Persons receiving a waiver of the requirement of
registration should pay special attention to the storage and security
of the regulated drug products. Further, waiver of the registration
requirement does not obviate the need for complete and accurate
recordkeeping and reporting to DEA (21 CFR 1310, 1313). The waiver of
the requirement of registration may be revoked or suspended under the
terms discussed in Section II.E. of this preamble and the proposed
regulations.
C. Distributors of Sample Packages of Drug Products
What Are Sample Packages, and When May the Requirement of Registration
Be Waived for Distributions of Sample Packages?
It is not unusual for manufacturers of drug products containing
retail below-threshold amounts of pseudoephedrine that are regulated
pursuant to Sec. 1300.02(b)(28)(i)(D) to distribute free samples of
their products directly to the public as part of marketing campaigns.
The samples may be distributed through mass distributions in
newspapers, magazines, or through the mail. A sample package contains
not more than two solid dosage units of the product, or the equivalent
of two dosage units in liquid form, not to exceed 10 milliliters of
liquid per package. DEA has determined that application of the specific
registration requirement is not necessary for effective enforcement of
chemical controls, provided that the sampler does not distribute more
than one sample package of a drug product containing retail below-
threshold amounts of pseudoephedrine that is regulated pursuant to
Sec. 1300.02(b)(28)(i)(D) to an individual or residential address in
any 30-day time period. Instead, DEA will require that the sampler must
submit written notice to DEA certifying that their activities will be
limited to individual distributions of sample packages containing not
more than two solid dosage units of the product, or the equivalent of
two dosage units in liquid form, not to exceed 10 milliliters of liquid
per package, and that distributions will not exceed one per individual
or residential address per 30-day time period. Notice must be provided
on official company letterhead to the local field office of the Drug
Enforcement Administration. Contact information for local DEA field
offices may be obtained from the Drug Enforcement Administration Web
site at http://www.dea.gov. Once notification has been received, the
local field office will provide instruction on handling the product.
Those persons distributing sample packages currently operating
pursuant to Memoranda of Understanding (MOU) with DEA will be required
to request a waiver of the requirement of registration once the final
rule implementing these regulations is published in the Federal
Register.
Although distributors of sample packages may distribute only one
sample package to an individual or residential address in a 30-day time
period, they may store very large quantities of regulated drug
products. The issue of theft or loss of these drug products is of
concern to DEA. It is extremely important that persons making
distributions of these sample packages take adequate and appropriate
measures to ensure the security of these drug products in their
possession (21 CFR 1309.71-1309.73). Persons receiving a waiver of the
requirement of registration should pay special attention to the storage
and security of the sample packages. Further, waiver of the requirement
of registration does not obviate the need for accurate recordkeeping
and reporting to DEA (21 CFR 1310, 1313). The waiver of the requirement
of registration may be revoked or suspended under the terms discussed
in Section II.E. of this preamble and the proposed regulations.
D. Distribution of Research/Reference Standards
What Are Distributions of Research/Reference Standards, and When May
the Requirement of Registration Be Waived for These Distributions?
DEA registered manufacturers of regulated drug products sometimes
maintain separate locations at which ephedrine, pseudoephedrine, and
phenylpropanolamine research/reference standards are manufactured and
distributed to other locations operated by the registrant for use in
manufacturing processes. DEA has determined that requiring registration
for such distributions is not necessary for effective enforcement of
the chemical control program provided that the distributions are less
than five (5) grams per transaction, not to exceed fifty (50) grams
cumulatively per calendar month, and are made solely between locations
operated by the same regulated person. The small amounts of material
involved and the closed system within which the material is distributed
do not present significant potential for diversion. Further, because
these samples are used for research purposes, the controls surrounding
these chemicals, as well as their chain of custody, are very strict.
These added safeguards lessen the potential for diversion. Therefore,
DEA is proposing the amendment of 21 CFR 1309.24 to waive the
requirement of registration for the distribution of research/reference
standards. The waiver of the
[[Page 66055]]
requirement of registration may be revoked or suspended under the terms
discussed in Section II.E. of this preamble and the proposed
regulations.
E. Waiver Revocations and Suspensions
Any waiver granted to any medical/first aid kit provider,
distributor of sample packages, or distributor of research/reference
standards under the provisions of this Notice of Proposed Rulemaking
may be revoked or suspended. If the Administrator of DEA finds that
continuation of the waiver of the requirement of registration for any
person granted a waiver pursuant to these regulations would not be in
the public interest, or would be subject to suspension or revocation
pursuant to any other ground under Section 304 of the Act (21 U.S.C.
824), the Administrator shall serve upon the person an order to show
cause why the waiver of registration should not be revoked or suspended
as set forth in 21 CFR 1309.46(b), and, if applicable, why any pending
applications for List I chemical registration should not be denied as
set forth in 21 CFR 1309.46(a).
III. Fee Exemptions
A. Charitable Organizations
It is not unusual for charitable organizations to receive donations
of drug products containing a List I chemical that are regulated
pursuant to Sec. 1300.02(b)(28)(i)(D) as part of their normal course
of business. These donations may be received from a variety of sources
including retail distributors, wholesale distributors and
manufacturers. The charitable organizations distribute the products
either directly to the ultimate users or to other foreign or domestic
charitable organizations.
For purposes of these proposed regulations, DEA is defining a
charitable organization as one meeting the requirements of the Internal
Revenue Service Code (26 U.S.C. 501(c)(3)). When seeking an exemption
from payment of application fees for registration or reregistration,
such charitable organizations must present to DEA, along with their
application for registration or reregistration, a copy of their advance
determination letter or determination letter issued by the Internal
Revenue Service as proof of their tax-exempt status under the
provisions of 26 U.S.C. 508 and its implementing regulations.
Distributions made by charitable organizations directly to ultimate
users are retail distributions; products are distributed in face-to-
face transactions for personal medical use, and involve below-threshold
amounts of listed chemicals. As retail transactions, they are not
subject to the registration requirement.
However, distributions to other charitable organizations, whether
domestic distribution or exportation, are subject to the registration
requirement. Because the volume of drug products containing a List I
chemical that are regulated pursuant to Sec. 1300.02(b)(28)(i)(D)
being distributed by these organizations can be significant,
registration with DEA remains necessary, as well as the recordkeeping
and reporting requirements. However, it is not DEA's intent that these
organizations be financially penalized for their activities. Therefore,
DEA is proposing amendments to the regulations exempting charitable
organizations from registration fees.
B. Federal, State, and Local Agencies
It has been general practice and tradition that DEA does not assess
other governmental entities--Federal, state or local--the fees required
for registration or reregistration. This provision, which does exist
for controlled substances registrants, was inadvertently not included
in the chemical regulations. Therefore, to provide consistent
registration fee requirements, DEA is proposing the amendment of the
chemical regulations to exempt governmental entities from fees.
IV. Clarification of the Waiver of the Requirement of Registration for
Certain Controlled Substances Registrants
Title 21 CFR 1309.24 provides that persons registered with DEA to
distribute or dispense controlled substances are not required to obtain
a separate chemical registration to distribute drug products containing
a List I chemical that are regulated pursuant to Sec.
1300.02(b)(28)(i)(D).
This provision is intended to allow controlled substances
manufacturers, distributors, and dispensers to engage in activities
with regulated drug products that are similar or equivalent to their
activities with controlled substances, i.e., manufacturers and
distributors may engage in wholesale transactions and dispensers, such
as retail pharmacies, may engage in retail transactions.
However, DEA has become aware of instances in which controlled
substances dispensers, in particular retail pharmacies, have been
engaging in listed chemical activities inconsistent with their
controlled substances activities. DEA intended that the waiver for
dispensers would apply to retail type transactions, i.e., distributions
of below-threshold amounts to individual customers for personal medical
use, and not to distributions of above-threshold quantities or
distributions not intended for the personal medical use of the
customer. For example, a retail pharmacy may distribute retail
quantities of drug products containing a List I chemical that are
regulated pursuant to 21 CFR 1300.02(b)(28) under the chemical
registration waiver, but must obtain a separate chemical registration
for distributions above the retail threshold or distributions not
intended for the personal medical use of the customer. Similarly, a
controlled substances distributor would be exempt from obtaining a
registration for distributing, but not manufacturing, regulated drug
products. It was not DEA's intent to permit controlled substances
registrants to use the waiver of the requirement of chemical
registration to conduct activities inconsistent with their controlled
substances activities. Therefore, DEA proposes to amend its regulations
to clarify that controlled substances manufacturers, distributors, and
dispensers may conduct similar or equivalent activities involving drug
products containing a List I chemical that are regulated pursuant to
Sec. 1300.02(b)(28)(i)(D) without having to obtain a chemical
registration.
V. Technical Corrections
What Technical Corrections Are Proposed in This Rulemaking?
While preparing this notice, DEA noted inaccurate citations for the
definition of ``regulated transaction'' in 21 CFR Part 1310. Therefore,
DEA is proposing the correction of these inaccurate citations.
Further, it was noted that Sections 1310.14 and 1310.15 have been
superceded by the Comprehensive Methamphetamine Control Act of 1996
(MCA) which regulates all products containing ephedrine, whether single
entity or combination ephedrine. Therefore, DEA is proposing the
removal of Sections 1310.14 and 1310.15.
VI. Office of Management and Budget Information Collection Requirements
DEA is proposing two new collections of information: Report of
Medical/First Aid Kit Provider Business Activities and Report of
Distribution of Sample Packages under the Paperwork Reduction Act of
1995. This process is conducted in accordance with 5 CFR 1320.11.
These proposed information collections are published to obtain
[[Page 66056]]
comments from the public and affected agencies. Comments are encouraged
and will be accepted until January 26, 2004. Written comments and
suggestions are requested from the public and affected agencies
concerning the proposed collections of information.
Comments should address one or more of the following four points:
1. Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information, including the validity of the
methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to
be collected; and
4. Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
If you have comments, especially on the estimated public burden or
associated response time, suggestions, or need a copy of the proposed
information collection instrument(s) with instructions, if applicable,
or additional information, please contact Patricia M. Good, Chief,
Liaison and Policy Section, Office of Diversion Control, Drug
Enforcement Administration, Washington, DC 20537, Telephone (202) 307-
7297.
Overview of Report of Medical/First Aid Kit Provider Business
Activities Information Collection:
(1) Type of information collection: new collection.
(2) The title of the form/collection: Report of Medical/First Aid
Kit Provider Business Activities.
(3) The agency form number, if any, and the applicable component of
the Department sponsoring the collection:
Form No.: None.
Applicable component of the Department sponsoring the collection:
Office of Diversion Control, Drug Enforcement Administration, U.S.
Department of Justice.
(4) Affected public who will be asked or required to respond, as
well as a brief abstract:
Primary: Business or other for-profit.
Other: None.
Abstract: The collection of this information is necessary to
maintain appropriate oversight of the distribution of regulated drug
products containing List I chemicals by requiring notification from
businesses of their intent to distribute retail subthreshold quantities
of pseudoephedrine drug products for the purpose of supplying/
replenishing medical/first aid kits.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond/reply: 600
Respondents. 600 responses per year x 1 hour per response = 600 hrs.
(6) An estimate of the total public burden (in hours) associated
with the collection: 600 annual burden hours. 600 respondents x 1 hour
per respondent per year.
Overview of Report of Distribution of Sample Packages Information
Collection:
(1) Type of information collection: new collection.
(2) The title of the form/collection: Report of Distribution of
Sample Packages.
(3) The agency form number, if any, and the applicable component of
the Department sponsoring the collection:
Form No.: None.
Applicable component of the Department sponsoring the collection:
Office of Diversion Control, Drug Enforcement Administration, U.S.
Department of Justice.
(4) Affected public who will be asked or required to respond, as
well as a brief abstract:
Primary: Business or other for-profit.
Other: None.
Abstract: The collection of this information is necessary to
maintain appropriate oversight of the distribution of regulated drug
products containing retail below-threshold amounts of pseudoephedrine.
By requiring notification from businesses of their intent to distribute
sample packages containing not more than two solid dosage units, or the
equivalent of two dosage units in liquid form, not to exceed 10
milliliters of liquid per package, to the general public. Distributions
are limited to not more than one package distributed to an individual
or residential address in any 30-day time period. Notice provides the
business name and address and acknowledges distribution restrictions,
compliance with the requirements of Title 21, Code of Federal
Regulations (CFR), part 1310, the reporting and recordkeeping
requirements, and the fact that exemption from the registration
requirement applies to this activity only.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond/reply:1,000
respondents. 1,000 responses per year x 1 hour per response = 1,000
hours.
(6) An estimate of the total public burden (in hours) associated
with the collection: 1,000 annual burden hours. 1,000 respondents x 1
hour per respondent per year.
If additional information is required regarding these collections
of information, contact: Brenda E. Dyer, Deputy Clearance Officer,
Policy and Planning Staff, Justice Management Division, United States
Department of Justice, Patrick Henry Building, Suite 1600, 601 D Street
NW., Washington, DC 20530.
Regulatory Certifications
Regulatory Flexibility Act
The Deputy Assistant Administrator hereby certifies that this
rulemaking has been drafted in accordance with the Regulatory
Flexibility Act (5 U.S.C. 605(b)), and by approving it certifies that
this regulation will not have a significant economic impact on a
substantial number of small business entities. These proposed
regulations would ease registrants', primarily small businesses,
regulatory burdens including waiving the requirement of registration
and exempting certain regulated persons from the imposition of
registration fees.
Executive Order 12866
The Deputy Assistant Administrator further certifies that this
rulemaking has been drafted in accordance with the principles in
Executive Order 12866, Section 1(b). DEA has determined that this is a
significant regulatory action. Therefore, this action has been reviewed
by the Office of Management and Budget. Further, the proposed
information collections, ``Report of Medical/First Aid Kit Provider
Business Activities'' and ``Report of Distributions of Sample
Packages'', have been submitted for review. This rulemaking eases the
regulatory burden for registrants by waiving the requirement of
registration for certain activities, as well as exempting certain
regulated persons from the registration fees. Were DEA not to propose
these regulations, thereby codifying present Administration policy,
each affected person would be required to register with DEA annually
and pay an initial registration fee of $595 and annual reregistration
fees of $477. If finalized, these proposed regulations will require
exempt persons to notify DEA only once of their activities, at a cost
of mailing one letter, as opposed to an annual registration fee.
Industry would benefit
[[Page 66057]]
from a significant cost savings as no fee would be charged for the one-
time notification.
Executive Order 12988
This regulation meets the applicable standards set forth in
Sections 3(a) and 3(b)(2) of Executive Order 12988.
Executive Order 13132
This rulemaking does not preempt or modify any provision of state
law; nor does it impose enforcement responsibilities on any state; nor
does it diminish the power of any state to enforce its own laws.
Accordingly, this rulemaking does not have federalism implications
warranting the application of Executive Order 13132.
Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by state, local, and
tribal governments, in the aggregate, or by the private sector, of
$100,000,000 or more in any one year, and will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995.
Small Business Regulatory Enforcement Fairness Act of 1996
This rule is not a major rule as defined by Section 804 of the
Small Business Regulatory Enforcement Fairness Act of 1996. This rule
will not result in an annual effect on the economy of $100,000,000 or
more; a major increase in costs or prices; or significant adverse
effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based companies to
compete with foreign-based companies in domestic and export markets.
List of Subjects
21 CFR Part 1309
Administrative practice and procedure, Drug traffic control, List I
and List II chemicals, Security measures.
21 CFR Part 1310
Drug traffic control, List I and List II chemicals, Reporting
requirements.
For the reasons set out above, 21 CFR parts 1309 and 1310 are
proposed to be amended as follows:
PART 1309--REGISTRATION OF MANUFACTURERS, DISTRIBUTORS, IMPORTERS
AND EXPORTERS OF LIST I CHEMICALS
1. The authority citation for part 1309 continues to read as
follows:
Authority: 21 U.S.C. 821, 822, 823, 824, 830, 871(b), 875, 877,
958.
2. Section 1309.13 is proposed to be added to read as follows:
Sec. 1309.13 Exemptions from fees.
(a) The Administrator shall exempt from payment of an application
fee for registration or reregistration any hospital or other
institution which is operated by an agency of the United States
(including the U.S. Army, Navy, Marine Corps, Air Force, and Coast
Guard), of any State, or any political subdivision or agency thereof.
(b) The Administrator shall exempt from payment of an application
fee for registration or reregistration any charitable organization as
specified under Internal Revenue Service Code Title XXVI, United States
Code, section 501(c)(3) which obtains a drug product containing a List
I chemical that is regulated pursuant to Sec. 1300.02(b)(28)(i)(D),
and which distributes or exports the drug product to other charitable
organizations as specified under Title XXVI, United States Code,
section 501(c)(3) for ultimate distribution to the end user. Charitable
organizations seeking an exemption from the payment of application fees
for registration or reregistration must present to the Administration,
along with their application for registration or reregistration, a copy
of their advance determination letter or determination letter issued by
the Internal Revenue Service as proof of tax-exempt status under the
provisions of Title XXVI, United States Code, section 508 and its
implementing regulations.
(c) Exemption from payment of an application fee for registration
or reregistration does not relieve the registrant of any other
requirements or duties prescribed by law.
3. Section 1309.23 is proposed to be amended by revising paragraph
(b) to read as follows:
Sec. 1309.23 Separate registration for separate locations.
* * * * *
(b) The following locations shall be deemed to be places not
subject to the registration requirement:
(1) A warehouse where List I chemicals are stored by or on behalf
of a registered person, unless such chemicals are distributed directly
from such warehouse to locations other than the registered location
from which the chemicals were originally delivered;
(2) An office used by agents of a registrant where sales of List I
chemicals are solicited, made, or supervised but which neither contains
such chemicals (other than chemicals for display purposes) nor serves
as a distribution point for filling sales orders; and
(3) A contract processor where List I chemicals are processed by or
on behalf of a registered person, unless such chemicals are distributed
directly from such contract processor to locations other than the
registered location from which the chemicals were originally delivered.
4. Section 1309.24 is proposed to be revised to read as follows:
Sec. 1309.24 Waiver of registration requirement for certain
activities.
(a) The requirement of registration is waived for any agent or
employee of a person who is registered to engage in any group of
independent activities, if such agent or employee is acting in the
usual course of his or her business or employment.
(b) The requirement of registration is waived for any person who
distributes a product containing a List I chemical that is regulated
pursuant to 21 CFR 1300.02(b)(28)(i)(D), if that person is registered
with the Administration to manufacture, distribute or dispense a
controlled substance.
(c) The requirement of registration is waived for any person
registered with the Administration to manufacture, distribute, or
dispense controlled substances who is conducting similar or equivalent
activities with a drug product containing a List I chemical that is
regulated pursuant to 21 CFR 1300.02(b)(28)(i)(D). However, a separate
chemical registration must be obtained for dissimilar activities. (For
example, a retail pharmacy may distribute below-threshold retail
quantities of drug products containing List I chemicals that are
regulated pursuant to 21 CFR 1300.02(b)(28) to an individual for
personal medical use under its retail distribution exemption, but must
obtain a separate chemical registration for distributions of above-
threshold quantities or distributions not intended for the personal
medical use of an individual customer. Further, a controlled substances
distributor may distribute drug products containing List I chemicals
that are regulated pursuant to 21 CFR 1300.02(b)(28) under its
controlled substances distribution registration, but must obtain a
separate chemical registration to manufacture drug products containing
List I
[[Page 66058]]
chemicals that are regulated pursuant to 21 CFR 1300.02(b)(28).)
(d) The requirement of registration is waived for any person who
distributes a prescription drug product containing a List I chemical
that is regulated pursuant to 21 CFR 1300.02(b)(28)(i)(D) of this
chapter.
(e) The requirement of registration is waived for any retail
distributor whose activities with respect to List I chemicals are
limited to the distribution of below-threshold quantities of
pseudoephedrine, phenylpropanolamine, or combination ephedrine product
that is regulated pursuant to 21 CFR 1300.02(b)(28)(i)(D) of this
chapter, in a single transaction to an individual for legitimate
medical use, irrespective of whether the form of packaging of the
product meets the definition of ``ordinary over-the-counter
pseudoephedrine or phenylpropanolamine product'' under 21 CFR
1300.02(b)(31) of this chapter.
(f) The requirement of registration is waived for any person whose
activities with respect to List I chemicals are limited to the
distribution of red phosphorus, white phosphorus, or hypophosphorous
acid (and its salts) to: another location operated by the same firm
solely for internal end-use; or an EPA or State licensed waste
treatment or disposal firm for the purpose of waste disposal.
(g) The requirement of registration is waived for any person whose
distribution of red phosphorus or white phosphorus is limited solely to
residual quantities of chemical returned to the producer, in reusable
rail cars and intermodal tank containers which conform to International
Standards Organization specifications (with capacities greater than or
equal to 2,500 gallons in a single container).
(h) The requirement of registration is waived for any manufacturer
of a List I chemical, if that chemical is produced solely for internal
consumption by the manufacturer and there is no subsequent distribution
or exportation of the List I chemical.
(i) The requirement of registration under this part is waived for
any medical/first aid kit provider whose activities consist of
distributing, in face-to-face transactions, a drug product containing
retail below-threshold amounts of pseudoephedrine that is regulated
pursuant to 21 CFR 1300.02(b)(28)(i)(D) to businesses for the sole
purpose of supplying/replenishing a medical/first aid kit maintained
for the personal use of employees in the workplace. For purposes of
this paragraph, the term transaction is defined to mean the provision
of regulated drug products to a specific location, not the provision of
regulated drug products to a specific medical/first aid kit within a
location.
(1) Persons requesting a waiver of the requirement of registration
must submit a notification of this business activity on official
company letterhead to the Drug Enforcement Administration, Office of
Diversion Control, Chemical Control Section, Washington, DC 20537.
(2) Notification of this business activity should be in the
following form:
I, ---------- the ---------- (title) of ---------- (name of
company) located at ---------- (street address) ---------- (city) --
-------- (state)---------- (ZIP code) am writing to request a waiver
of the Drug Enforcement Administration (DEA) chemical registration
requirement for ---------- (name of company)'s activities involving
the distribution of drug products containing pseudoephedrine that
are regulated pursuant to Title 21, Code of Federal Regulations,
Sec. 1300.02(b)(28)(i)(D) to businesses for the purpose of
supplying/replenishing medical or first aid kits maintained by those
businesses for the personal medical use of their employees.
This is to certify that ---------- (name of company) will comply
with the provisions of Title 21, Code of Federal Regulations, Part
1309, namely:
1. The distribution of retail below-threshold amounts of drug
products containing pseudoephedrine that are regulated pursuant to
Sec. 1300.02(b)(28)(i)(D) are to individual customers;
2. The distributions are made only in face-to-face transactions;
and
3. The distributions are only for the purpose of supplying/
replenishing medical or first aid kits maintained by businesses for
the personal medical use of their employees.
---------- (name of company) distributes an average of --------
-- dosage units of pseudoephedrine products per year.
I understand that the waiver of the registration requirement
applies only to those activities; any distribution of the products
other than as described above is subject to the registration
requirement.
Further, I understand that the waiver applies only to the
registration requirement. The recordkeeping and reporting
requirements set forth in Title 21, Code of Federal Regulations,
Part 1310, still apply to both receipts and distributions of
products containing a List I chemical that are regulated pursuant to
Title 21, Code of Federal regulations, Sec. 1300.02(b)(28)(i)(D). I
understand that if I receive more than a non-retail threshold amount
of pseudoephedrine, either singly or cumulatively, in a calendar
month from a supplier, then I must keep a record of such receipt(s).
I understand that I will receive a written decision regarding my
request for a waiver of the requirement of registration. I further
understand that to engage in the distribution of drug products
containing pseudoephedrine that are regulated pursuant to Title 21,
Code of Federal Regulations, Sec. 1300.02(b)(28)(i)(D) to medical/
first aid kits I must either be registered with the Drug Enforcement
Administration as a List I chemical handler or have received a
written waiver of the requirement of registration. A copy of this
letter will be kept in my records.
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(signature)
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(title)
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(date)
(3) The request for a waiver of the requirement of registration
will be evaluated based on compliance with the above criteria and on
public interest criteria as defined in 21 U.S.C. 823(h). Once a
determination has been made regarding the request for waiver, DEA will
notify the requestor in writing of the decision.
(4) Public reporting burden for collection of this information is
estimated to average 1 hour per response, including the time to review
instructions, write the request, and send it to the appropriate
location. Send comments regarding this burden estimate or any other
aspect of this collection of information, including suggestions for
reducing this burden to the Drug Enforcement Administration, Records
Management Section, Washington, DC 20537; and to the Office of
Management and Budget, Paperwork Reduction Project No. 1117-00xx,
Washington, DC 20503.
(j) The requirement of registration under this part is waived for
persons distributing sample packages of a product containing retail
below-threshold amounts of pseudoephedrine that is regulated pursuant
to 21 CFR 1300.02(b)(28)(i)(D) containing not more than two solid
dosage units, or the equivalent of two dosage units in liquid form, not
to exceed 10 milliliters of liquid per package. Distributions are
limited to not more than one package distributed to an individual or
residential address in any 30-day period.
(1) Persons requesting a waiver of the requirement of registration
must submit a notification of this business activity on official
company letterhead to the Special Agent in Charge of the Administration
in the area in which the person is located.
(2) The Special Agent in Charge shall authorize and instruct the
person distributing the sample packages on handling and security of the
product.
(3) Public reporting burden for collection of this information is
estimated to average 1 hour per response, including the time to review
instructions, write the notification, and send it to the appropriate
location. Send comments regarding this burden
[[Page 66059]]
estimate or any other aspect of this collection of information,
including suggestions for reducing this burden to the Drug Enforcement
Administration, Records Management Section, Washington, DC 20537; and
to the Office of Management and Budget, Paperwork Reduction Project No.
1117-00??, Washington, DC 20503.
(k) For any person who manufactures ephedrine, pseudoephedrine or
phenylpropanolamine at a registered location and also manufactures
research/reference standards containing ephedrine, pseudoephedrine or
phenylpropanolamine at a separate location, the requirement of
registration under this part is waived for the location at which
research/reference standards containing ephedrine, pseudoephedrine or
phenylpropanolamine are manufactured and distributed, so long as the
research/reference standards are distributed only to other locations
operated by the same registered manufacturer. Distributions may not
exceed five grams per transaction and fifty grams cumulatively per
calendar month.
(l) If any person exempted under paragraph (b), (c), (d), (e), (f),
(g) or (k) of this section also engages in the distribution,
importation or exportation of a List I chemical, other than as
described in such paragraph, the person shall obtain a registration for
such activities, as required by Sec. 1309.21 of this part.
(m) The Administrator may, upon finding that continuation of the
waiver would not be in the public interest, suspend or revoke a waiver
granted under paragraph (b), (c), (d), (e), (f), (g), (h), (i), (j) or
(k) of this section pursuant to the procedures set forth in Sec. Sec.
1309.43 through 1309.46 and 1309.51 through 1309.55 of this part. In
considering the revocation or suspension of a person's waiver granted
pursuant to paragraph (b) or (c) of this section, the Administrator
shall also consider whether action to revoke or suspend the person's
controlled substance registration pursuant to 21 U.S.C. 824 is
warranted.
(n) Any person exempted from the registration requirement under
this section shall comply with the security requirements set forth in
Sec. Sec. 1309.71 through 1309.73 of this part and the recordkeeping
and reporting requirements set forth under parts 1310 and 1313 of this
chapter.
Sec. 1309.62 [Amended]
5. In Section 1309.62(a) remove the word ``cases'' and add the word
``ceases'' in its place.
PART 1310--RECORDS AND REPORTS OF LISTED CHEMICALS AND CERTAIN
MACHINES
6. The authority citation for 21 CFR Part 1310 continues to read as
follows:
Authority: 21 U.S.C. 802, 830, 871(b).
Sec. 1310.05 [Amended]
7. In Sec. 1310.05(d), remove the reference to Sec.
1310.01(f)(1)(iv) or Sec. 1310.01(f)(1)(v) and add the reference Sec.
1300.02(b)(28)(i)(D) or Sec. 1300.02(b)(28)(i)(E)'' in its place.
Sec. 1310.06 [Amended]
8. In Sec. 1310.06(h)(5), remove the reference to Sec.
1310.01(f)(1)(iv) or Sec. 1310.01(f)(1)(v) and add the reference
``Sec. 1300.02(b)(28)(i)(D) or Sec. 1300.02(b)(28)(i)(E) in its
place.
Sec. 1310.10 [Amended]
9. In Sec. 1310.10(a), remove the reference to ``Sec.
1310.01(b)(28)(i)(D)'' and add the reference ``Sec.
1300.02(b)(28)(i)(D)'' in its place.
Sec. 1310.14 [Removed]
10. Remove Sec. 1310.14.
Sec. 1310.15 [Removed]
11. Remove Sec. 1310.15.
Dated: November 14, 2003.
Laura M. Nagel,
Deputy Assistant Administrator, Office of Diversion Control.
[FR Doc. 03-29236 Filed 11-24-03; 8:45 am]
BILLING CODE 4410-09-P