[Federal Register: July 10, 2007 (Volume 72, Number 131)]
[Rules and Regulations]
[Page 37439-37453]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10jy07-8]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Parts 1300 and 1315
[Docket No. DEA-293I]
RIN 1117-AB08
Import and Production Quotas for Certain List I Chemicals
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Interim final rule with request for comment.
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SUMMARY: In March 2006, Congress enacted the Combat Methamphetamine
Epidemic Act of 2005, which mandates that DEA establish total annual
requirements, import quotas, individual manufacturing quotas, and
procurement quotas for three List I chemicals--ephedrine,
pseudoephedrine, and phenylpropanolamine. DEA is promulgating this rule
to incorporate the statutory provisions and make its regulations
consistent with the new requirements.
DATES: Effective Date: July 10, 2007. Comment Date: Written comments
must be postmarked on or before September 10, 2007.
ADDRESSES: To ensure proper handling of comments, please reference
``Docket No. DEA-293'' on all written and electronic correspondence.
Written comments being sent via regular mail should be sent to the
Deputy Administrator, Drug Enforcement Administration, Washington, DC
20537, Attention: DEA Federal Register Representative/ODL. Written
comments sent via express mail should be sent to DEA Headquarters,
Attention: DEA Federal Register Representative/ODL, 2401 Jefferson-
Davis Highway, Alexandria, VA 22301. Comments may be directly sent to
DEA electronically by sending an electronic message to
dea.diversion.policy@usdoj.gov. Comments may also be sent
electronically through http://www.regulations.gov using the electronic
comment form provided on that site. An electronic copy of this document
is also available at the http://www.regulations.gov Web site. DEA will
accept attachments to electronic comments in Microsoft word,
WordPerfect, Adobe PDF, or Excel file formats only. DEA will not accept
any file format other than those specifically listed here.
Posting of Public Comments: Please note that all comments received
are considered part of the public record and made available for public
inspection online at http://www.regulations.gov. Such information
includes personal identifying information (such as your name, address,
etc.) voluntarily submitted by the commenter.
If you want to submit personal identifying information (such as
your name, address, etc.) as part of your comment, but do not want it
to be posted online, you must include the phrase ``PERSONAL IDENTIFYING
INFORMATION'' in the first paragraph of your comment. You must also
place all the personal identifying information you do not want posted
online in the first paragraph of your comment and identify what
information you want redacted.
If you want to submit confidential business information as part of
your comment but do not want it to be posted online, you must include
the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the first paragraph
of your comment. You must also prominently identify confidential
business information to be redacted within the comment. If a comment
has so much confidential business information that it cannot be
effectively redacted, all or part of that comment may not be posted on
http://www.regulations.gov.
Personal identifying information and confidential business
information identified and located as set forth above will be redacted
and placed in the agency's public docket file, and, where possible,
posted online. If you wish to inspect the agency's public docket file
in person by appointment, please see the ``For Additional Information''
paragraph.
FOR FURTHER INFORMATION CONTACT: Christine A. Sannerud, Ph.D., Chief,
Drug and Chemical Evaluation Section, Office of Diversion Control, Drug
Enforcement Administration, Washington, DC 20537 at (202) 307-7183.
SUPPLEMENTARY INFORMATION:
DEA's Legal Authority
DEA implements the Comprehensive Drug Abuse Prevention and Control
Act of 1970, often referred to as the Controlled Substances Act (CSA)
and the Controlled Substances Import and Export Act (21 U.S.C. 801-
971), as amended. DEA publishes the implementing regulations for these
statutes in Title 21 of the Code of Federal Regulations (CFR), Parts
1300 to 1399. These regulations are designed to ensure that there is a
sufficient supply of controlled substances for legitimate medical,
scientific, research, and industrial purposes, for lawful exports, and
for maintenance of reserve stocks while deterring the diversion of
controlled substances to illegal purposes. The CSA mandates that DEA
[[Page 37440]]
establish a closed system of control for manufacturing, distributing,
and dispensing controlled substances. Any person who manufactures,
distributes, dispenses, imports, exports, or conducts research or
chemical analysis with controlled substances must register with DEA
(unless exempt) and comply with the applicable requirements for the
activity. The CSA as amended also requires DEA to regulate the
manufacture, distribution, import, and export of chemicals that may be
used to manufacture controlled substances illegally. Listed chemicals
that are classified as List I chemicals are important to the
manufacture of controlled substances. Those classified as List II
chemicals may be used to manufacture controlled substances.
On March 9, 2006, the President signed the Combat Methamphetamine
Epidemic Act of 2005 (CMEA), which is Title VII of the USA PATRIOT
Improvement and Reauthorization Act of 2005 (Pub. L. 109-177). The Act
amends the CSA by adding new provisions related to the importation,
production, and sale of ephedrine, pseudoephedrine, and
phenylpropanolamine, their salts, optical isomers, and salts of optical
isomers, and products that contain any of the three chemicals.
Ephedrine, Pseudoephedrine, and Phenylpropanolamine
Ephedrine, pseudoephedrine, and phenylpropanolamine are List I
chemicals because each can be the primary ingredient needed to
manufacture controlled substances illegally. Ephedrine and
pseudoephedrine are primary ingredients important in the illicit
manufacture of methamphetamine, a Schedule II controlled substance, and
methcathinone, a Schedule I controlled substance; phenylpropanolamine
is a primary ingredient important in the illicit manufacture of
amphetamine, also a Schedule II controlled substance. Each of the
chemicals is also approved as an active pharmaceutical ingredient used
in products with legitimate medical purposes. Ephedrine is used in
prescription and over-the-counter (OTC) products as a bronchodilator
(e.g., for treating asthma). Pseudoephedrine, a decongestant, is a
common ingredient in both prescription and OTC cold and allergy
medications. Research by the National Association of Chain Drug Stores
identified approximately 2,500 OTC products that contain
pseudoephedrine. The Food and Drug Administration's National Drug Code
(NDC) online directory of prescription drugs lists 158 products that
contain ephedrine and about 1,250 that contain pseudoephedrine. In
November, 2000, the Food and Drug Administration (FDA) issued a public
health advisory concerning phenylpropanolamine and requested that all
drug companies discontinue marketing products containing
phenylpropanolamine due to risk of hemorrhagic stroke. In response,
many companies voluntarily reformulated their products to exclude
phenylpropanolamine. Subsequently, on December 22, 2005, FDA published
a Notice of Proposed Rulemaking (70 FR 75988) proposing to categorize
all OTC nasal decongestants and weight control drug products containing
phenylpropanolamine preparations as Category II, nonmonograph, i.e.,
not generally recognized as being safe for human consumption.
Prior to the enactment of CMEA, ephedrine, pseudoephedrine, and
phenylpropanolamine were subject to the same requirements as other List
I chemicals as they apply to manufacture, non-retail distribution,
import, and export. Any person who manufactured the chemical for
distribution, distributed, imported, or exported the chemical was
required to register with DEA and maintain records on transactions at
or above certain threshold quantities. Bulk manufacturers filed annual
reports regarding their manufacturing activities with DEA. Importers
and exporters had to notify DEA in advance of importations or
exportations unless the transaction was between a regulated person and
a regular customer abroad or an importation by a regular importer; in
that case, the importers and exporters had to notify DEA no later than
the date of the transaction. Sales of OTC drug products containing one
of the chemicals were subject to sales thresholds above which retail
distributors were required to maintain records, but certain forms
(blister packs) were generally not subject to control. Mail order
sellers of the OTC drugs filed monthly reports. The manufacture,
distribution, import, export, and retail sale of prescription products
containing the chemicals were not regulated.
Combat Methamphetamine Epidemic Act of 2005
The Combat Methamphetamine Epidemic Act of 2005 (CMEA) amends the
CSA to tighten controls on the manufacture, distribution, import,
export, and retail sale of three List I chemicals--ephedrine,
pseudoephedrine, and phenylpropanolamine, and drug products containing
them. CMEA imposes the following changes:
Sales limits apply to retail sales of OTC products.
Regulated sellers are required to store the products behind the counter
or in locked cabinets and maintain records on each sale, including
verifying the name of the purchaser against an approved form of
identification supplied by the purchaser. The exemption for blister
packs has been removed. Thus, all products sold at retail (except
individual sales transactions consisting of a single package of
pseudoephedrine where the package contains not more than 60 milligrams)
are regulated under the Controlled Substances Act.
DEA must establish an assessment of the annual needs for
estimated medical, scientific, research, and industrial needs of the
United States, for lawful exports, and for reserve stocks, for the
three chemicals. That assessment will set an upper limit on the
quantity of the chemicals and products containing the chemicals that
can be produced in or imported to the United States.
Bulk manufacturers must obtain a manufacturing quota to
produce any of the three chemicals.
Manufacturers who purchase the bulk chemicals to produce
products must obtain a procurement quota.
Importers must obtain a quota to import the chemicals in
bulk or in drug products.
Importers, exporters, brokers, and traders must provide
additional information on the persons to whom they intend to sell the
chemicals prior to the sale. They must also provide a return
declaration, providing actual information regarding the import, export,
or international transaction.
Because the mandated changes affect different business activities,
DEA is revising its regulations to implement these mandated changes
through a series of rulemakings. This Interim Final Rule addresses the
CMEA mandate for establishment of an assessment of annual needs and
quotas to limit production and importation to those established needs.
Establishing Annual Needs
CMEA amended the CSA to add ephedrine, pseudoephedrine, and
phenylpropanolamine to Sec. 826 of the Act, which requires production
quotas for controlled substances. The amendment essentially requires
that the three chemicals be treated in the same way as Schedule I and
II controlled substances. Under the CSA, DEA must limit the quantity of
Schedule I and II controlled substances to that which is necessary to
meet the estimated medical, scientific, research, and
[[Page 37441]]
industrial needs of the United States, for lawful export requirements,
and for the establishment and maintenance of reserve stocks. DEA
establishes the annual needs for each controlled substance, the
``aggregate production quota'', and uses that figure to issue
manufacturing and procurement quotas. With very limited exceptions,
imports of controlled substances are sold to manufacturers (which
include repackagers). Because importers can only distribute controlled
substances to DEA registrants and manufacturers can purchase only the
amount authorized under their procurement quotas, DEA has not needed to
issue import quotas to importers. The closed system of control that the
CSA mandates for controlled substances means that DEA can track the
importation, manufacture, and distribution of controlled substances.
The circumstances for the manufacturing and distribution of the
three List I chemicals are different in a number of ways.
Most of the bulk ephedrine, pseudoephedrine, and
phenylpropanolamine used in the United States is imported. DEA is
notified of these imports, but until now DEA has not obtained
information on the purchasers of the imported chemicals. (DEA has
promulgated separate regulations under CMEA that will require importers
of all listed chemicals to indicate their downstream customers (72 FR
17401, April 9, 2007).) Although most imported bulk chemicals will be
sold to manufacturers, it is possible that some bulk materials could be
sold to distributors or exporters.
Distributors are required to keep records of transactions
involving these chemicals, but do not file reports with DEA on
distributions.
Dosage units of OTC drugs containing the chemicals are
imported. Although these may be transferred to repackagers or
relabelers (who are registered as manufacturers), some may be imported
already packaged for retail sale and transferred to distributors or
directly to retailers. Retailers may not be DEA registrants.
Prescription drugs containing one of the chemicals may be
imported. Until now, neither the importation, distribution, nor
manufacture of these drugs has been subject to DEA regulations.
To assess the national needs and limit the quantity of the three
chemicals to those national needs, DEA must collect information on
manufacturing, imports, and exports and set production quotas for
manufacturers and import quotas for importers. Because the chemicals
are used in approximately 1,400 prescription products, DEA must cover
the manufacture and import of these products as well as the more than
2,500 OTC drug products. In another rulemaking, DEA is revising its
regulations to require that manufacturers and importers of prescription
drug products containing any of the three chemicals must register with
DEA. DEA is also revising, in a separate rulemaking, the thresholds
applied to ephedrine, pseudoephedrine, and phenylpropanolamine so that
all transactions will be regulated.
Discussion of the Rule
CMEA amends the CSA by adding ephedrine, pseudoephedrine, and
phenylpropanolamine to each of the paragraphs in 21 U.S.C. 826,
Production quotas for controlled substances. Section 826 requires DEA
to establish total annual needs for each of the three chemicals and to
limit manufacturing of the chemicals to the amount needed to provide
for medical, scientific, research, and industrial purposes, for lawful
exports, and for the maintenance of reserve stocks. In addition, CMEA
amends 21 U.S.C. 952 (importation of controlled substances) by adding a
new paragraph (d) to cover the importation of the three chemicals; the
new paragraph indicates, along with language from the Conference report
on CMEA, that Congress expected DEA to establish import quotas for the
chemicals:
Section 715. Restrictions on importation; authority to permit
imports for medical, scientific, or other legitimate purposes
Section 715 of the conference report is a new provision and extends
the Attorney General's existing authority to set import quotas for
controlled substances (see 21 U.S.C. Sec. 952) to pseudoephedrine,
ephedrine, and phenylpropanolamine. This section allows registered
importers to apply for temporary or permanent increases in a quota
to meet legitimate needs. The Attorney General is required to act on
all such applications within 60 days.
These sections of the CSA are implemented through a new part, 21
CFR part 1315. Most of the requirements for the assessment of annual
national needs and for manufacturing and procurement quotas directly
parallel the requirements for controlled substance quotas provided in
part 1303.
Production Quotas
Under part 1315, bulk manufacturers of the three chemicals will be
required to obtain annual manufacturing quotas. A separate quota is
required for each chemical. A bulk manufacturer must be registered as a
manufacturer to handle the chemical for which quota is applied. A bulk
manufacturer must complete and file a DEA Form 189 by April 1 of each
year for the following calendar year. The applicant must provide the
following information on the form:
For the current and preceding two years, the actual
quantity manufactured, actual net disposals, and actual inventory as of
December 31.
For the next year, the desired quota, the name and
registration number of each customer and the amount estimated to be
sold to each, and any additional factors the applicant finds relevant
to fixing the quota.
DEA notes that the above requirements are consistent with existing
requirements for controlled substances quotas found in 21 CFR Part
1303.
Each manufacturer that purchases the chemicals in bulk or in dosage
forms will be required to obtain a procurement quota to obtain the bulk
chemicals or dosage forms. A separate procurement quota is required for
each chemical. The applicant must apply using DEA Form 250. The
applicant must provide the following information:
A statement about the purpose(s) of the requested chemical
and the quantity which will be used for each purpose during the next
calendar year. The applicant should provide information about the
quantities used (acquired, distributed, and inventory) for the current
and preceding 2 calendar years.
If the purpose is to manufacture dosage forms, the
applicant must state the official name, common or usual name, chemical
name, or brand name of that dosage form, and must include the strength.
The company must state the type of activity intended:
product development, repackaging, relabeling, manufacturing OTC
finished product, manufacturing prescription finished product.
If the purpose is to manufacture a controlled substance
listed in Schedule I or II or another List I chemical, the applicant
must state the quantity of the other substance or chemical that the
applicant has applied to manufacture under Sec. 1303.22 and the
quantity of the first chemical needed to manufacture a specified unit
of the second chemical.
DEA notes that the above requirements are consistent with existing
requirements for controlled substances quotas found in 21 CFR Part
1303.
DEA recognizes that applicants may not have complete data on
inventories and records for previous years because DEA has not required
registrants to keep these records. Most manufacturers of
[[Page 37442]]
OTC products should have the information in the records they maintain
on regulated transactions. Applicants who manufacture prescription
products may not have full records for the initial filings. DEA notes
that the provision of incomplete information as part of an application
for quota in the initial year of implementation of quotas for
ephedrine, pseudoephedrine, and phenylpropanolamine may not, in and of
itself, prevent an applicant from obtaining quota. DEA has significant
experience regarding the processing of quota applications for which
incomplete information is present at the initial establishment of quota
(e.g., a new formulation of a controlled substance). DEA will work with
quota applicants to obtain information that could be used in the
processing of the applicant's initial application.
Import Quotas
To track and control the quantity of each of the chemicals and drug
products containing the chemicals, DEA must limit imports to a quantity
consistent with the national needs. CMEA amended 21 U.S.C. 952(a) to
state that ``It shall be unlawful to import * * * ephedrine,
pseudoephedrine, and phenylpropanolamine * * * except that such amounts
of * * * ephedrine, pseudoephedrine, and phenylpropanolamine as the
Attorney General [DEA by delegation] finds necessary to provide for the
medical, scientific, or other legitimate purposes * * *.'' Importers
will be required to obtain an import quota for each chemical covering
both bulk chemicals and dosage forms. Importers will be required to
submit an application that includes the following information:
The type of product (bulk chemical or finished forms to be
transferred to a manufacturer or product to be sold for distribution).
The quantity of each type of product.
For the previous two years, the name, address, and DEA
registration number (if applicable) of each customer and the amount
sold; inventory as of December 31 for each form of the product (i.e.,
bulk chemical, in-process material, or finished dosage form); and
acquisitions (imports).
DEA recognizes that importers handling prescription products may
not have historical records for their initial filings. If an importer
is handling prescription drug products, it is possible that some of its
customers may not be DEA registrants. DEA notes that the provision of
incomplete information as part of an application for quota in the
initial year of implementation of quotas for ephedrine,
pseudoephedrine, and phenylpropanolamine may not, in and of itself,
prevent an applicant from obtaining quota. DEA has significant
experience regarding the processing of quota applications for which
incomplete information is present at the initial establishment of quota
(e.g., a new formulation of a controlled substance). DEA will work with
quota applicants to obtain information that could be used in the
processing of the applicant's initial application.
Depending on the activities that a firm engages in, a firm may have
to apply for multiple quotas. For example, a firm that imports
ephedrine to bulk manufacture pseudoephedrine would need to obtain an
import quota and a procurement quota for ephedrine and a manufacturing
quota for pseudoephedrine. A manufacturer that imports bulk ephedrine
and pseudoephedrine to produce dosage units of drugs containing the
chemicals would need to obtain separate import and procurement quotas
for each chemical.
DEA will use the information filed in support of the quota
applications as one factor in the determination of an initial
assessment of annual needs for each of the chemicals to ensure that the
United States has sufficient quantities to meet medical, scientific,
research, industrial, exportation, and reserve stock needs. DEA will
publish its assessment by May 1 and then revise the assessment based on
comments and further information before publishing a final assessment
for the following year. The assessment establishes a ceiling on
domestic manufacturing and importation of these chemicals. DEA may, at
its discretion, seek additional information from applicants if needed
to determine an appropriate level for the annual assessment ceiling.
For example, because repackagers and relabelers handle products that
are covered by other procurement or import quotas, DEA may need more
details on customers from those seeking procurement quotas to ensure
that it is not double counting quantities. This issue may arise
particularly in reference to OTC products, where a manufacturer may
produce dosage units that are repackaged or relabeled to be sold under
multiple store brand labels.
DEA is adopting the same process for manufacturing and procurement
quotas for the three chemicals as it currently applies to those quotas
for controlled substances. Manufacturers may apply for increases in
their manufacturing quotas; DEA may reduce individual manufacturing
quotas to prevent the total amount produced from exceeding the
assessment of annual needs. Manufacturers may abandon their quota by
notifying DEA.
Manufacturers holding a procurement quota may apply for adjustment
of the quota by applying to DEA with a statement indicating the need
for an adjustment. Any manufacturer who holds a procurement quota must,
before giving an order to another manufacturer or importer requiring
the distribution of a covered chemical, certify in writing that the
quantity being ordered does not exceed the unused portion of the
person's procurement quota for the year. The certification must be
signed by someone who is authorized to sign a DEA registration
application.
As specified in the CMEA amendment to section 952 of the CSA,
importers may apply for an increase in their quota and DEA may approve
the application if DEA determines that the increase is needed to meet
medical, scientific, or other legitimate purposes. For changes in the
import quota, DEA will approve or deny the application within 60 days
of receiving the application; if DEA does not reach a decision within
the 60 days, the application is considered to be approved until DEA
notifies the applicant in writing that the approval is terminated.
DEA may hold hearings, at the Administrator's sole discretion, to
obtain factual evidence regarding the assessment of national needs.
Applicants or quota holders may request hearings on the issuance,
adjustment, suspension, or denial of a quota. In hearings on the
assessment of national needs, each interested party has the burden of
proving any proposition of facts or law that the party asserts. At
hearings on the issuance, adjustment, suspension, or denial of a quota,
DEA has the burden of proving that the requirements for issuance,
adjustment, suspension, or denial of a quota are met.
Changes in Forms
DEA is amending DEA Form 189 (application for a manufacturing
quota) and DEA Form 250 (application for a procurement quota). DEA Form
189 is being amended to include the List I chemicals ephedrine,
pseudoephedrine, and phenylpropanolamine; adding a field to supply an
e-mail address; and adding a field requesting information regarding the
authority by which a product may be marketed under the Federal Food,
Drug and Cosmetic Act (e.g., NDA number or FDA monograph). DEA is
soliciting comments on this provision. DEA included this requirement in
the application to assist in making its determination that the
[[Page 37443]]
quota would be utilized for ``medical'' purposes. However, DEA notes
that there are instances in which applications may not fall within this
category (e.g., quota used to support bona fide scientific research,
industrial uses and product development efforts). DEA will consider
applications for quota to support these activities even though the
applicant would not be able to complete this portion of the
application.
DEA Form 250 is being amended to include the List I chemicals
ephedrine, pseudoephedrine, and phenylpropanolamine; adding a field to
supply an e-mail address; permitting the use of List I Chemical Code
Numbers as well as the DEA Drug Code numbers; and adding a field
requesting information regarding the authority by which a product may
be marketed under the Federal Food, Drug, and Cosmetic Act (e.g., NDA
number or FDA monograph). DEA is soliciting comments on this provision.
DEA included this requirement in the application to assist in making
its determination that the quota would be utilized for ``medical
purposes.'' However, DEA notes that there are instances in which
applications may not fall within this category (e.g., quota used to
support bona fide scientific research, industrial uses and product
development efforts). DEA will consider applications for quota to
support these activities even though the applicant would not be able to
complete this portion of the application.
In addition, DEA has developed a new DEA Form 488 for applying for
an import quota.
Imports for Personal Use
CMEA amended 21 U.S.C. 844 to make it unlawful for a person to
knowingly purchase at retail more than 9 grams of ephedrine base,
pseudoephedrine base, or phenylpropanolamine base in a scheduled listed
chemical product in a 30-day period and further stated that no more
than 7.5 grams of the 9 grams of each chemical may be imported by means
of shipping through a private or commercial carrier or the Postal
Service. Imports for personal use below these quantities are not
subject to import quota requirements. Any person who wishes to import
more than 7.5 grams of each of the chemicals in a 30-day period would
have to register as an importer and obtain an import quota.
Section-by-Section Description of the Rule
DEA is amending the definition of ``regulated transaction'', found
in 21 CFR Sec. 1300.02, to reference new part 1315.
Subpart A of new part 1315 provides general information about part
1315. Section 1315.01 defines the scope of part 1315.
Section 1315.02 provides definitions. The definition of ``net
disposal,'' which is in Sec. 1300.01 and applies to controlled
substances, is included here for the three List I chemicals. The final
paragraph repeats the statutory provisions that each of the three
chemicals includes their salts, optical isomers, and salts of optical
isomers.
Section 1315.03 provides the personal use exemption from importer
registration, import declaration, and import quotas.
Section 1315.05 specifies the persons to whom the part applies.
Subpart B, Sections 1315.11 and 1315.13 describe the process for
determining the assessment of annual needs for each of the three
chemicals and adjusting the assessment. The sections parallel
Sec. Sec. 1303.11 and 1303.13.
Subpart C, Sections 1315.21 through 1315.27 cover the requirements
for individual manufacturing quotas. The sections are taken from
Sec. Sec. 1303.21 through 1303.27.
Subpart D addresses procurement and import quotas. Section 1315.30
describes what procurement and import quotas authorize and serves as an
introduction to the requirements for these quotas.
Section 1315.32 specifies the requirements for obtaining a
procurement quota and is based on Sec. 1303.12.
Section 1315.34 covers the requirements for obtaining an import
quota. The section specifies the information that an applicant must
submit and indicates that DEA may request additional information, if
necessary.
Section 1315.36 specifies the procedures for amending an import
quota, as provided in 21 U.S.C. Sec. 952(d).
Subpart E, Sec. Sec. 1315.50 through 1315.62 cover the procedures
for hearings on the assessment of annual needs and the issuance,
adjustment, suspension, or denial of a quota. These sections are based
on Sec. Sec. 1303.31 through 1303.37.
Regulatory Certifications
Administrative Procedure Act (5 U.S.C. 553)
The Administrative Procedure Act (APA) generally requires that
agencies, prior to issuing a new rule, publish a notice of proposed
rulemaking in the Federal Register. The APA also provides, however,
that agencies may be excepted from this requirement when ``the agency
for good cause finds (and incorporates the finding and a brief
statement of reasons therefor in the rules issued) that notice and
public procedure thereon are impracticable, unnecessary, or contrary to
the public interest.'' 5 U.S.C. 553(b)(B).
With publication of this Interim Final Rule, DEA is invoking this
``good cause'' exception to the APA's notice requirement based on the
combination of several extraordinary factors. The Combat
Methamphetamine Epidemic Act of 2005 specifically amended 21 U.S.C. 826
to mandate the establishment of production quotas for the List I
chemicals ephedrine, pseudoephedrine, and phenylpropanolamine. DEA has
no discretion in this requirement and is essentially creating the same
system of production quotas for these three List I chemicals as is
currently established for controlled substances in Schedules I and II.
These regulations address the procedures for the implementation of
these quotas, and DEA has endeavored to use existing procedures
wherever possible for simplicity and ease of implementation.
Further, the CMEA amended 21 U.S.C. 952 to prohibit all importation
of ephedrine, pseudoephedrine, and phenylpropanolamine except such
amounts as the Attorney General finds to be necessary for medical,
scientific, or other legitimate purposes. The Act further amended Sec.
952 regarding import quotas for these three List I chemicals.
In a separate rulemaking, DEA implemented the retail provisions of
the CMEA (71 FR 56008, September 26, 2006; corrected at 71 FR 60609,
October 13, 2006), which included, among others:
Sales limits
Product packaging
Product placement
Logbook and verification of purchaser identity
These provisions limit the availability of scheduled listed
chemical products at the retail level. While these products will be
available for purchase, their diversion to the illicit production of
methamphetamine will be more difficult due to the sales limits, logbook
requirements, and other provisions. Congress, in crafting CMEA,
recognized that limiting of product availability at the retail level
could potentially encourage diversion of either drug products or the
List I chemicals themselves higher in the supply chain--at the import,
manufacture, and distribution levels. To address its
[[Page 37444]]
concern about ``what immediately moves in behind,'' (Rep. Souder,
February 28, 2006, CR p. 423) Congress included provisions in CMEA to
control the import, export, manufacture, and distribution of the three
chemicals and products containing them. These provisions also will make
it possible for the United States to meet the recommendations of the
International Narcotics Control Board, which encouraged its member
countries to provide for pre-export notifications and an assessment of
legitimate need for these chemicals.
In a separate rulemaking (72 FR 17401, April 9, 2007) DEA
implemented the ``spot market'' provisions of the CMEA related to the
importation, exportation, and international transactions involving all
listed chemicals. The provisions of section 716 of the CMEA implemented
by that rulemaking require importers, exporters, brokers, and traders
to notify DEA, before the transaction is to take place, of certain
information regarding the transferee(s) (downstream customer(s)) and
the listed chemicals to be transferred. Such information provides DEA
with an opportunity to evaluate the transaction.
DEA must implement the quota provisions of the CMEA on an interim
basis to ensure that product upstream from the retail level is not
diverted for illicit purposes. It would be contrary to the public
interest to allow the diversion of large amounts of ephedrine,
pseudoephedrine, and phenylpropanolamine at the wholesale level while
implementing controls at the retail level to limit sales of these very
products.
The CMEA, as evidenced by the number of rulemakings DEA is issuing
to implement it, sets forth a complex array of statutory requirements,
with different effective dates, designed to prevent the use of certain
List I chemicals in the illicit manufacture of methamphetamine and
amphetamine. In addition, the CMEA, which, among other things,
essentially reclassifies ephedrine, pseudoephedrine, and
phenylpropanolamine as scheduled listed chemicals, imposes new retail
restrictions on these products, and mandates new domestic and import
quotas, is expansive in its breadth. The broad scope of the new law, as
well as the expedited effective dates, is a clear reflection of
Congress' concern about the nation's growing methamphetamine epidemic
and its desire to act quickly to prevent further illicit use of these
chemicals.
The retail and ``spot market'' provisions of the CMEA, which DEA
has already implemented through separate rulemakings, limit the sale of
ephedrine, pseudoephedrine, and phenylpropanolamine at retail and
provide information to DEA regarding downstream customers of United
States importers, exporters, brokers and traders. They do not, however,
provide controls at the distribution, manufacturing, and importing
levels of the distribution chain. To fully implement the CMEA as
intended by Congress, and to work to combat the methamphetamine
epidemic the United States is currently experiencing, DEA must utilize
all tools at its disposal to control the importation, exportation,
manufacture, and retail sale of ephedrine, pseudoephedrine,
phenylpropanolamine, and products containing those three List I
chemicals.
In light of these factors, DEA finds that ``good cause'' exists to
issue this interim rule without engaging in traditional notice and
comment rulemaking. In so doing, DEA recognizes that exceptions to the
APA's notice and comment procedures are to be ``narrowly construed and
only reluctantly countenanced.'' Am. Fed'n of Gov't Employees v. Block,
655 F2d 1153, 1156 (DC Cir. 1981) (quoting New Jersey Dep't of Envtl.
Prot. v. EPA, 626 F.2d 1038, 1045 (DC Cir. 1980)). Based on the
totality of the circumstances associated with the CMEA, DEA finds that
invocation of the ``good cause'' exception is justified.
Under section 553(d) of the APA, DEA must generally provide a 30-
day delayed effective date for final rules. DEA may dispense with the
30-day delayed effective date requirement ``for good cause found and
published with the rule.'' DEA believes that good cause exists to make
this rule effective upon publication. As DEA noted previously,
rulemakings have already been implemented to limit the availability of
scheduled listed chemical products at the retail level. The limiting of
product availability at the retail level could potentially encourage
diversion of either drug products or the List I chemicals themselves
higher in the supply chain--at the import, manufacture, and
distribution levels. Congress included provisions in CMEA to address
this circumstance, and the quota provisions set forth in this
rulemaking work toward that goal. DEA must implement the quota
provisions of the CMEA upon publication to ensure that product upstream
from the retail level is not diverted for illicit purposes.
Regulatory Flexibility Act
The Deputy Administrator hereby certifies that this rulemaking has
been drafted in accordance with the Regulatory Flexibility Act (RFA) (5
U.S.C. 605(b)). The RFA applies only to proposed rules that are subject
to notice and comment (5 U.S.C. 601(2)). Because this rule is codifying
statutory provisions, DEA has determined, as explained above, that
public notice and comment are not necessary. Consequently, the RFA does
not apply.
DEA has nonetheless considered the impact of the rule on small
entities. As discussed below, DEA estimates that about 310 firms in the
manufacturing and wholesale sectors will be affected by this rule.
About 250 of these may be small entities under the Small Business
Administration definitions of small entities. For most of these firms
the impact of the rule will be very small; they will be required to
file an annual request for import or procurement quotas. DEA estimates
that the cost of applying for a quota is about $96 for importers and
$113 for manufacturers, which includes data collection and mailing.
These costs do not represent a significant economic impact even on the
smallest repackagers whose average revenues are above $54,000. The
average revenues of the smallest firms in sectors subject to the rule
for which the 2002 Economic Census has data are shown in Table 1.
Table 1.--Average Revenues of Smallest Firms by Affected Sector
------------------------------------------------------------------------
Average
revenue of
Sector smallest
firms
------------------------------------------------------------------------
Packaging and labeling..................................... $54,271
Drug wholesalers........................................... 127,367
Chemical wholesalers....................................... 718,697
Pharmaceutical manufacturers............................... 824,268
------------------------------------------------------------------------
The larger impact of the rule will be in any reduction in sales
that results from limits imposed by a firm's quotas. Only one firm
manufactures bulk pseudoephedrine in the United States. This firm is
owned by an Indian chemical manufacturer and is not a small entity. The
rest of the firms affected by the rule can be divided into three
sectors:
Importers and manufacturers of prescription products
containing the chemicals.
Importers and manufacturers of OTC products that are sold
primarily through drug stores, grocery stores, discount department
stores, superstores, and electronic mail order houses.
Importers and manufacturers of OTC products that are sold
almost exclusively through independent
[[Page 37445]]
convenience stores or other small outlets.
The three sectors will be affected differently by the quotas. DEA
will provide importers and manufacturers of prescription products with
the quantities that they request unless DEA has some reason to believe
that the prescription product is being diverted. These firms will not
have a significant economic impact from the rule.
Importers and manufacturers of OTC products that are sold through
conventional outlets are likely to receive the quotas requested
adjusted only to account for general estimates of diversion and
declines in demand. At this point, DEA has not estimated the adjustment
needed to account for diversion, but expects that it will be small
relative to the declines in demand that are resulting from the retail
sales restrictions. As DEA has discussed in the retail rule (71 FR
56008, September 26, 2006; corrected at 71 FR 60609, October 13, 2006),
most of the firms that manufacture these products for sales in
conventional outlets also manufacture the substitutes. DEA does not
expect that these firms will see a significant economic impact from the
quotas, but is seeking comment on this issue.
DEA anticipates that the third sector will be more severely
affected. This sector is comprised of a small number of companies that
import or manufacture products in higher dosages than are normally
purchased through conventional outlets and sell the product almost
exclusively through nonconventional outlets, such as independent
convenience stores, liquor stores, etc. Although some products sold
mainly in drug stores, grocery stores, and large discount or warehouse
stores are stolen or bought for illicit purposes, DEA's experience
indicates that products sold almost exclusively through nonconventional
outlets are far more likely to be diverted in substantial quantities.
In investigations, DEA has found some of these stores selling products
in quantities 20 to 40 times what such stores would be expected to sell
to meet legitimate needs. Many of these manufacturers have, in the
past, marketed products in packages that are no longer legal for retail
sales because they contain more than 3.6 grams of the chemical. DEA has
issued multiple warning letters to these manufacturers to inform them
of the diversion of their products.
An application for a quota from these manufacturers of products
sold primarily or exclusively through such outlets or from importers
who sell to these manufacturers will be reviewed using the same
standards used to review other applications for a quota. However, DEA
notes that the agency has published many final orders in the Federal
Register addressing the distribution of these products sold almost
exclusively to nonconventional outlets, and has found that a
significant percentage of such products have been diverted. DEA will
consider the historical uses of such products when determining whether
the quantities requested in a quota application are required to meet
the legitimate needs of the market. Consequently, if the manufacturers
of these products, and the importers supplying those manufacturers,
request quotas that are consistent with a past pattern of known
diversion, these firms may not receive quotas in the amounts requested.
It is also possible that the number of outlets carrying their products
will decline if these stores decide that CMEA requirements for retail
sales are too onerous. Some of these firms may experience a significant
economic impact, particularly if this product line generated a
substantial portion of their sales. Some of these firms appear, based
on their web sites, to have added substitutes to their product lines;
others appear to have dropped the product line altogether. DEA is
seeking comments on this issue.
Executive Order 12866
The Deputy Administrator further certifies that this rulemaking has
been drafted in accordance with the principles in Executive Order 12866
Section 1(b). It has been determined that this is ``a significant
regulatory action.'' Therefore, this action has been reviewed by the
Office of Management and Budget.
Regulated Entities. The firms subject to this rule are
manufacturers and importers. At present, only one firm in the United
States manufactures any of these chemicals in bulk and, therefore, only
that firm will have to apply for a manufacturing quota. DEA reviewed a
list of pseudoephedrine OTC and prescription products and ephedrine
prescription products and identified about 240 firms based on their
labeler codes. Each of these firms, plus any firms that repackage or
relabel, will need to obtain procurement quotas. Based on 2005 DEA
data, DEA estimates that about 69 firms with 91 locations are currently
registered to import the chemicals; these firms will need to obtain
import quotas if they are actually importing the chemicals. Although 91
locations are registered to import these chemicals, import notices
indicate that many of these locations do not handle the chemicals. If
other firms import prescription drug products that contain the
chemicals they will also have to obtain import quotas. Based on these
data, DEA estimates that 332 locations may apply for quotas if the
demand for the chemicals and drug products remains the same (1 bulk
manufacturer, 240 manufacturers, and 91 importers). Table 2 presents
the number of potential applicants by sector. Registrants must apply
for quotas for each registered location rather than by firm.
Consequently, the number of manufacturing locations applying may be
higher than listed if the firms handle the product at multiple
locations. The importers are, in some cases, also manufacturers so that
the total number of affected firms may be reduced. The total number of
importer registrants includes firms with multiple registered locations.
Table 2.--Potential Quota Applicants by Sector
------------------------------------------------------------------------
Type Number
------------------------------------------------------------------------
All Manufacturers............................................ 240
Small Manufacturers.......................................... 211
Importer Registered Locations................................ 91
Small Importer Firms......................................... 42
------------------------------------------------------------------------
Costs. As detailed in the Regulatory Flexibility Act section, there
will be some burden associated with applying for quotas. DEA estimates
that the total cost of the quota application process will be about
$35,880 a year.
As noted above, the larger cost of this rule is likely to be based
on the extent to which the quotas constrain the market for OTC products
containing ephedrine or pseudoephedrine. DEA assumes that the quotas
will not affect the prescription drug market. DEA will establish its
assessment of annual national needs for each of the chemicals, which
will serve as a ceiling on the quantities for which quotas are granted.
In setting an assessment of annual national need, DEA will consider the
likelihood that OTC sales of scheduled listed chemical products may be
reduced by the new restrictions on retail sales. Domestic demand for
these products comes from three sources:
Legitimate medical, scientific, and industrial needs and
maintenance of reserve stocks.
Exports.
Illicit use-clandestine methamphetamine/amphetamine
laboratories.
To establish the national needs and set individual quotas, DEA must
first estimate the reduction in the volume of OTC sales due to the new
retail
[[Page 37446]]
restrictions and the quantity of the chemicals now being diverted to
illicit use. This information is needed so the degree of supply
constraint implied by a given assessment can be understood. It will not
be possible to make accurate estimates of these amounts until
experience with the retail controls provides sufficient data.
Similarly, accurate cost estimates cannot be developed until these data
are available.
As DEA discussed in its Interim Final Rule on retail sales of
scheduled listed chemical products (71 FR 56008, September 26, 2006;
corrected at 71 FR 60609, October 13, 2006), DEA has no reliable
information on the value of the OTC market for these products.
Estimates range from $250 million to $1.5 billion annually prior to the
sales restrictions. The effect of State laws restricting sales and of
the anticipation of the CMEA restrictions appear to be reducing the
market considerably, at least for imports of bulk materials. Data from
the U.S. International Trade Commission on the change in the imports
from January through August of 2006 over the same period in 2005 are
shown in Table 3.
Table 3.--Change in Imports January-August 2005 to January-August 2006
------------------------------------------------------------------------
Percent Percent
change in change in
value quantity
------------------------------------------------------------------------
Ephedrine....................................... -44.9 -64.1
Pseudoephedrine................................. -66.2 -70.4
Cough and cold dosage forms..................... -4.8 -15.9
------------------------------------------------------------------------
DEA is requesting comments and data from importers and
manufacturers about the change in their markets and its impact.
DEA notes that the figures in Table 3 reflect imports for both
prescription and OTC drugs. Because DEA does not anticipate that quotas
will have any effect on prescription drugs, it is likely that the
decline in the retail market is considerable. However, even the highest
estimate of the market pre-restriction indicates that the total cost of
quota restrictions will be less than $100 million in any one year, the
standard for an economically significant rule. If the highest estimate
of the value of the market, $1.5 billion, were to remain unchanged
after retail restrictions, quotas would have to restrict that market by
6.67 percent to reach the $100 million a year level. If, as is far more
likely, the market is declining significantly absent the quotas, the
quotas would have to restrict the market by more than 10 percent to
reach the level of economically significant under the Executive Order.
At this time, DEA does not believe that the level of diversion is 6.67
percent of sales on a national basis. Therefore, DEA does not consider
that this rule will have a significant economic impact. DEA requests
comments on this issue.
Benefits. Congress, in CMEA, imposed a set of requirements on the
manufacture, import, and sale of the three chemicals. These
requirements, taken together, are intended to limit production and
sales of these chemicals to that needed for legitimate purposes. The
reduction in demand for these chemicals that is already occurring will
limit the world production and make less available for diversion on the
international market. In terms of societal accounting, the principal
benefit of quotas that constrain supply will stem from a reduction in
diversion to domestic illicit production of methamphetamine and
amphetamine. The reduced volume of diversion will cause a reduction in
the number of domestic clandestine methamphetamine laboratories and
domestic illicit production of methamphetamine. Constrained supply is
expected to raise the price of the chemicals in the domestic market
and, for the clandestine methamphetamine laboratories, increase the
cost and difficulty of obtaining them. The constrained-supply effect
will come from the retail restrictions as well as from the quota
ceiling; it is difficult to make separate quantitative estimates of the
results of these two causes.
Reduction in the number of clandestine methamphetamine laboratories
reduces costs to Federal, State, and local governments of raiding these
clandestine operations and cleaning up pollution at clandestine
methamphetamine laboratory sites. As DEA detailed in its rule on retail
sales (specifically 71 FR 56020, September 26, 2006), DEA, the States,
and local governments spent more than $17 million in clean up costs in
FY 2005. This cost covers only the removal of chemicals that could be
reused from clandestine laboratory sites; the cost of cleaning up soil
or property contamination is paid by the land owner, but if the owner
cannot pay the cost, local governments bear the burden or the
contamination remains. The costs also do not cover the time State and
local governments spend investigating, arresting, and trying
clandestine laboratory operators or the social costs related to
children and others exposed to hazardous chemicals at these
laboratories.
Paperwork Reduction Act
DEA is revising two information collections currently approved
under the Paperwork Reduction Act of 1998, and establishing a new
information collection to address new mandates established by the CMEA.
The two information collections being revised are OMB approval number
1117-0006: ``Application for Individual Manufacturing Quota for a Basic
Class of Controlled Substance and for Ephedrine, Pseudoephedrine, and
Phenylpropanolamine'' (DEA Form 189), and OMB approval number 1117-
0008: ``Application for Procurement Quota for Controlled Substances and
Ephedrine, Pseudoephedrine, and Phenylpropanolamine'' (DEA Form 250).
DEA is revising these collections by slightly revising the forms and
increasing the estimated annual number of respondents and responses.
Those changes have been discussed above, and are necessary for DEA to
implement the provisions of the Combat Methamphetamine Epidemic Act of
2005. DEA is also establishing a new information collection:
``Application for Import Quota for Ephedrine, Pseudoephedrine, and
Phenylpropanolamine'' (DEA Form 488).
The Department of Justice, Drug Enforcement Administration, has
submitted the following information collection requests to the Office
of Management and Budget (OMB) for review and clearance in accordance
with review procedures of the Paperwork Reduction Act of 1995. The
proposed information collections are published to obtain comments from
the public and affected agencies.
All comments and suggestions, or questions regarding additional
information, to include obtaining a copy of the information collection
instrument with instructions, should be directed to Mark W. Caverly,
Chief, Liaison and Policy Section, Office of Diversion Control, Drug
Enforcement Administration, Washington, DC 20537.
Written comments and suggestions from the public and affected
agencies concerning the collections of information are encouraged. Your
comments on the information collection-related aspects of this rule
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;
[[Page 37447]]
(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.
Overview of information collection OMB 1117-0006:
(1) Type of Information Collection: revision of an existing
collection.
(2) Title of the Form/Collection: Application for Individual
Manufacturing Quota for a Basic Class of Controlled Substance and for
Ephedrine, Pseudoephedrine, and Phenylpropanolamine.
(3) Agency form number, if any, and the applicable component of the
Department of Justice sponsoring the collection:
Form Number: DEA Form 189.
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: 21 U.S.C. 826 and 21 CFR 1303.22 and 1315.22 require that
any person who is registered to manufacture any basic class of
controlled substances listed in Schedule I or II and who desires to
manufacture a quantity of such class, or who desires to manufacture
using the List I chemicals ephedrine, pseudoephedrine, or
phenylpropanolamine, must apply on DEA Form 189 for a manufacturing
quota for such quantity of such class or List I chemical.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: Only one firm
currently manufactures these chemicals in the United States so only one
additional firm will need to file this form. DEA estimates that each
form takes 0.5 hours (30 minutes) to complete. Therefore, the burden
increase for this one firm associated with this rulemaking is 0.5 hours
annually.
(6) An estimate of the total public burden (in hours) associated
with the collection:
One individual respondent will spend 0.5 hours (30 minutes)
annually completing this form for the List I chemicals ephedrine,
pseudoephedrine, and phenylpropanolamine. This results in an annual
public burden of 0.5 hours.
This form is already used to collect information regarding
controlled substances quotas. For that aspect of this collection, 36
respondents submit 297 responses annually, for a public burden of 148.5
hours annually. DEA notes that the controlled substances aspect of this
collection is not being adjusted or revised.
Therefore, in total, 37 firms take 0.5 hours (30 minutes) each to
complete the form. This results in a total public burden of 149 hours
annually.
Overview of information collection OMB 1117-0008:
(1) Type of Information Collection: revision of an existing
collection.
(2) Title of the Form/Collection: Application for Procurement Quota
for Controlled Substances and Ephedrine, Pseudoephedrine, and
Phenylpropanolamine.
(3) Agency form number, if any, and the applicable component of the
Department of Justice sponsoring the collection:
Form Number: DEA Form 250, 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: 21 U.S.C. 826 and 21 CFR 1303.12 and 1315.32 require that
U.S. companies who desire to use any basic class of controlled
substances listed in Schedule I or II or the List I chemicals
ephedrine, pseudoephedrine, and phenylpropanolamine for purposes of
manufacturing during the next calendar year shall apply on DEA Form 250
for procurement quota for such class or List I chemical.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: DEA estimates
that each form takes 1 hour to complete. DEA estimates that 240
individual respondents will respond to this form.
(6) An estimate of the total public burden (in hours) associated
with the collection: 240 individual respondents will spend one hour
annually completing this form for the List I chemicals ephedrine,
pseudoephedrine, and phenylpropanolamine. This results in an annual
public burden of 240 hours.
This form is already used to collect information regarding
controlled substances quotas. For that aspect of this collection, 255
respondents submit 1,106 responses annually, for a public burden of
1,106 hours annually. DEA notes that the controlled substances aspect
of this collection is not being adjusted or revised.
Therefore, the total public burden for this collection is 1,346
hours annually.
Overview of new information collection:
(1) Type of Information Collection: new collection.
(2) Title of the Form/Collection: Application for Import Quota for
Ephedrine, Pseudoephedrine, and Phenylpropanolamine.
(3) Agency form number, if any, and the applicable component of the
Department of Justice sponsoring the collection:
Form Number: DEA Form 488, 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: 21 U.S.C. 952 and 21 CFR 1315.34 require that persons who
desire to import the List I chemicals ephedrine, pseudoephedrine, and
phenylpropanolamine during the next calendar year shall apply on DEA
Form 488 for import quota for such List I chemicals.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: DEA estimates
that 91 individual respondents will apply for import quotas. DEA
estimates that each response will take one hour.
(6) An estimate of the total public burden (in hours) associated
with the collection: DEA estimates that this collection will involve 91
annual public burden hours.
If additional information is required, contact: Lynn Bryant,
Department Clearance Officer, Information Management and Security
Staff, Justice Management Division, Department of Justice, Patrick
Henry Building, Suite 1600, 601 D Street NW., Washington, DC 20530.
Executive Order 12988
This regulation meets the applicable standards set forth in
Sec. Sec. 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice
Reform.
Executive Order 13132
This rulemaking does not preempt or modify any provision of State
law; nor
[[Page 37448]]
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
$120,000,000 or more (adjusted for inflation) 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.
Congressional Review Act
This rule is not a major rule as defined by section 804 of the
Small Business Regulatory Enforcement Fairness Act of 1996
(Congressional Review Act). 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 1300
Chemicals, Drug traffic control.
21 CFR Part 1315
Administrative practice and procedure, Chemicals, Drug traffic
control, Imports, Reporting and recordkeeping requirements.
0
For the reasons set out above, 21 CFR Chapter II is amended as follows:
PART 1300--DEFINITIONS
0
1. The authority citation for part 1300 continues to read as follows:
Authority: 21 U.S.C. 802, 871(b), 951, 958(f).
0
2. Section 1300.02 is amended by revising paragraph (b)(28)(i)(B) to
read as follows:
Sec. 1300.02 Definitions related to listed chemicals.
* * * * *
(b) * * *
(28) * * *
(i) * * *
(B) A delivery of a listed chemical to or by a common or contract
carrier for carriage in the lawful and usual course of the business of
the common or contract carrier, or to or by a warehouseman for storage
in the lawful and usual course of the business of the warehouseman,
except that if the carriage or storage is in connection with the
distribution, importation, or exportation of a listed chemical to a
third person, this paragraph does not relieve a distributor, importer,
or exporter from compliance with parts 1309, 1310, 1313, and 1315 of
this chapter;
* * * * *
0
3. Part 1315 is added to read as follows:
PART 1315--IMPORTATION AND PRODUCTION QUOTAS FOR EPHEDRINE,
PSEUDOEPHEDRINE, AND PHENYLPROPANOLAMINE
Subpart A--General Information
Sec.
1315.01 Scope.
1315.02 Definitions.
1315.03 Personal use exemption.
1315.05 Applicability.
Subpart B--Assessment of Annual Needs
1315.11 Assessment of annual needs.
1315.13 Adjustments of assessment of annual needs.
Subpart C--Individual Manufacturing Quotas
1315.21 Individual manufacturing quotas.
1315.22 Procedure for applying for individual manufacturing quotas.
1315.23 Procedure for fixing individual manufacturing quotas.
1315.24 Inventory allowance.
1315.25 Increase in individual manufacturing quotas.
1315.26 Reduction in individual manufacturing quotas.
1315.27 Abandonment of quota.
Subpart D--Procurement and Import Quotas
1315.30 Procurement and import quotas.
1315.32 Obtaining a procurement quota.
1315.34 Obtaining an import quota.
1315.36 Amending an import quota.
Subpart E--Hearings
1315.50 Hearings generally.
1315.52 Purpose of hearing.
1315.54 Waiver or modification of rules.
1315.56 Request for hearing or appearance; waiver.
1315.58 Burden of proof.
1315.60 Time and place of hearing.
1315.62 Final order.
Authority: 21 U.S.C. 802, 821, 826, 871(b), 952.
Subpart A--General Information
Sec. 1315.01 Scope.
This part specifies procedures governing the establishment of an
assessment of annual needs, procurement and manufacturing quotas
pursuant to section 306 of the Act (21 U.S.C. 826), and import quotas
pursuant to section 1002 of the Act (21 U.S.C. 952) for ephedrine,
pseudoephedrine, and phenylpropanolamine.
Sec. 1315.02 Definitions.
(a) Except as specified in paragraphs (b) and (c) of this section,
any term contained in this part shall have the definition set forth in
section 102 of the Act (21 U.S.C. 802) or part 1300 of this chapter.
(b) The term net disposal means, for a stated period, the sum of
paragraphs (b)(1) through (b)(3) of this section minus the sum of
paragraphs (b)(4) and (b)(5) of this section:
(1) The quantity of ephedrine, pseudoephedrine, or
phenylpropanolamine distributed by the registrant to another person.
(2) The quantity of that chemical used by the registrant in the
production of (or converted by the registrant into) another chemical or
product.
(3) The quantity of that chemical otherwise disposed of by the
registrant.
(4) The quantity of that chemical returned to the registrant by any
purchaser.
(5) The quantity of that chemical distributed by the registrant to
a registered manufacturer of that chemical for purposes other than use
in the production of, or conversion into, another chemical or in the
manufacture of dosage forms of that chemical.
(c) Ephedrine, pseudoephedrine, and phenylpropanolamine include
their salts, optical isomers, and salts of optical isomers.
Sec. 1315.03 Personal use exemption.
A person need not register as an importer, file an import
declaration, and obtain an import quota if both of the following
conditions are met:
(a) The person purchases scheduled listed chemical products at
retail and imports them for personal use, by means of shipping through
any private or commercial carrier or the Postal Service.
(b) In any 30-day period, the person imports no more than 7.5 grams
of ephedrine base, 7.5 grams of pseudoephedrine base, and 7.5 grams of
phenylpropanolamine base in scheduled listed chemical products.
Sec. 1315.05 Applicability.
This part applies to all of the following:
(a) Persons registered to manufacture (including repackaging or
relabeling) or to import ephedrine, pseudoephedrine, or
phenylpropanolamine as bulk chemicals.
(b) Persons registered to manufacture (including repackaging or
relabeling) or
[[Page 37449]]
to import prescription and over-the-counter drug products containing
ephedrine, pseudoephedrine, or phenylpropanolamine that may be lawfully
marketed and distributed in the United States under the Federal Food,
Drug, and Cosmetic Act.
Subpart B--Assessment of Annual Needs
Sec. 1315.11 Assessment of annual needs.
(a) The Administrator shall determine the total quantity of
ephedrine, pseudoephedrine, and phenylpropanolamine, including drug
products containing ephedrine, pseudoephedrine, and
phenylpropanolamine, necessary to be manufactured and imported during
the following calendar year to provide for the estimated medical,
scientific, research, and industrial needs of the United States, for
lawful export requirements, and for the establishment and maintenance
of reserve stocks.
(b) In making his determinations, the Administrator shall consider
the following factors:
(1) Total net disposal of the chemical by all manufacturers and
importers during the current and 2 preceding years;
(2) Trends in the national rate of net disposal of each chemical;
(3) Total actual (or estimated) inventories of the chemical and of
all substances manufactured from the chemical, and trends in inventory
accumulation;
(4) Projected demand for each chemical as indicated by procurement
and import quotas requested pursuant to Sec. 1315.32; and
(5) Other factors affecting medical, scientific, research, and
industrial needs in the United States, lawful export requirements, and
the establishment and maintenance of reserve stocks, as the
Administrator finds relevant, including changes in the currently
accepted medical use in treatment with the chemicals or the substances
which are manufactured from them, the economic and physical
availability of raw materials for use in manufacturing and for
inventory purposes, yield and stability problems, potential disruptions
to production (including possible labor strikes), and recent unforeseen
emergencies such as floods and fires.
(c) The Administrator shall, on or before May 1 of each year,
publish in the Federal Register, general notice of an assessment of
annual needs for ephedrine, pseudoephedrine, and phenylpropanolamine
determined by him under this section. A notice of the publication shall
be mailed simultaneously to each person registered to manufacture or
import the chemical.
(d) The Administrator shall permit any interested person to file
written comments on or objections to the proposed assessment of annual
needs and shall designate in the notice the time during which the
filings may be made.
(e) The Administrator may, but is not required to, hold a public
hearing on one or more issues raised by the comments and objections
filed with him. In the event the Administrator decides to hold such a
hearing, he shall publish a notice of the hearing in the Federal
Register. The notice shall summarize the issues to be heard and set the
time for the hearing, which shall not be less than 30 days after the
date of publication of the notice.
(f) After consideration of any comments or objections, or after a
hearing if one is ordered by the Administrator, the Administrator shall
issue and publish in the Federal Register the final order determining
the assessment of annual needs for the chemicals. The order shall
include the findings of fact and conclusions of law upon which the
order is based. The order shall specify the date on which it shall take
effect. A notice of the publication shall be mailed simultaneously to
each person registered as a manufacturer or importer of the chemical.
Sec. 1315.13 Adjustments of the assessment of annual needs.
(a) The Administrator may at any time increase or reduce the
assessment of annual needs for ephedrine, pseudoephedrine, or
phenylpropanolamine that has been previously fixed pursuant to Sec.
1315.11.
(b) In determining to adjust the assessment of annual needs, the
Administrator shall consider the following factors:
(1) Changes in the demand for that chemical, changes in the
national rate of net disposal of the chemical, and changes in the rate
of net disposal of the chemical by registrants holding individual
manufacturing or import quotas for that chemical;
(2) Whether any increased demand for that chemical, the national
and/or changes in individual rates of net disposal of that chemical are
temporary, short term, or long term;
(3) Whether any increased demand for that chemical can be met
through existing inventories, increased individual manufacturing
quotas, or increased importation, without increasing the assessment of
annual needs, taking into account production delays and the probability
that other individual manufacturing quotas may be suspended pursuant to
Sec. 1315.24(b);
(4) Whether any decreased demand for that chemical will result in
excessive inventory accumulation by all persons registered to handle
that chemical (including manufacturers, distributors, importers, and
exporters), notwithstanding the possibility that individual
manufacturing quotas may be suspended pursuant to Sec. 1315.24(b) or
abandoned pursuant to Sec. 1315.27;
(5) Other factors affecting medical, scientific, research,
industrial, and importation needs in the United States, lawful export
requirements, and reserve stocks, as the Administrator finds relevant,
including changes in the currently accepted medical use in treatment
with the chemical or the substances that are manufactured from it, the
economic and physical availability of raw materials for use in
manufacturing and for inventory purposes, yield and stability problems,
potential disruptions to production (including possible labor strikes),
and recent unforeseen emergencies such as floods and fires.
(c) In the event that the Administrator determines to increase or
reduce the assessment of annual needs for a chemical, the Administrator
shall publish in the Federal Register general notice of an adjustment
in the assessment of annual needs for that chemical as determined under
this section. A notice of the publication shall be mailed
simultaneously to each person registered as a manufacturer or importer
of the chemical.
(d) The Administrator shall permit any interested person to file
written comments on or objections to the proposal and shall designate
in the notice the time during which such filings may be made.
(e) The Administrator may, but is not required to, hold a public
hearing on one or more issues raised by the comments and objections
filed with him. In the event the Administrator decides to hold such a
hearing, he shall publish a notice of the hearing in the Federal
Register. The notice shall summarize the issues to be heard and set the
time for the hearing, which shall not be less than 10 days after the
date of publication of the notice.
(f) After consideration of any comments or objections, or after a
hearing if one is ordered by the Administrator, the Administrator shall
issue and publish in the Federal Register the final order determining
the assessment of annual needs for the chemical. The order shall
include the
[[Page 37450]]
findings of fact and conclusions of law upon which the order is based.
The order shall specify the date on which it shall take effect. A
notice of the publication shall be mailed simultaneously to each person
registered as a manufacturer or importer of the chemical.
Subpart C--Individual Manufacturing Quotas
Sec. 1315.21 Individual manufacturing quotas.
The Administrator shall, on or before July 1 of each year, fix for
and issue to each person registered to manufacture in bulk ephedrine,
pseudoephedrine, or phenylpropanolamine who applies for a manufacturing
quota an individual manufacturing quota authorizing that person to
manufacture during the next calendar year a quantity of that chemical.
Any manufacturing quota fixed and issued by the Administrator is
subject to his authority to reduce or limit it at a later date pursuant
to Sec. 1315.26 and to his authority to revoke or suspend it at any
time pursuant to Sec. Sec. 1301.36, 1309.43, 1309.44, or 1309.45 of
this chapter.
Sec. 1315.22 Procedure for applying for individual manufacturing
quotas.
Any person who is registered to manufacture ephedrine,
pseudoephedrine, or phenylpropanolamine and who desires to manufacture
a quantity of the chemical must apply on DEA Form 189 for a
manufacturing quota for the quantity of the chemical. Copies of DEA
Form 189 may be obtained from the Office of Diversion Control Web site,
and must be filed (on or before April 1 of the year preceding the
calendar year for which the manufacturing quota is being applied) with
the Drug & Chemical Evaluation Section, Drug Enforcement
Administration, Department of Justice, Washington, DC 20537. A separate
application must be made for each chemical desired to be manufactured.
The applicant must state the following:
(a) The name and DEA Chemical Code Number, as set forth in part
1310 of this chapter, of the chemical.
(b) For the chemical in each of the current and preceding 2
calendar years,
(1) The authorized individual manufacturing quota, if any;
(2) The actual or estimated quantity manufactured;
(3) The actual or estimated net disposal;
(4) The actual or estimated inventory allowance pursuant to Sec.
1315.24; and
(5) The actual or estimated inventory as of December 31.
(c) For the chemical in the next calendar year,
(1) The desired individual manufacturing quota; and
(2) Any additional factors that the applicant finds relevant to the
fixing of the individual manufacturing quota, including any of the
following:
(i) The trend of (and recent changes in) the applicant's and the
national rates of net disposal.
(ii) The applicant's production cycle and current inventory
position.
(iii) The economic and physical availability of raw materials for
use in manufacturing and for inventory purposes.
(iv) Yield and stability problems.
(v) Potential disruptions to production (including possible labor
strikes).
(vi) Recent unforeseen emergencies such as floods and fires.
Sec. 1315.23 Procedure for fixing individual manufacturing quotas.
(a) In fixing individual manufacturing quotas for ephedrine,
pseudoephedrine, and phenylpropanolamine, the Administrator shall
allocate to each applicant who is currently manufacturing the chemical
a quota equal to 100 percent of the estimated net disposal of that
applicant for the next calendar year, adjusted--
(1) By the amount necessary to increase or reduce the estimated
inventory of the applicant on December 31 of the current year to his
estimated inventory allowance for the next calendar year, pursuant to
Sec. 1315.24, and
(2) By any other factors which the Administrator deems relevant to
the fixing of the individual manufacturing quota of the applicant,
including:
(i) The trend of (and recent changes in) the applicant's and the
national rates of net disposal,
(ii) The applicant's production cycle and current inventory
position,
(iii) The economic and physical availability of raw materials for
use in manufacturing and for inventory purposes,
(iv) Yield and stability problems,
(v) Potential disruptions to production (including possible labor
strikes), and
(vi) Recent unforeseen emergencies such as floods and fires.
(b) In fixing individual manufacturing quotas for a chemical, the
Administrator shall allocate to each applicant who is not currently
manufacturing the chemical a quota equal to 100 percent of the
reasonably estimated net disposal of that applicant for the next
calendar year, as determined by the Administrator, adjusted--
(1) By the amount necessary to provide the applicant his estimated
inventory allowance for the next calendar year, pursuant to Sec.
1315.24; and
(2) By any other factors which the Administrator deems relevant to
the fixing of the individual manufacturing quota of the applicant,
including any of the following:
(i) The trend of (and recent changes in) the national rate of net
disposal.
(ii) The applicant's production cycle and current inventory
position.
(iii) The economic and physical availability of raw materials for
use in manufacturing and for inventory purposes.
(iv) Yield and stability problems.
(v) Potential disruptions to production (including possible labor
strikes).
(vi) Recent unforeseen emergencies such as floods and fires.
(c) On or before March 1 of each year the Administrator shall
adjust the individual manufacturing quota allocated for that year to
each applicant in paragraph (a) of this section by the amount necessary
to increase or reduce the actual inventory of the applicant to December
31 of the preceding year to his estimated inventory allowance for the
current calendar year, pursuant to Sec. 1315.24.
Sec. 1315.24 Inventory allowance.
(a) For the purpose of determining individual manufacturing quotas
pursuant to Sec. 1315.23, each registered manufacturer shall be
allowed as a part of the quota an amount sufficient to maintain an
inventory equal to either of the following:
(1) For current manufacturers, 50 percent of his average estimated
net disposal for the current calendar year and the last preceding
calendar year; or
(2) For new manufacturers, 50 percent of his reasonably estimated
net disposal for the next calendar year as determined by the
Administrator.
(b) During each calendar year each registered manufacturer shall be
allowed to maintain an inventory of a chemical not exceeding 65 percent
of his estimated net disposal of that chemical for that year, as
determined at the time his quota for that year was determined. At any
time the inventory of a chemical held by a manufacturer exceeds 65
percent of his estimated net disposal, his quota for that chemical is
automatically suspended and shall remain suspended until his inventory
is less than 60 percent of his estimated net disposal. The
Administrator may, upon application and for good cause shown, permit a
manufacturer whose quota is,
[[Page 37451]]
or is likely to be, suspended under this paragraph to continue
manufacturing and to accumulate an inventory in excess of 65 percent of
his estimated net disposal, upon such conditions and within such
limitations as the Administrator may find necessary or desirable.
(c) If, during a calendar year, a registrant has manufactured the
entire quantity of a chemical allocated to him under an individual
manufacturing quota, and his inventory of that chemical is less than 40
percent of his estimated net disposal of that chemical for that year,
the Administrator may, upon application pursuant to Sec. 1315.25,
increase the quota of such registrant sufficiently to allow restoration
of the inventory to 50 percent of the estimated net disposal for that
year.
Sec. 1315.25 Increase in individual manufacturing quotas.
(a) Any registrant who holds an individual manufacturing quota for
a chemical may file with the Administrator an application on DEA Form
189 for an increase in the registrant's quota to meet the registrant's
estimated net disposal, inventory, and other requirements during the
remainder of that calendar year.
(b) The Administrator, in passing upon a registrant's application
for an increase in the individual manufacturing quota, shall take into
consideration any occurrences since the filing of the registrant's
initial quota application that may require an increased manufacturing
rate by the registrant during the balance of the calendar year. In
passing upon the application the Administrator may also take into
consideration the amount, if any, by which his determination of the
total quantity for the chemical to be manufactured under Sec. 1315.11
exceeds the aggregate of all the individual manufacturing quotas for
the chemical, and the equitable distribution of such excess among other
registrants.
Sec. 1315.26 Reduction in individual manufacturing quotas.
The Administrator may at any time reduce an individual
manufacturing quota for a chemical that he has previously fixed to
prevent the aggregate of the individual manufacturing quotas and import
quotas outstanding or to be granted from exceeding the assessment of
annual needs that has been established for that chemical pursuant to
Sec. 1315.11, as adjusted pursuant to Sec. 1315.13. If a quota
assigned to a new manufacturer pursuant to Sec. 1315.23(b), or if a
quota assigned to any manufacturer is increased pursuant to Sec.
1315.24(c), or if an import quota issued to an importer pursuant to
Sec. 1315.34, causes the total quantity of a chemical to be
manufactured and imported during the year to exceed the assessment of
annual needs that has been established for that chemical pursuant to
Sec. 1315.11, as adjusted pursuant to Sec. 1315.13, the Administrator
may proportionately reduce the individual manufacturing quotas and
import quotas of all other registrants to keep the assessment of annual
needs within the limits originally established, or, alternatively, the
Administrator may reduce the individual manufacturing quota of any
registrant whose quota is suspended pursuant to Sec. 1315.24(b) or
Sec. Sec. 1301.36, 1309.43, 1309.44, or 1309.45 of this chapter or is
abandoned pursuant to Sec. 1315.27.
Sec. 1315.27 Abandonment of quota.
Any manufacturer assigned an individual manufacturing quota for a
chemical pursuant to Sec. 1315.23 may at any time abandon his right to
manufacture all or any part of the quota by filing with the Drug &
Chemical Evaluation Section a written notice of the abandonment,
stating the name and DEA Chemical Code Number, as set forth in part
1310 of this chapter, of the chemical and the amount which he has
chosen not to manufacture. The Administrator may, in his discretion,
allocate the amount among the other manufacturers in proportion to
their respective quotas.
Subpart D--Procurement and Import Quotas
Sec. 1315.30 Procurement and import quotas.
(a) To determine the estimated needs for, and to insure an adequate
and uninterrupted supply of, ephedrine, pseudoephedrine, and
phenylpropanolamine the Administrator shall issue procurement and
import quotas.
(b) A procurement quota authorizes a registered manufacturer to
procure and use quantities of each chemical for the following purposes:
(1) Manufacturing the bulk chemical into dosage forms.
(2) Manufacturing the bulk chemical into other substances.
(3) Repackaging or relabeling the chemical or dosage forms.
(c) An import quota authorizes a registered importer to import
quantities of the chemical for the following purposes:
(1) Distribution of the chemical to a registered manufacturer that
has a procurement quota for the chemical.
(2) Other distribution of the chemical consistent with the
legitimate medical and scientific needs of the United States.
Sec. 1315.32 Obtaining a procurement quota.
(a) Any person who is registered to manufacture ephedrine,
pseudoephedrine, or phenylpropanolamine, or whose requirement of
registration is waived pursuant to Sec. 1309.24 of this chapter, and
who desires to use during the next calendar year any ephedrine,
pseudoephedrine, or phenylpropanolamine for purposes of manufacturing
(including repackaging or relabeling), must apply on DEA Form 250 for a
procurement quota for the chemical. A separate application must be made
for each chemical desired to be procured or used.
(b) The applicant must state separately all of the following:
(1) Each purpose for which the chemical is desired.
(2) The quantity desired for each purpose during the next calendar
year.
(3) The quantities used and estimated to be used, if any, for that
purpose during the current and preceding 2 calendar years.
(c) If the purpose is to manufacture the chemical into dosage form,
the applicant must state the official name, common or usual name,
chemical name, or brand name of that form. If the dosage form produced
is a controlled substance listed in any schedule, the applicant must
also state the schedule number and National Drug Code Number, of the
substance.
(d) If the purpose is to manufacture another chemical, the
applicant must state the official name, common or usual name, chemical
name, or brand name of the substance and the DEA Chemical Code Number,
as set forth in part 1310 of this chapter.
(e) DEA Form 250 must be filed on or before April 1 of the year
preceding the calendar year for which the procurement quota is being
applied. Copies of DEA Form 250 may be obtained from the Office of
Diversion Control Web site, and must be filed with the Drug & Chemical
Evaluation Section, Drug Enforcement Administration, Department of
Justice, Washington, DC 20537.
(f) The Administrator shall, on or before July 1 of the year
preceding the calendar year during which the quota shall be effective,
issue to each qualified applicant a procurement quota authorizing him
to procure and use:
(1) All quantities of the chemical necessary to manufacture
products that the applicant is authorized to manufacture pursuant to
Sec. 1315.23; and
[[Page 37452]]
(2) Such other quantities of the chemical as the applicant has
applied to procure and use and are consistent with his past use, his
estimated needs, and the total quantity of the chemical that will be
produced.
(g) Any person to whom a procurement quota has been issued may at
any time request an adjustment in the quota by applying to the
Administrator with a statement showing the need for the adjustment. The
application must be filed with the Drug & Chemical Evaluation Section,
Drug Enforcement Administration, Department of Justice, Washington, DC
20537. The Administrator shall increase or decrease the procurement
quota of the person if and to the extent that he finds, after
considering the factors enumerated in paragraph (f) of this section and
any occurrences since the issuance of the procurement quota, that the
need justifies an adjustment.
(h) Any person to whom a procurement quota has been issued,
authorizing that person to procure and use a quantity of ephedrine,
pseudoephedrine, or phenylpropanolamine during the current calendar
year, must, at or before the time of placing an order with another
manufacturer or importer requiring the distribution of a quantity of
the chemical, certify in writing to the other registrant that the
quantity of ephedrine, pseudoephedrine, or phenylpropanolamine ordered
does not exceed the person's unused and available procurement quota of
the chemical for the current calendar year. The written certification
must be executed by a person authorized to sign the registration
application pursuant to Sec. 1301.13 or Sec. 1309.32(g) of this
chapter. Registrants must not fill an order from persons required to
apply for a procurement quota under paragraph (b) of this section
unless the order is accompanied by a certification as required under
this section.
(i) The certification required by paragraph (h) of this section
must contain all of the following:
(1) The date of the certification.
(2) The name and address of the registrant to whom the
certification is directed.
(3) A reference to the purchase order number to which the
certification applies.
(4) The name of the person giving the order to which the
certification applies.
(5) The name of the chemical to which the certification applies.
(6) A statement that the quantity (expressed in grams) of the
chemical to which the certification applies does not exceed the unused
and available procurement quota of the chemical, issued to the person
giving the order, for the current calendar year.
(7) The signature of the individual authorized to sign a
certification as provided in paragraph (h) of this section.
Sec. 1315.34 Obtaining an import quota.
(a) Any person who is registered to import ephedrine,
pseudoephedrine, or phenylpropanolamine, or whose requirement of
registration is waived pursuant to Sec. 1309.24(c) of this chapter,
and who desires to import during the next calendar year any ephedrine,
pseudoephedrine, or phenylpropanolamine or drug products containing
these chemicals, must apply on DEA Form 488 for an import quota for the
chemical. A separate application must be made for each chemical desired
to be imported.
(b) The applicant must provide the following information in the
application:
(1) The applicant's name and DEA registration number.
(2) The name and address of a contact person and contact
information (telephone number, fax number, e-mail address).
(3) Name of the chemical and DEA Chemical Code number.
(4) Type of product (bulk or finished dosage forms).
(5) For finished dosage forms, the official name, common or usual
name, chemical name, or brand name, NDC number, and the authority to
market the drug product under the Federal Food, Drug and Cosmetic Act
of each form to be imported.
(6) The amount requested expressed in terms of base.
(7) For the current and preceding two calendar years, expressed in
terms of base:
(i) Distribution/Sales--name, address, and registration number (if
applicable) of each customer and the amount sold.
(ii) Inventory as of December 31 (each form--bulk, in-process,
finished dosage form).
(iii) Acquisition--imports.
(c) For each form of the chemical (bulk or dosage unit), the
applicant must state the quantity desired for import during the next
calendar year.
(d) DEA Form 488 must be filed on or before April 1 of the year
preceding the calendar year for which the import quota is being
applied. Copies of DEA Form 488 may be obtained from the Office of
Diversion Control Web site, and must be filed with the Drug & Chemical
Evaluation Section, Drug Enforcement Administration, Department of
Justice, Washington, DC 20537.
(e) The Administrator may at his discretion request additional
information from an applicant.
(f) On or before July 1 of the year preceding the calendar year
during which the quota shall be effective, the Administrator shall
issue to each qualified applicant an import quota authorizing him to
import:
(1) All quantities of the chemical necessary to manufacture
products that registered manufacturers are authorized to manufacture
pursuant to Sec. 1315.23; and
(2) Such other quantities of the chemical that the applicant has
applied to import and that are consistent with his past imports, the
estimated medical, scientific, and industrial needs of the United
States, the establishment and maintenance of reserve stocks, and the
total quantity of the chemical that will be produced.
Sec. 1315.36 Amending an import quota.
(a) An import quota authorizes the registered importer to import up
to the set quantity of ephedrine, pseudoephedrine, or
phenylpropanolamine and distribute the chemical or drug products on the
DEA Form 488. An importer must apply to change the quantity to be
imported.
(b) Any person to whom an import quota has been issued may at any
time request an increase in the quota quantity by applying to the
Administrator with a statement showing the need for the adjustment. The
application must be filed with the Drug & Chemical Evaluation Section,
Drug Enforcement Administration, Department of Justice, Washington, DC
20537. The Administrator may increase the import quota of the person if
and to the extent that he determines that the approval is necessary to
provide for medical, scientific, or other legitimate purposes regarding
the chemical. The Administrator shall specify a period of time for
which the approval is in effect or shall provide that the approval is
in effect until the Administrator notifies the applicant in writing
that the approval is terminated.
(c) With respect to the application under paragraph (b) of this
section, the Administrator shall approve or deny the application within
60 days of receiving the application. If the Administrator does not
approve or deny the application within 60 days of receiving it, the
application is deemed to be approved and the approval remains in effect
until the Administrator notifies the applicant in writing that the
approval is terminated.
[[Page 37453]]
Subpart E--Hearings
Sec. 1315.50 Hearings generally.
The procedures for the hearing related to assessment of annual
needs or to the issuance, adjustment, suspension, or denial of a
manufacturing, procurement, or import quota are governed generally by
the adjudication procedures set forth in the Administrative Procedure
Act (5 U.S.C. 551-559) and specifically by section 1002 of the Act (21
U.S.C. 952), by Sec. Sec. 1315.52 through 1315.62 of this part, and by
the procedures for administrative hearings under the Act set forth in
Sec. Sec. 1316.41 through 1316.67 of this chapter.
Sec. 1315.52 Purpose of hearing.
(a) The Administrator may, in his sole discretion, hold a hearing
for the purpose of receiving factual evidence regarding any one or more
issues (to be specified by him) involved in the determination or
adjustment of any assessment of national needs.
(b) If requested by a person applying for or holding a procurement,
import, or individual manufacturing quota, the Administrator shall hold
a hearing for the purpose of receiving factual evidence regarding the
issues involved in the issuance, adjustment, suspension, or denial of
the quota to the person, but the Administrator need not hold a hearing
on suspension of a quota under Sec. 1301.36 or Sec. 1309.43 of this
chapter separate from a hearing on the suspension of registration under
that section.
(c) Extensive argument should not be offered into evidence, but
rather presented in opening or closing statements of counsel or in
memoranda or proposed findings of fact and conclusions of law.
Sec. 1315.54 Waiver or modification of rules.
The Administrator or the presiding officer (with respect to matters
pending before him) may modify or waive any rule in this part by notice
in advance of the hearing, if he determines that no party in the
hearing will be unduly prejudiced and the ends of justice will thereby
be served. Such notice of modification or waiver shall be made a part
of the record of the hearing.
Sec. 1315.56 Request for hearing or appearance; waiver.
(a) Any applicant or registrant entitled to a hearing under Sec.
1315.52 and who desires a hearing on the issuance, adjustment,
suspension or denial of a procurement, import, or individual
manufacturing quota must, within 30 days after the date of receipt of
the issuance, adjustment, suspension or denial of the application, file
with the Administrator a written request for a hearing in the form
prescribed in Sec. 1316.47 of this chapter.
(b) Any interested person who desires a hearing on the
determination of an assessment of annual needs must, within the time
prescribed in Sec. 1315.11(c), file with the Administrator a written
request for a hearing in the form prescribed in Sec. 1316.47 of this
chapter, including in the request a statement of the grounds for the
hearing.
(c) Any interested person who desires to participate in a hearing
on the determination or adjustment of an assessment of annual needs,
which hearing is ordered by the Administrator under Sec. 1315.11(c) or
Sec. 1315.13(c), may do so by filing with the Administrator, within 30
days of the date of publication of notice of the hearing in the Federal
Register, a written notice of his intention to participate in the
hearing in the form prescribed in Sec. 1316.48 of this chapter.
(d) Any person entitled to a hearing under Sec. 1315.52 or
entitled to participate in a hearing under paragraph (c) of this
section may, within the period permitted for filing a request for a
hearing or notice of appearance, file with the Administrator a waiver
of an opportunity for a hearing, together with a written statement
regarding his position on the matters of fact and law involved in such
hearing. The statement, if admissible, shall be made a part of the
record and shall be considered in light of the lack of opportunity for
cross-examination in determining the weight to be attached to matters
of fact asserted.
(e) If any person entitled to a hearing under Sec. 1315.52 or
entitled to participate in a hearing under paragraph (c) of this
section fails to file a request for a hearing or notice of appearance
or if he so files and fails to appear at the hearing, he shall be
deemed to have waived his opportunity for the hearing unless he shows
good cause for such failure.
(f) If all persons entitled to a hearing or to participate in a
hearing waive or are deemed to waive their opportunity for the hearing
or to participate in the hearing, the Administrator may cancel the
hearing, if scheduled, and issue his final order under Sec. 1315.62
without a hearing.
Sec. 1315.58 Burden of proof.
(a) At any hearing regarding the determination or adjustment of an
assessment of annual needs each interested person participating in the
hearing shall have the burden of proving any propositions of fact or
law asserted by him in the hearing.
(b) At any hearing regarding the issuance, adjustment, suspension,
or denial of a procurement, import, or individual manufacturing quota,
the Administration shall have the burden of proving that the
requirements of this part for such issuance, adjustment, suspension, or
denial are satisfied.
Sec. 1315.60 Time and place of hearing.
(a) If any applicant or registrant requests a hearing on the
issuance, adjustment, suspension, or denial of his procurement, import,
or individual manufacturing quota under Sec. 1315.54, the
Administrator shall hold a hearing.
(b) Notice of the hearing shall be given to the applicant or
registrant of the time and place at least 30 days prior to the hearing,
unless the applicant or registrant waives such notice and requests the
hearing be held at an earlier time, in which case the Administrator
shall fix a date for such hearing as early as reasonably possible.
(c) The hearing shall commence at the place and time designated in
the notice given under paragraph (b) of this section or in the notice
of hearing published in the Federal Register pursuant to Sec.
1315.11(c) or Sec. 1315.13(c), but thereafter it may be moved to a
different place and may be continued from day to day or recessed to a
later day without notice other than announcement by the presiding
officer at the hearing.
Sec. 1315.62 Final order.
As soon as practicable after the presiding officer has certified
the record to the Administrator, the Administrator shall issue his
order on the determination or adjustment of the assessment of annual
needs or on the issuance, adjustment, suspension, or denial of the
procurement, import, or individual manufacturing quota, as the case may
be. The order shall include the findings of fact and conclusions of law
upon which the order is based. The order shall specify the date on
which it shall take effect. The Administrator shall serve one copy of
his order upon each party in the hearing.
Dated: June 19, 2007.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E7-13377 Filed 7-9-07; 8:45 am]
BILLING CODE 4410-09-P