[Federal Register: January 18, 2008 (Volume 73, Number 13)]
[Proposed Rules]
[Page 3432-3441]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18ja08-20]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Part 1309
[Docket No. DEA-294P]
RIN 1117-AB09
Registration Requirements for Importers and Manufacturers of
Prescription Drug Products Containing Ephedrine, Pseudoephedrine, or
Phenylpropanolamine
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Combat Methamphetamine Epidemic Act of 2005 (CMEA), which
was enacted on March 9, 2006, requires DEA to establish an assessment
of annual need for the importation and manufacture of ephedrine,
pseudoephedrine, and phenylpropanolamine. Because of the new CMEA
mandates for importation, import quotas, and production quotas for
these chemicals, DEA must revise its registration provisions. The
changes made by the CMEA render current DEA regulations inadequate for
two reasons. First, although DEA registers bulk manufacturers of the
three chemicals in the United States and importers of the bulk
chemicals, some of those chemicals are distributed to non-registered
companies that process them into prescription drugs. Under the
Controlled Substances Act, section 826, production quotas are available
only to registered manufacturers. DEA cannot meet the CMEA mandate to
establish annual need and import quotas, and then issue individual
quotas for each of the chemicals unless all manufacturers manufacturing
or procuring the chemicals and manufacturing drug products that contain
the chemicals are registered as manufacturers, even if the distribution
of the final drug products is not regulated. DEA also must know the
quantity of prescription drug products containing the three chemicals
being imported. Without this information, DEA would not be able to
determine an assessment of annual need for these chemicals. Any person
importing prescription drug products containing any of the three
chemicals must register although the distribution of these products
would not be subject to DEA regulation.
Second, persons currently registered to import, distribute, or
dispense controlled substances who manufacture drug products using
ephedrine, pseudoephedrine, or phenylpropanolamine, are not necessarily
registered to do so. This must also be changed so that controlled
substance registrants will only receive a waiver from the requirement
of separate chemical registration if they engage in the same activity
for both lawfully marketed drug products containing List I chemicals
and controlled substances (as is already the case for bulk manufacture,
imports, and exports.) In this way, any registrant that must obtain a
quota to manufacture or procure one or more of the chemicals will be a
registered manufacturer, as required by the CSA.
Were DEA not to issue this rule, it would have no mechanism to
issue production or import quotas for persons handling prescription
drug products containing ephedrine, pseudoephedrine, or
phenylpropanolamine. If these persons were not required to register,
there would be no mechanism by which they would be permitted to apply
for production or import quotas. Therefore, these persons would have no
means by which to acquire the List I chemicals ephedrine,
pseudoephedrine, or phenylpropanolamine necessary for them to conduct
business.
Accordingly, DEA is proposing to amend its registration regulations
to ensure that every location that manufactures or imports one of these
chemicals or drug products that contain ephedrine, pseudoephedrine, or
phenylpropanolamine is a DEA registered manufacturer or importer. These
amendments will make it possible to establish the system of quotas and
assessment of annual needs for the manufacturing that Congress
[[Page 3433]]
mandated for ephedrine, pseudoephedrine, and phenylpropanolamine.
DATES: Written comments must be postmarked, and electronic comments
must be sent, on or before March 18, 2008.
ADDRESSES: To ensure proper handling of comments, please reference
``Docket No. DEA-204'' on all written and electronic correspondence.
Written comments being sent via regular mail should be sent to the
Deputy Assistant Administrator, Office of Diversion Control, 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 formats 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 and in the Drug
Enforcement Administration's public docket. 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 or made available in the public docket, 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 or made available
in the public docket 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 or made available
in the public docket, 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 online or made available in the
public docket.
Personal identifying information and confidential business
information identified and located as set forth above will be redacted
and the comment, in redacted form, will be posted online and placed in
the Drug Enforcement Administration's public docket file. If you wish
to inspect the agency's public docket file in person by appointment,
please see the FOR FURTHER INFORMATION CONTACT paragraph.
FOR FURTHER INFORMATION CONTACT: Mark W. Caverly, Chief, Liaison and
Policy Section, Office of Diversion Control, Drug Enforcement
Administration, Washington DC 20537 at (202) 307-7297.
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, and industrial purposes and to deter the diversion of
controlled substances to illegal purposes. The CSA mandates that DEA
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). Much of
CMEA is self-implementing; the provisions related to importation of
ephedrine, pseudoephedrine, and phenylpropanolamine, import quotas,
manufacturing quotas, and procurement quotas became effective on March
9, 2006.
CMEA Requirements and Impact on Registration
CMEA amended the CSA to include ephedrine, pseudoephedrine, and
phenylpropanolamine in 21 U.S.C. 826 (Production quotas for controlled
substances) and section 952(a) (Importation of controlled substances).
Congress essentially imposed the same requirements for importation of
ephedrine, pseudoephedrine, and phenylpropanolamine as are imposed on
narcotic raw materials--crude opium, poppy straw, concentrate of poppy
straw, and coca leaves. That is, imports of ephedrine, pseudoephedrine,
and phenylpropanolamine are prohibited except for such amounts as the
Attorney General (DEA by delegation) finds to be necessary to provide
for medical, scientific, or other legitimate purposes. Congress also
imposed the same requirements on the manufacture of ephedrine,
pseudoephedrine, and phenylpropanolamine as are established for
Schedule I and II controlled substances. That is, Congress mandated the
establishment of a total need for ephedrine, pseudoephedrine, and
phenylpropanolamine to be manufactured each 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. These requirements
apply equally to products containing these three List I chemicals as
they do to the List I chemicals themselves.
Controlled substances are subject to a closed system of controls
that ensures that no person may manufacture, distribute, import,
export, or dispense unless that person is a DEA registrant, or exempted
from the requirement of registration. Production of Schedule I and II
controlled substances is limited to the quantity that DEA has
determined is required to meet the legitimate medical, scientific,
research, and industrial needs of the United States; for
[[Page 3434]]
lawful export requirements; and for establishment and maintenance of
reserve stocks (21 U.S.C. 826(a)). After DEA establishes the total
annual need, DEA issues individual manufacturing and procurement quotas
to manufacturers; under section 826, quotas may be issued only to
registered manufacturers. Manufacturers may not produce or purchase
more of a substance than is available under their individual quotas.
Under the CSA, ``manufacture'' is defined to include all of the
following:
The manufacturing of a substance or chemical in bulk,
either by extraction from raw materials, chemical synthesis, or a
combination of extraction and chemical synthesis.
The processing of the substance or chemical into products,
such as drugs in dosage form.
The packaging or repackaging of the processed substances
or chemicals or labeling or relabeling of containers holding the
chemicals.
Until the passage of CMEA, chemical importers were required to
notify DEA of imports of ephedrine, pseudoephedrine, and
phenylpropanolamine before or at the time of importation under 21
U.S.C. 971. DEA had no authority to limit the importation or
manufacture of ephedrine, pseudoephedrine, and phenylpropanolamine,
except the ability to suspend a proposed import under 21 U.S.C. 971 on
the ground that it may be diverted to the clandestine manufacture of a
controlled substance. Most of the ephedrine, pseudoephedrine, and
phenylpropanolamine used in the United States is imported rather than
manufactured domestically, although at least one company in the United
States manufactures the chemicals in bulk. The three chemicals are used
to produce drug products lawfully marketed under the Federal Food, Drug
and Cosmetic Act (FFD&CA), many of which are prescription drugs. DEA
has not subjected these prescription drug products to all List I
chemical regulatory requirements because they are available only in
response to a prescription and are stored in and dispensed at
pharmacies. These chemicals are also used in over-the-counter (OTC)
drug products (lawfully marketed under the FFD&CA). These products have
been widely used in the illegal manufacture of methamphetamine and
amphetamine. CMEA defined these OTC drug products as scheduled listed
chemical products. DEA has regulated the distribution, import, and
export of scheduled listed chemical products.
DEA, in 1995, first imposed registration requirements on firms that
manufacture, distribute, import, and export List I chemicals. Although
section 822 of the CSA states that any person who manufactures or
distributes a controlled substance or List I chemical must register
with DEA, DEA limited chemical registration for manufacturers to firms
that manufacture to distribute List I chemicals. Some manufacturers
were not required to register under the ``manufacture for
distribution'' policy. Those that manufactured and chemically consumed
and transformed all of the chemical in their own processes; those that
purchased List I chemicals in bulk and manufactured prescription drug
products that contain a List I chemical; and those that repackaged or
relabeled prescription drug products that contain a List I chemical
were not required to obtain a DEA chemical registration. Firms that
manufacture a List I chemical in bulk and distribute to wholesalers or
to other manufacturers were already required to register and file
reports with DEA. Firms that manufacture scheduled listed chemical
products (nonprescription/OTC drug products containing ephedrine,
pseudoephedrine, or phenylpropanolamine) also distribute those
products, were already required to obtain a DEA chemical registration.
As a consequence of the ``manufacture for distribution'' policy,
firms that manufactured prescription drugs containing ephedrine,
pseudoephedrine, and phenylpropanolamine were not required to register
because distributions of the prescription drug products were not
regulated. DEA, in Sec. 1309.22, listed only four activities involving
List I chemicals that required registration: Retail distributing, non-
retail distributing, importing, and exporting. On the application for
registration form, firms were required to indicate whether they were
seeking to be registered as manufacturers or distributors (e.g.,
wholesalers), but the regulation did not distinguish between those who
manufacture to distribute and those who simply distribute. In addition,
in Sec. 1309.24, DEA waived the chemical distribution registration
requirement for firms that manufacture or distribute drug products
lawfully marketed under the FFD&CA containing the three chemicals for
any firm that is registered to manufacture, distribute, or dispense a
controlled substance. Note that this waiver (from the requirement to
obtain a separate DEA chemical registration) was only provided for drug
products containing a listed chemical which is in final packaged/
labeled form which is lawfully marketed under the FFD&CA. Drug products
not in final packaged/labeled form were not provided this waiver. For
example, an importer of bulk tablets containing a listed chemical,
intended for a drug product marketed in the United States, would still
have to obtain a chemical importer registration, and would not be able
to use their controlled substance registration for such activity.
The waiver does not apply in the reverse; a firm that handles
controlled substances must register for the applicable controlled
substance activity even if it is already registered to conduct the same
activity with List I chemicals.
As a consequence of these decisions, there are firms manufacturing
drug products lawfully marketed under the FFD&CA containing ephedrine,
pseudoephedrine, or phenylpropanolamine that are not registered with
DEA at all because they do not handle controlled substances and the
only products they produce containing the three chemicals are
prescription drugs. There are also firms that manufacture scheduled
listed chemical products, but only distribute or dispense controlled
substances. Because they are registered as controlled substance
distributors or dispensers, they are not currently required to register
as chemical manufacturers. Finally, there may be some firms that are
not registered that import prescription drug products that contain the
three chemicals.
Because of the new CMEA mandates for importation, import quotas,
and production quotas for these chemicals, DEA is proposing to revise
its registration provisions. The changes made by the CMEA render
current DEA regulations inadequate for two reasons. First, although DEA
registers bulk manufacturers of the three chemicals in the United
States and importers of the bulk chemicals, some of those chemicals are
distributed to non-registered companies that process them into
prescription drugs. Under the CSA section 826, production quotas are
available only to registered manufacturers. DEA cannot meet the CMEA
mandate to establish an annual need and import quotas, and then issue
individual quotas for each of the chemicals unless all manufacturers
manufacturing or procuring the chemicals and manufacturing drug
products that contain the chemicals are registered as manufacturers,
even if the distribution of the final drug products is not regulated.
DEA also must know the quantity of prescription drug products
containing the three chemicals being
[[Page 3435]]
imported; without this information, DEA would not be able to determine
an assessment of annual need for the chemicals. Any person importing
prescription drug products containing any of the three chemicals must
register although the distribution of these products would not be
subject to DEA regulation.
The second inadequacy is that the existing language allows a
controlled substance distributor or dispenser to avoid registration as
a chemical manufacturer if they manufacture scheduled listed chemical
products or other products containing a List I chemical that is
described and included in the definition of ``regulated transaction''
in Sec. 1300.02(b)(28)(i)(D). (DEA notes that there may be a limited
number of drug products containing List I chemicals other than
ephedrine, pseudoephedrine, and phenylpropanolamine which meet this
description.) This provision must also be changed so that controlled
substance registrants will not need to obtain a chemical registration
only if they engage in the same activity for both drug products
containing List I chemicals and controlled substances as is already the
case for bulk manufacture, imports, and exports. In this way, any
registrant that must obtain a quota to manufacture or procure one or
more of the chemicals will be a registered manufacturer, as required by
the CSA.
DEA recognizes that this change will require some manufacturers and
locations to register that had not previously been subject to DEA
regulations; other registrants will be required to obtain separate
registrations for chemicals and controlled substances. The proposed new
requirements, however, are both consistent with the statutory language
on registration and the CMEA amendments and with the intent of the CMEA
requirements to establish a system of quotas for the manufacture of
these three chemicals and the products that contain them. Without these
changes, DEA would not be able to meet the CMEA mandates. In addition,
without these changes, companies that manufacture and import
prescription drug products containing the three chemicals would not be
able to purchase the chemicals legally nor would the assessment of
annual needs reflect their requirements.
Explanation of DEA Categories of Registration and Effect of This Rule
Regarding DEA Registration
As noted above, the CSA defines the term ``manufacture'' to include
the physical manufacture of a chemical or product, as well as the
packaging, labeling, repackaging, and relabeling of that product (21
U.S.C. 802(15)).
If this rule is finalized as proposed, persons who manufacture or
import ephedrine, pseudoephedrine, or phenylpropanolamine, or who
manufacture or import a product containing ephedrine, pseudoephedrine,
or phenylpropanolamine, or who plan to engage in such activities, would
be required to register with DEA if they are not already registered for
the appropriate business activity. As required by the CSA, registration
is location-specific; a person must obtain a registration for each
principal place of business at one general physical location where
controlled substances or List I chemicals are handled. If a person
manufactures controlled substances at one location and drug products
containing ephedrine, pseudoephedrine, or phenylpropanolamine at
another location, the person would be required to obtain a separate
registration for each location. Under the waiver previously described
in this rulemaking, persons who are currently registered as controlled
substances manufacturers at a location where drug products containing
these List I chemicals are also manufactured would not be required to
register separately to conduct the same activity, manufacturing, with
these List I chemicals. A controlled substances registration for that
one physical location would cover both the manufacturing of controlled
substances and drug products containing ephedrine, pseudoephedrine, or
phenylpropanolamine, at that location. Controlled substances
manufacturers would, however, be required to identify to DEA the List I
chemicals ephedrine, pseudoephedrine, and phenylpropanolamine they
handle as part of their next registration renewal. DEA notes that the
manufacture of bulk List I chemicals requires a separate chemical
registration; this is not a change from existing regulations.
However, if a person manufactures a drug product containing
ephedrine, pseudoephedrine, or phenylpropanolamine at a location, but
is registered to conduct other (nonmanufacturing) activities with
controlled substances at that location (e.g., distribution), the person
would need to obtain a List I chemical manufacturing registration for
the location. The following table indicates the changes in registration
requirements being proposed for various business activities.
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Current Proposed
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Chemical Manufacturers (No Controlled Substances)
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All bulk manufacturers of List I No change.
chemicals must register unless all of
the chemical produced is consumed
internally and is not available for
use in products.
Manufacturers of scheduled listed All manufacturers of drug
chemical products register if products containing List I
distribute. chemicals * would register.
Manufacturers of prescription products
** containing List I chemicals do not
register..
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Chemical Distributors
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Distributors of List I chemicals and No change.
scheduled listed chemical products
register.
Distributors of prescription products
** containing List I chemicals do not
register..
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Chemical Importers and Exporters
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Importers of List I chemicals and Importers of List I chemicals
scheduled listed chemical products and all drug products
register. containing List I chemicals *
Importers of prescription products ** would register.
containing List I chemicals do not
register..
[[Page 3436]]
Exporters of List I chemicals and No change.
scheduled listed chemical products
register.
Exporters of prescription products **
containing List I chemicals do not
register..
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Manufacturers and Distributors of Controlled Substances and Drug
Products Containing List I Chemicals
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Manufacturers of both controlled No change.
substances and drug products
containing List I chemicals may
register as only controlled substance
manufacturers.
Manufacturers of drug products Manufacturers of drug products
containing any List I chemical * who containing any List I chemical
distribute or dispense controlled * would register as
substances may register for only their manufacturers. If they
controlled substance activity. A distribute or dispense
separate registration for the chemical controlled substances they
activity is permissible. would register separately for
those activities.
Distributors of both controlled No change.
substances and drug products
containing List I chemicals may
register as only controlled substance
distributors.
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Importers/Exporters of Controlled Substances and Drug Products
Containing List I Chemicals
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Importers of both controlled substances No change.
and drug products containing List I
chemicals register as controlled
substance importers.
Exporters of both controlled substances No change.
and drug products containing List I
chemicals register as controlled
substance exporters.
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Manufacturers, Distributors, Importers, and Exporters of Bulk List I
Chemicals
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Manufacturers, distributors, importers, No change.
and exporters of bulk List I chemicals
register, regardless of whether they
handle controlled substances.
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* ``Drug products containing List I chemicals'' refers to scheduled
listed chemical products or other products containing a List I
chemical that is described and included in the definition of
``regulated transaction'' in Sec. 1300.02(b)(28)(i)(D). Such drug
products must be in packaged/labeled form as required under the FFD&CA
for lawful marketing.
** ``Prescription products,'' for purposes of this chart, refers to
``any transaction in a List I chemical that is contained in a drug
that may be marketed or distributed lawfully in the United States
under the Federal Food, Drug, and Cosmetic Act * * *'' (21 U.S.C.
802(39)(a)(iv)). To comply with the marketing and distribution
requirements of the Federal Food, Drug, and Cosmetic Act for
prescription drugs, such drugs must be packaged and labeled in
accordance with the Federal Food, Drug and Cosmetic Act as
prescription drugs.
Proposed Requirements of This Rule
DEA is proposing that a person who manufactures or imports a
prescription drug product containing ephedrine, pseudoephedrine, or
phenylpropanolamine would be required to comply with the following:
Registration. Any person who manufactures or imports a drug product
containing ephedrine, pseudoephedrine, or phenylpropanolamine, or
proposes to engage in the manufacture or importation of a drug product
containing ephedrine, pseudoephedrine, or phenylpropanolamine, would be
required to obtain a registration under the CSA (21 U.S.C. 822 and
958). Regulations describing registration for List I chemical handlers
are set forth in 21 CFR part 1309.
A separate registration is required for manufacturing,
distribution, importing, and exporting, except that a person registered
to manufacture or import a List I chemical or a product containing
ephedrine, pseudoephedrine, or phenylpropanolamine may distribute that
List I chemical or drug product without obtaining a separate
registration to do so. A separate registration is required for each
principal place of business at one general physical location where the
List I chemicals are manufactured, distributed, imported, or exported
by a person (21 CFR 1309.23).
As a result of the change, any person manufacturing or importing a
prescription drug product containing ephedrine, pseudoephedrine, or
phenylpropanolamine would become subject to the registration
requirement under the CSA. DEA recognizes, however, that it is not
possible for persons who would be newly subject to the registration
requirement to complete and submit an application for registration and
for DEA to issue registrations for those activities immediately.
Therefore, to allow continued legitimate commerce, DEA is proposing to
establish in Sec. 1309.25 a temporary exemption from the registration
requirement for persons desiring to engage in manufacturing or
importing prescription drug products containing ephedrine,
pseudoephedrine, or phenylpropanolamine, provided that DEA receives a
properly completed application for registration on or before 30 days
from the date of publication of a Final Rule in the Federal Register.
The temporary exemption for such persons will remain in effect until
DEA takes final action on their application for registration.
The temporary exemption applies solely to the registration
requirement; all other chemical control requirements, including
recordkeeping and reporting, will remain in effect. Additionally, the
temporary exemption does not suspend applicable Federal criminal laws
relating to these chemicals, nor does it supersede State or local laws
or regulations. All manufacturers and importers of ephedrine,
pseudoephedrine, or phenylpropanolamine, or any product containing any
of these three List I chemicals, must comply with applicable State and
local requirements in addition to the CSA regulatory controls.
Importation. All persons importing ephedrine, pseudoephedrine, or
phenylpropanolamine, or drug products containing ephedrine,
pseudoephedrine, or phenylpropanolamine would be required to comply
with all requirements regarding importation.
Records and Reports. The CSA (21 U.S.C. 830) requires certain
records to be kept and reports to be made involving listed chemicals.
Regulations describing recordkeeping and reporting
[[Page 3437]]
requirements are set forth in 21 CFR part 1310. A record must be made
and maintained for two years after the date of a regulated transaction
involving a List I chemical. Each regulated bulk manufacturer of a
regulated mixture must submit manufacturing, inventory, and use data on
an annual basis (21 CFR 1310.05(d)). Bulk manufacturers producing the
chemicals solely for internal consumption are not required to submit
this information; internal consumption does not include using the
chemical to produce drug products. Existing standard industry reports
containing the required information are acceptable, provided the
information is readily retrievable from the report.
Under 21 CFR 1310.05, regulated persons are required to report to
DEA any regulated transaction involving an extraordinary quantity, an
uncommon method of payment or delivery, or any other circumstance that
causes the regulated person to believe that the listed chemical will be
used in violation of the CSA. Regulated persons are also required to
report to DEA any proposed regulated transaction with a person whose
description or other identifying information has been furnished to the
regulated person. Finally, regulated persons are required to report any
unusual or excessive loss or disappearance of a listed chemical.
Security. All applicants and registrants must provide effective
controls against theft and diversion of chemicals as described in 21
CFR 1309.71.
Administrative Inspection. Places, including factories, warehouses,
or other establishments and conveyances, where regulated persons may
lawfully hold, manufacture, distribute, dispense, administer, or
otherwise dispose of ephedrine, pseudoephedrine, or
phenylpropanolamine, or products containing ephedrine, pseudoephedrine,
or phenylpropanolamine, or where records relating to those activities
are maintained, are controlled premises as defined in 21 CFR
1316.02(c). The CSA (21 U.S.C. 880) allows for administrative
inspections of these controlled premises as provided in 21 CFR part
1316, subpart A.
Section by Section Analysis of Proposed Rule Changes
DEA is proposing to amend Sec. Sec. 1309.11 and 1309.12 to replace
``manufacture for distribution'' with ``manufacture.'' In addition, in
both sections, DEA is proposing to remove references to retail
distributors. In amendments to 21 U.S.C. 823(h) the CMEA expressly
stated that distributors of scheduled listed chemical products at
retail are not required to register under the Controlled Substances
Act. To avoid confusion, DEA decided to address all registration
revisions related to CMEA implementation in this rulemaking.
Section 1309.21 is proposed to be revised to state that every
person who manufactures or proposes to manufacture a List I chemical or
a drug product containing a List I chemical must register. The change
would require manufacturers of prescription drug products containing
ephedrine, pseudoephedrine, or phenylpropanolamine to register even
though they are not required to register to distribute or export the
products. DEA is also proposing to add a table to the section, similar
to the table in Sec. 1301.13 on controlled substance registration
requirements, to summarize the requirements for each business activity.
As discussed above, this revision would not alter the registration
requirements for bulk manufacturers of List I chemicals and for
manufacturers of scheduled listed chemical products.
Section 1309.22 is proposed to be revised to remove retail
distributing as a registration activity and to add manufacturing. As
explained above, CMEA explicitly states that retail distributors of
scheduled listed chemical products are not required to register. DEA is
also proposing to add a new paragraph to state that a person registered
to manufacture a List I chemical is authorized to distribute that
chemical under the manufacturing registration. The registrant may not
distribute, under a manufacturer's registration, any List I chemical
that is not covered in the manufacturing registration. This limitation
parallels the existing limitation for importers.
In Sec. 1309.24 paragraph (b) is proposed to be revised to clarify
that a person who manufactures or distributes a scheduled listed
chemical product or other product containing a List I chemical that is
described and included in the definition of ``regulated transaction''
in Sec. 1300.02(b)(28)(i)(D) is exempted from registration only if
registered to conduct the same activity with controlled substances.
Paragraph (c) is proposed to be revised to clarify that a person who
imports or exports a scheduled listed chemical product or other product
containing a List I chemical that is described and included in the
definition of ``regulated transaction'' in Sec. 1300.02(b)(28)(i)(D)
is exempted from registration only if registered to conduct the same
activity with controlled substances. Paragraph (e) waiving registration
for retail distributors is proposed to be removed because CMEA
statutorily does not require them to register. The remaining paragraphs
(f) through (l) would be redesignated (e) through (k). DEA notes that
the waiver of the requirement of registration continues for bulk
manufacturers who manufacture and consume all of the List I chemical
internally.
Regulatory Certifications
Regulatory Flexibility Act
The Deputy Assistant Administrator hereby certifies that this
rulemaking has been drafted in accordance with the provisions of the
Regulatory Flexibility Act (5 U.S.C. 601-612). The Combat
Methamphetamine Epidemic Act of 2005 amended the Controlled Substances
Act to require production quotas for manufacturers handling the List I
chemicals ephedrine, pseudoephedrine, and phenylpropanolamine. CMEA
also authorized the Attorney General (DEA by delegation), to establish
import quotas for ephedrine, pseudoephedrine, and phenylpropanolamine.
The Controlled Substances Act requires that quotas be issued to
registrants. Were DEA not to issue this rule, it would have no
mechanism to permit the registration of persons handling prescription
drug products containing ephedrine, pseudoephedrine, or
phenylpropanolamine. If these persons were not permitted to register,
there would be no mechanism by which they would be permitted to apply
for production or import quotas. Therefore, these persons would have no
means by which to acquire the List I chemicals ephedrine,
pseudoephedrine, or phenylpropanolamine necessary for them to conduct
business.
This rule proposes to codify provisions necessary for
implementation of the Combat Methamphetamine Epidemic Act. As discussed
further below, DEA has examined the potential impacts of this rule. DEA
has no basis for estimating the number of firms that may be small, but
given the definition of small entities, it is likely that a substantial
number of the new registrants will be small. The cost of compliance,
however, would not impose a significant economic burden. The only cost
is the $2,293 registration fee for manufacturers, and the $1,147
registration fee for importers, respectively. The recordkeeping and
reporting requirements can be met using existing business and
manufacturing records. The security provisions are general and require
the registrant to provide effective controls and procedures to guard
against theft and and diversion of List I chemicals. Any
[[Page 3438]]
manufacturer approved by the FDA and complying with good manufacturing
practices or currently registered to handle controlled substances will
have internal controls that meet this requirement. The smallest
pharmaceutical firms (with 1 to 4 employees) had an average value of
shipments of $824,000 in 2002 ($886,000 in 2007 dollars, based on GDP).
Even for these firms, which are unlikely to be producing the covered
drug products, the $2,293 registration fee would represent less than
0.3 percent of sales and, therefore, is not a significant burden.
Therefore, this rule will not have a significant economic impact on a
substantial number of small entities.
Executive Order 12866
The Deputy Assistant Administrator further certifies that this
rulemaking has been drafted in accordance with the principles in
Executive Order 12866 section 1(b). It has been determined that this is
``a significant regulatory action.'' Therefore, this action has been
reviewed by the Office of Management and Budget. As discussed above,
this action is necessary to implement statutory provisions. DEA has,
nonetheless, reviewed the potential costs.
DEA has a limited basis for determining the number of manufacturers
of prescription drug products that will need to obtain a DEA
registration for the first time. DEA reviewed a list of pseudoephedrine
products and ephedrine prescription drug products and identified 230
firms based on their labeler codes. Of all firms identified, 164 do not
appear to be registered with DEA as manufacturers and 95 are not
registered as either manufacturers or controlled substance
distributors. The firms currently registered to manufacture controlled
substances may not manufacture List I chemical drugs at the same
locations. Seventy firms are currently registered as controlled
substance distributors. There may be some firms that import
prescription drug products that are not now registered to import either
controlled substances or List I chemicals. DEA estimates that
approximately 200 firms may have to obtain a new DEA registration. As
noted above, the only cost imposed by the rule is the registration fee
of $2,293 for the registration of each manufacturing location, and
$1,147 for each importing location. The total cost of these rule
changes will be less than $500,000. The cost to individual firms is
relatively small, compared with their revenues. The benefit of the rule
is that it will make it possible for DEA to meet the statutory mandate
to assess the annual need for the chemicals accurately and provide
manufacturers with the quotas they need to continue to produce drug
products containing the three chemicals. As DEA discussed throughout
this rulemaking, the Controlled Substances Act provides that quotas may
only be issued to registrants. Were DEA not to issue this rule, it
would have no mechanism to permit the registration of persons handling
prescription drug products containing ephedrine, pseudoephedrine, or
phenylpropanolamine. If these persons were not permitted to register,
there would be no mechanism by which they would be permitted to apply
for production or import quotas. Therefore, these persons would have no
means by which to acquire the List I chemicals ephedrine,
pseudoephedrine, or phenylpropanolamine necessary for them to conduct
business.
Paperwork Reduction Act
This Notice of Proposed Rulemaking would require that certain
persons who were not previously registered with DEA obtain a
registration to handle the List I chemicals ephedrine, pseudoephedrine,
and phenylpropanolamine. Specifically, persons manufacturing
prescription drug products containing ephedrine, pseudoephedrine, or
phenylpropanolamine were not previously required to register, but now
would be required to obtain a registration so that they may be eligible
to apply for individual quotas for these List I chemicals.
Additionally, importers of prescription drug products containing
ephedrine, pseudoephedrine, or phenylpropanolamine who were not
previously registered as List I chemical importers would be required to
register so that they may be eligible to apply for import quotas for
ephedrine, pseudoephedrine, and phenylpropanolamine. DEA estimates that
approximately 200 firms may have to obtain a new DEA registration. DEA
assumes that these firms complete the registration application
electronically, with each application taking 15 minutes to complete.
The receipt of these additional applications increases the hour burden
by 50 hours annually. Therefore, DEA is proposing to revise an existing
approved information collection, ``Application for Registration under
Domestic Chemical Diversion Control Act of 1993 and Renewal Application
for Registration Under Domestic Chemical Diversion Control Act of
1993'' (OMB 1117-0031), to reflect the increase in population
associated with this rule.
Further, DEA is proposing to amend the forms associated with the
existing approved information collection ``Application for Registration
(DEA Form 225) and Application for Registration Renewal (DEA Form
225a)'' (OMB 1117-0012) to include a listing of all List I
chemicals on the application forms. Currently, controlled substances
registrant applicants, who use these forms to apply for DEA
registration, are not required to identify the List I chemicals they
handle. Without this identification, it is not possible for these
persons to apply for individual quotas for these chemicals. The
addition of the List I chemicals will allow persons to identify which
chemicals they handle. New applicants would be required to identify the
List I chemicals they handle upon their initial application; persons
renewing their registration will identify the chemicals at the time of
their renewal. This information must merely be verified for each
succeeding renewal. Thus, the addition of this list will not have a
measurable effect on the time needed to complete the application.
Therefore, DEA is not proposing to revise the collection itself, but
rather is proposing to make changes only to the application forms
themselves.
The Department of Justice, Drug Enforcement Administration, has
submitted the following information collection request 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 collection is 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 proposed 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 information collection-related aspects of this
rule are encouraged. Your comments should address one or more of the
following four points:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information,
[[Page 3439]]
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 1117-0031
(1) Type of information collection: Revision of an existing
collection.
(2) Title of form/collection: Application for Registration under
Domestic Chemical Diversion Control Act of 1993 and Renewal Application
for Registration Under Domestic Chemical Diversion Control Act of 1993.
(3) Agency form number, if any, and the applicable component of the
Department of Justice sponsoring the collection:
Form Number: DEA Forms 510 and 510a.
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: Not-for-profit, government agencies.
Abstract: The Domestic Chemical Diversion Control Act requires that
manufacturers, distributors, importers, and exporters of List I
chemicals which may be diverted in the United States for the production
of illicit drugs must register with DEA. Registration provides a system
to aid in the tracking of the distribution of 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 2,776 persons respond to this collection annually. DEA estimates
that it takes 30 minutes for an average respondent to respond when
completing the application on paper, and 15 minutes for an average
respondent to respond when completing an application electronically.
This application is submitted annually.
(6) An estimate of the total public burden (in hours) associated
with the collection: DEA estimates that this collection has a public
burden of 927 hours annually.
------------------------------------------------------------------------
Number of Total burden
Form respondents hours
------------------------------------------------------------------------
DEA-510 (paper).............................. 286 143
DEA-510 (electronic)......................... 478 119.5
DEA-510a (paper)............................. 644 322
DEA-510a (electronic)........................ 1,368 342
--------------------------
Total.................................... 2,776 926.5
------------------------------------------------------------------------
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 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 in 21 CFR Part 1309
Administrative practice and procedure; Drug traffic control;
Exports; Imports; Security measures.
For the reasons set out above, 21 CFR part 1309 is proposed to be
amended as follows:
PART 1309--REGISTRATION OF MANUFACTURERS, DISTRIBUTORS, IMPORTERS
AND EXPORTERS OF LIST I CHEMICALS
1. The authority citation for part 1309 continues to read as
follows:
Authority: 21 U.S.C. 821, 822, 823, 824, 830, 871(b), 875, 877,
886a, 958.
2. Section 1309.11 is revised to read as follows:
Sec. 1309.11 Fee amounts.
(a) For each application for registration or reregistration to
manufacture the applicant shall pay an annual fee of $2,293.
(b) For each application for registration or reregistration to
distribute, import, or export a List I chemical, the applicant shall
pay an annual fee of $1,147.
3. Section 1309.12 is revised to read as follows:
Sec. 1309.12 Time and method of payment; refund.
(a) For each application for registration or reregistration to
manufacture, distribute, import, or export, the applicant shall pay the
fee when the application for registration or reregistration is
submitted for filing.
(b) Payments should be made in the form of a credit card; a
personal, certified, or cashier's check; or a money order made payable
to ``Drug Enforcement Administration.'' Payments made in the form of
stamps, foreign currency, or third party endorsed checks will not be
accepted. These application fees are not refundable.
4. Section 1309.21 is revised to read as follows:
Sec. 1309.21 Persons required to register.
(a) Unless exempted by law or under Sec. Sec. 1309.24 through
1309.26, the following persons must annually obtain a registration
specific to the List I chemicals to be handled:
(1) Every person who manufactures or imports or proposes to
manufacture or import a List I chemical or a drug product containing
ephedrine, pseudoephedrine, or phenylpropanolamine.
(2) Every person who distributes or exports or proposes to
distribute or export any List I chemical, other than those List I
chemicals contained in a product exempted under Sec.
1300.02(b)(28)(i)(D) of this chapter.
(b) Only persons actually engaged in the activities are required to
obtain a
[[Page 3440]]
registration; related or affiliated persons who are not engaged in the
activities are not required to be registered. (For example, a
stockholder or parent corporation of a corporation distributing List I
chemicals is not required to obtain a registration.)
(c) The registration requirements are summarized in the following
table:
Summary of Registration Requirements and Limitations
----------------------------------------------------------------------------------------------------------------
Coincident
Business activity Chemicals DEA forms Application Registration activities
fee period (years) allowed
----------------------------------------------------------------------------------------------------------------
Manufacturing................ List I, Drug New--510....... $2,293 1 May distribute
Products Renewal--510a.. 2,293 that chemical
containing for which
ephedrine, registration
pseudoephedrin was issued;
e, may not
phenylpropanol distribute any
amine. chemical for
which not
registered.
Distributing................. List I, New--510....... 1,147 1 ...............
Scheduled Renewal--510a.. 1,147
listed
chemical
products.
Importing.................... List I, Drug New--510....... 1,147 1 May distribute
Products Renewal--510a.. 1,147 that chemical
containing for which
ephedrine, registration
pseudoephedrin was issued;
e, may not
phenylpropanol distribute any
amine. chemical for
which not
registered.
Exporting.................... List I, New--510....... 1,147 1
Scheduled Renewal--510a.. 1,147
listed
chemical
products.
----------------------------------------------------------------------------------------------------------------
5. Section 1309.22 is revised to read as follows:
Sec. 1309.22 Separate registration for independent activities.
(a) The following groups of activities are deemed to be independent
of each other:
(1) Manufacturing of List I chemicals or drug products containing
ephedrine, pseudoephedrine, or phenylpropanolamine.
(2) Distributing of List I chemicals and scheduled listed chemical
products.
(3) Importing List I chemicals or drug products containing
ephedrine, pseudoephedrine, or phenylpropanolamine.
(4) Exporting List I chemicals and scheduled listed chemical
products.
(b) Except as provided in paragraphs (c) and (d) of this section,
every person who engages in more than one group of independent
activities must obtain a separate registration for each group of
activities, unless otherwise exempted by the Act or Sec. Sec. 1309.24
through 1309.26.
(c) A person registered to import any List I chemical shall be
authorized to distribute that List I chemical after importation, but no
other chemical that the person is not registered to import.
(d) A person registered to manufacture any List I chemical shall be
authorized to distribute that List I chemical after manufacture, but no
other chemical that the person is not registered to manufacture.
6. In Sec. 1309.23 paragraph (a) is revised to read as follows:
Sec. 1309.23 Separate registration for separate locations.
(a) A separate registration is required for each principal place of
business at one general physical location where List I chemicals are
manufactured, distributed, imported, or exported by a person.
* * * * *
7. Section 1309.24 is revised to read as follows:
Sec. 1309.24 Waiver of registration requirement for certain
activities.
(a) The requirement of registration is waived for any agent or
employee of a person who is registered to engage in any group of
independent activities, if the agent or employee is acting in the usual
course of his or her business or employment.
(b) The requirement of registration is waived for any person who
manufactures or distributes a scheduled listed chemical product or
other product containing a List I chemical that is described and
included in the definition of ``regulated transaction'' in Sec.
1300.02(b)(28)(i)(D), if that person is registered with the
Administration to engage in the same activity with a controlled
substance.
(c) The requirement of registration is waived for any person who
imports or exports a scheduled listed chemical product or other product
containing a List I chemical that is described and included in the
definition of ``regulated transaction'' in Sec. 1300.02(b)(28)(i)(D),
if that person is registered with the Administration to engage in the
same activity with a controlled substance.
(d) The requirement of registration is waived for any person who
only distributes a prescription drug product containing a List I
chemical that is regulated pursuant to Sec. 1300.02(b)(28)(i)(D) of
this chapter.
(e) The requirement of registration is waived for any person whose
activities with respect to List I chemicals are limited to the
distribution of red phosphorus, white phosphorus, or hypophosphorous
acid (and its salts) to: another location operated by the same firm
solely for internal end-use; or an EPA or State licensed waste
treatment or disposal firm for the purpose of waste disposal.
(f) The requirement of registration is waived for any person whose
distribution of red phosphorus or white phosphorus is limited solely to
residual quantities of chemical returned to the producer, in reusable
rail cars and intermodal tank containers which conform to International
Standards Organization specifications (with capacities greater than or
equal to 2,500 gallons in a single container).
(g) The requirement of registration is waived for any person whose
activities with respect to List I chemicals are limited solely to the
distribution of Lugol's Solution (consisting of 5 percent iodine and 10
percent potassium iodide in an aqueous solution) in original
manufacturer's packaging of one fluid ounce (30 ml) or less.
(h) The requirement of registration is waived for any manufacturer
of a List I chemical, if that chemical is produced solely for internal
consumption by the manufacturer and there is no subsequent distribution
or exportation of the List I chemical.
(i) If any person exempted under paragraph (b), (c), (d), (e), or
(f) of this section also engages in the distribution, importation, or
exportation of a List I chemical, other than as described in such
paragraph, the person shall obtain a registration for the activities,
as required by Sec. 1309.21 of this part.
[[Page 3441]]
(j) The Administrator may, upon finding that continuation of the
waiver would not be in the public interest, suspend or revoke a waiver
granted under paragraph (b), (c), (d), (e), or (f) of this section
pursuant to the procedures set forth in Sec. Sec. 1309.43 through
1309.46 and Sec. Sec. 1309.51 through 1309.55 of this part. In
considering the revocation or suspension of a person's waiver granted
pursuant to paragraph (b) or (c) of this section, the Administrator
shall also consider whether action to revoke or suspend the person's
controlled substance registration pursuant to 21 U.S.C. 824 is
warranted.
(k) Any person exempted from the registration requirement under
this section must comply with the security requirements set forth in
Sec. Sec. 1309.71 through 1309.73 of this part and the recordkeeping
and reporting requirements set forth under parts 1310 and 1313 of this
chapter.
8. Section 1309.25 is amended by adding a new paragraph (c) to read
as follows:
Sec. 1309.25 Temporary exemption from registration for chemical
registration applicants.
* * * * *
(c) Each person required by section 302 of the Act (21 U.S.C. 822)
to obtain a registration to manufacture or import prescription drug
products containing ephedrine, pseudoephedrine, or phenylpropanolamine
is temporarily exempted from the registration requirement, provided
that the person submits a proper application for registration on or
before [DATE 30 DAYS AFTER PUBLICATION OF A FINAL RULE IN THE Federal
Register]. The exemption will remain in effect for each person who has
made such application until DEA has approved or denied the application.
This exemption applies only to registration; all other chemical control
requirements set forth in this part and parts 1310, 1313, and 1315 of
this chapter remain in full force and effect.
Dated: January 11, 2008.
Joseph T. Rannazzisi,
Deputy Assistant Administrator, Office of Diversion Control.
[FR Doc. E8-774 Filed 1-17-08; 8:45 am]
BILLING CODE 4410-09-P