[Federal Register Volume 62, Number 194 (Tuesday, October 7, 1997)]
[Proposed Rules]
[Pages 52294-52304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26150]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Parts 1300, 1309, 1310
[DEA Number 163P]
RIN 1117-AA44
Implementation of the Comprehensive Methamphetamine Control Act
of 1996; Regulation of Pseudoephedrine, Phenylpropanolamine, and
Combination Ephedrine Drug Products and Reports of Certain Transactions
to Nonregulated Persons
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Proposed rule.
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SUMMARY: DEA is proposing amending its regulations to implement the
requirements of the Comprehensive Methamphetamine Control Act of 1996
(MCA) with respect to the regulation of pseudoephedrine,
phenylpropanolamine, and combination ephedrine drug products as List I
chemicals and the reporting of certain transactions involving
pseudoephedrine, phenylpropanolamine, and ephedrine.
The MCA removed the previous exemption from regulation as List I
chemicals which had applied to pseudoephedrine, phenylpropanolamine,
and combination ephedrine drug products.
This action makes persons who distribute the products subject to
the registration requirement. Also, distributions, importations, and
exportations of the products became subject to the existing chemical
controls relating to regulated transactions, except in certain
circumstances specified in the MCA. The MCA also requires that reports
be submitted for certain distributions involving ephedrine,
pseudoephedrine, and phenylpropanolamine (including drug products
containing those chemicals) by Postal Service or private or commercial
carrier to nonregulated persons. This proposed rule amends the
regulations to make them consistent with the language of the MCA and to
establish the specific procedures to be followed to satisfy the new
reporting requirement.
DATES: Written comments or objections should be submitted by no later
than December 8, 1997.
ADDRESSES: Comments and objections should be submitted in quintuplicate
to the Deputy Assistant Administrator, Office of Diversion Control,
Drug Enforcement Administration, Washington, D.C. 20537, Attention: DEA
Federal Register Representative/CCR.
[[Page 52295]]
FOR FURTHER INFORMATION CONTACT:
G. Thomas Gitchel, Chief, Liaison and Policy Section, Office of
Diversion Control, Drug Enforcement Administration, Washington, D.C.
20537, Telephone (202) 307-7297.
SUPPLEMENTARY INFORMATION:
Introduction
The Chemical Diversion and Trafficking Act of 1988 (CDTA) provided
the framework for DEA's programs to control the diversion of the
chemicals that are used in the illegal manufacture of controlled
substances. The chemical control activities under the CDTA focused
primarily on two areas: (1) the export of certain chemicals, mainly
solvents, that are used in the illegal manufacture of cocaine and
heroin, and (2) the domestic distribution of certain chemicals,
principally precursors, that are used in the illegal manufacture of
other dangerous drugs, such as methamphetamine, LSD, PCP, etc.
While the controls under the CDTA were successful in denying the
cocaine traffickers access to U.S. sources of chemicals, a loophole was
exploited by the methamphetamine traffickers. The CDTA contained a
provision that ``. . .any transaction in a listed 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. . .'' was
not subject to the controls of the CDTA. Thus, while the traffickers
found their access to supplies of bulk ephedrine, pseudoephedrine, and
other chemicals restricted by the new chemical controls, they were able
to circumvent the controls and obtain the necessary source material for
manufacturing methamphetamine through the purchase of ephedrine in drug
product form, which remained exempt from the chemical controls.
Since passage of the CDTA, the principal focus of Federal and State
legislative/regulatory activities with respect to domestic chemical
control has been on closing the ``drug product'' loophole that
clandestine methamphetamine manufacturers and traffickers have
exploited.
As noted earlier, with the establishment of controls over
transactions involving bulk pseudoephedrine, ephedrine, and other
chemicals, the methamphetamine traffickers turned to single-entity
ephedrine drug products for their source material. In the years
following the implementation of the CDTA, ephedrine, in drug product
form, became the principal source of methamphetamine precursor
material. By 1993, domestic clandestine laboratory seizure data showed
that 79 percent of the laboratories seized were using ephedrine. During
the same period, the use of phenyl-2-propanone (P2P), also a popular
source material in early laboratories, declined from a high of 31
percent in 1990 to 16 percent in 1993, and the use of pseudoephedrine
as a precursor was virtually non-existent.
The primary source of supply of ephedrine for the traffickers was
from mail order and wholesale distributions of single-entity ephedrine
tablets. One manufacturer of a popular brand of single-entity ephedrine
drug products indicated in interviews with DEA personnel that from
January 1991 through September 1992, the company purchased 35 metric
tons of ephedrine for the manufacture of its drug products. The company
reported that it was producing 40 million 25mg ephedrine tablets per
ton of ephedrine. Based on that figure, the company could manufacture
1.4 billion 25mg ephedrine tablets from the 35 tons of ephedrine
purchased between the beginning of 1991 and September 1992. During the
same period, a rival company purchased 27.5 metric tons of ephedrine,
also for the manufacture of ephedrine tablets. The enormous volume of
product and the lack of controls over its distribution provided the
traffickers with a convenient source of supply.
DEA's initial domestic chemical control efforts focused on stemming
the flow of material from the wholesale/mail order industry to the
traffickers. While some investigations ultimately resulted in
conviction of some of the more eregious violators of the law, DEA and
State efforts were hampered by the exemption from regulation granted to
the drug products, the lack of other controls under the CDTA, such as
registration, and the increasing knowledge of the traffickers and their
suppliers in how to shelter themselves from the criminal sanctions of
the CDTA.
The Domestic Chemical Diversion Control Act of 1993 (DCDCA) was
enacted, in part, to address these shortcomings in the CDTA. Two major
elements in the DCDCA were the removal of the exemption from List I
controls for single-entity ephedrine drug products and establishment of
the registration requirement for distributors, importers, and exporters
of List I chemicals. The DCDCA did establish control of the diversion
of single-entity ephedrine drug products to clandestine laboratories
(combination ephedrine products remained exempt); however, the
traffickers switched to pseudoephedrine drug products, which remained
exempt from chemical controls and are directly interchangeable with
ephedrine drug products in the manufacture of methamphetamine.
Companies that had previously been identified as distributors of large
volumes of single-entity ephedrine drug products became distributors of
large volumes of pseudoephedrine drug products, which has become the
primary source material of choice in clandestine laboratories.
In 1993, the year the DCDCA was passed, ephedrine was identified as
the source material in 79 percent of the methamphetamine laboratories
seized and pseudoephedrine was identified as the source material in
less than 2 percent of the seized laboratories. As is shown in the
following chart, both the number of clandestine laboratories seized and
number of laboratories using pseudoephedrine increased significantly
between 1993 and 1996. In 1996, DEA seized 879 methamphetamine
laboratories, of which 422 were positively identified as using
pseudoephedrine. Of the remainder, there are 246 laboratories for which
analysis of the source material has not yet been received, however it
is anticipated that most, if not all, were using pseudoephedrine. In
all of the identified cases, pseudoephedrine drug products were the
source material.
For 1997, 392 clandestine methamphetamine laboratories have been
seized as of April 30th, as compared to the 327 laboratories that were
seized in all of 1995. At that rate, the total seizures for 1997 could
exceed 1300 methamphetamine laboratories. The dramatic increase in
seizures is due, in part, to the expansion of the methamphetamine
laboratories into the Midwest.
BILLING CODE 4410-09-M
[[Page 52296]]
[GRAPHIC] [TIFF OMITTED] TP07OC97.023
BILLING CODE 4410-09-C
Pseudoephedrine Regulations
By 1995, it had become clear that action would have to be taken to
stem the flow of pseudoephedrine drug products to the clandestine
laboratories. DEA proposed regulations to control certain types of
pseudoephedrine drug products on October 31, 1995 (60 FR 55348),
including reduction of the threshold for pseudoephedrine from 1
kilogram to 24 grams and removal of the exemption from the chemical
controls for certain drug products containing pseudoephedrine. DEA's
proposal limited the controls to those products which could be readily
used for the clandestine manufacture of methamphetamine. The exemption
remained in place for gel capsules, liquids, and solid dosage form
products containing pseudoephedrine in combination with acetaminophen,
aspirin, or ibuprofen in therapeutically significant quantities.
Further, DEA proposed to exempt retail distributors from the
registration requirement if their activities were restricted to sub-
threshold (24 grams) sales of pseudoephedrine drug products. Following
comment, DEA published a Final Rule in the Federal Register on August
7, 1996 (61 FR 40981). In response to comments, the threshold for
pseudoephedrine was raised from the proposed 24 grams to 48 grams and,
for retail distributors, application of the cumulative transaction
provision was lifted.
The Final Rule was scheduled to become effective on October 7,
1996, however, as discussed below, the rule did not go into effect and
was superseded by the provisions of the MCA.
Comprehensive Methamphetamine Control Act of 1996
Paralleling DEA's rulemaking process, the United States Congress,
also concerned with the illicit traffic in methamphetamine, introduced
legislation to control the diversion of chemicals to clandestine
laboratories. The result was the Comprehensive Methamphetamine Control
Act of 1996 (Pub. L. 104-237) (MCA), which was enacted on October 3,
1996. The MCA superseded DEA's Final Rule, discussed above, declaring
that the regulations were ``* * * null and void, and of no force and
effect.'' (MCA, Section 210.)
The MCA legislatively replaced DEA's proposed rulemaking action
with a more comprehensive system of controls relating to the
distribution, importation, and exportation of pseudoephedrine,
phenylpropanolamine, and combination ephedrine drug products, along
with other strong tools to attack the illicit traffic. The MCA retained
the existing Controlled Substances Act (CSA) requirements for
distributors of List I chemicals and added the following changes to the
CSA with respect to regulation of drug products containing these three
chemicals:
Removal of Certain Drug Product Exemptions
The definition of ``regulated transaction'' (21 U.S.C. 802(39)) is
amended in paragraph (A)(iv)(I)(aa) to provide that the exemption for
drug products that contain ephedrine, pseudoephedrine, or
phenylporpanolamine is removed. The new definition also provides that
the sale of ``ordinary over-the-counter
[[Page 52297]]
pseudoephedrine or phenylproanolamine'' products by ``retail
distributors'' shall not be a regulated transaction. The definition is
also amended in paragraph (A)(iv)(II) to provide that the threshold for
the sale of pseudoephedrine or phenylpropanolamine products by a retail
distributor or a distributor required to submit reports by section
310(b)(3) of the CSA (21 U.S.C. 830(b)(3)) shall be 24 grams of
pseudoephedrine base or 24 grams of phenylporpanolamine base in a
single transaction. This threshold does not affect the reports required
to be filed under 21 U.S.C. 830(b)(3) and 21 CFR 1310.03(c),
1310.05(e), and 1310.06(i), as amended herein.
Creation of a New Category of Distributor and Category of Product To
Which Certain Exceptions Apply
Two new definitions are added under section 102 of the CSA (21
U.S.C. 802), as follows:
The term ordinary over-the-counter pseudoephedrine or
phenylpropanolamine product is defined in section 102(45) of the Act
(21 U.S.C. 802(45)) as a product containing pseudoephedrine or
phenylpropanolamine that is regulated pursuant to the CSA and, except
for liquids, packaged with not more than 3 grams of pseudoephedirne or
phenylpropanolamine base per package, contained in blister packs, with
not more than two dosage units per blister, or where the use of blister
packs is not technically feasible, packaged in unit dose packets or
pouches. For liquids, the product is sold in package sizes of not more
than 3 grams of pseudoephedrine or phenylpropanolamine base. In the
context of sales by retail distributors, this has been referred to as
the ``safe harbor'' provision, because of the exemption from the
definition of ``regulated transaction'' in section 102(39) of the Act
(21 U.S.C. 802(39)).
The term retail distributor is defined in section 102(46) of the
Act (21 U.S.C. 802(46)) as a grocery store, general merchandise store,
drug store, or other entity or person whose activities as a distributor
relating to pseudoephefrine or phenylpropanolamine products are limited
almost exclusively to sales for personal use, both in number of sales
and volume of sales, either directly to walk-in customers or in face-
to-face transactions by direct sales. Sale for personal use is defined
by the MCA as the sale of below-threshold quantities in a single
transaction to an individual for legitimate medical use. Further,
certain entities are defined by reference to the following Standard
Industrial Classification (SIC) codes: a grocery store is an entity
within SIC code 5411, a general merchandise store is an entity within
SIC codes 5300 through 5399 and 5499, and a drug store is an entity
within SIC code 5912.
It is worth noting at this point that while the definition of
``retail distributor'' specifically references general merchandise
stores, grocery stores, and drug stores and their respective SIC codes,
it also refers to ``* * * or other entity or person * * *'' who engages
in the described activities. As a result, a retail distributor is any
person (not just a general merchandise store, grocery store, or drug
store) whose activities as a distributor relating to pseudoephedrine or
phenylpropanolamine products are limited almost exclusively to sales
for personal use, both in number of sales and volume of sales, either
directly to walk-in customers or in face-to-face transactions by direct
sales.
Expands the Opportunities for Product Specific Exemptions
The MCA amends the CSA to provide that the exemption with respect
to a particular ephedrine, pseudoephedrine or phenylpropanolamine drug
product shall be reinstated if it is determined that the drug product
is manufactured and distributed in a manner that prevents diversion.
Defines Specific Controls for ``Combination Ephedrine Products''
The MCA defines combination ephedrine product as a drug product
containing ephedrine or its salts, optical isomers, or salts of optical
isomers and therapeutically significant quantities of another active
medicinal ingredient; and establishes a 24-gram single transaction
limit, notwithstanding the form in which the product is packaged, for
sales by retail distributors and by distributors required to submit a
report under section 310(b)(3) of the CSA (21 U.S.C. 830(b)(3)), and a
1-kilogram threshold for transactions by other distributors, importers
and exporters.
Requires Reporting of Certain Distributions by Mail or Carrier
The MCA amends section 310 of the CSA (21 U.S.C. 830) to add a new
paragraph (b)(3), which requires that each regulated person who engages
in a transaction with a nonregulated person (that is, someone who does
not further distribute the product) which involves ephedrine,
pseudoephedrine or phenylpropanolamine, including drug products, and
uses or attempts to use the Postal Service or any private or commercial
carrier shall submit a report of all such transactions each month. The
reports shall reflect the name of the purchaser, the quantity and form
of the ephedrine, pseudoephedrine or phenylpropanolamine purchased, the
address to which the chemicals were shipped, and such other information
as is established by regulation.
Effective Dates
The MCA provides that the requirements with respect to the
regulation of combination ephedrine products and the reporting
requirement became effective on October 3, 1996. The requirements with
respect to pseudoephedrine and phenylpropanolamine products become
effective on October 3, 1997.
Regulatory Changes To Implement the MCA
Many of the legislative details of the MCA are provided in
sufficient detail to be self-implementing without additional
regulation. Thus, many of the regulatory amendments to implement the
MCA are conforming amendments by which the definitions of ``regulated
transaction'' and ``retail distributor'' are updated to parallel the
new language in the MCA and the definitions of 1 ``ordinary over-the-
counter pseudoephedrine or phenylpropanolamine product'' and
``combination ephedrine product'' are inserted in the regulations; 21
CFR 1310.04 is updated to reflect the new record retention period of
two years for List I chemical transactions and the thresholds for
transactions involving regulated drug products; and 21 CFR 1310.04-06
are updated to reflect the new reporting requirement. Finally, 21 CFR
1309.71 is being amended to reflect that in retail settings open to the
public only ephedrine drug products, in both single-entity and
combination form, just be stored behind a counter where only employees
will have access; pseudoephedrine and phenylpropanolamine products are
not required to be kept behind the counter.
In addition to the above amendments, DEA is proposing to amend 21
CFR Part 1309 to consolidate the various exemptions from the
registration requirement into one section, expand the current exemption
for retail distributors of combination ephedrine products to include
retail distributors of pseudoephedrine and phenylpropanolamine
products, and to add a temporary exemption from the registration
requirement for persons who distribute, import, or export
pseudoephedrine or phenylpropanolamine drug products, provided that
they submit an
[[Page 52298]]
application for registration on or before December 3, 1997. Any person
who engages in such activities and is not subject to an existing or
proposed exemption from the registration requirement should submit an
application for registration at the earliest possible time, to ensure
that they may continue to distribute these products pending issuance of
their registration.
Effect of the MCA
While the regulatory changes necessary to implement the MCA are
primarily conforming regulations, the scope of the effect of the MCA's
requirements is quite broad. The removal of the exemption for
pseudoephedrine, phenylpropanolamine, and combination ephedrine drug
products makes any person who distributes, imports, or exports them
subject to the established chemical registration, recordkeeping, and
reporting requirements already in effect for List I chemical handlers,
as set out in 21 CFR parts 1309, 1310, and 1313. The MCA, however,
created an exemption from the existing chemical controls for sales of
ordinary over-the-counter pseudoephedrine and phenylpropanolamine
products by retail distributors. Additionally, following the MCA's
creation within the law of the category of ``retail distributor'', DEA
has provided an exemption from registration for retail distributors
whose activities are limited to the activities provided for by the MCA.
With respect to no-retail distributors, various segments of the
affected distribution industry have offered varying interpretations of
the law, proposing that distributors that only engage in sub-threshold
transactions, or distributors that only supply corporately owned retail
outlets are not subject to registration and concomitant controls. The
CSA requires a registration for activities as a distributor. These two
issues are addressed in the final rulemaking entitled ``Comprehensive
Methamphetamine Control Act of 1996; Possession of List I Chemicals,
Definitions, Record Retention, and Temporary Exemption From Chemical
Registration for Distributors of Combination Ephedrine Products'',
which will by published in the Federal Register on or about October 3,
1997. Interest persons are encouraged to obtain a copy of the final
rule, which contains a detailed discussion of the issues.
Within this framework, importers, exporters, and distributors
(other than retail distributors) of pseudoephedrine and
phenylpropanolamine drug products (including ordinary over-the-counter
pseudoephedrine and phenylpropanolamine products) become subject to the
registration requirement of the MCA on October 3, 1997, and also the
recordkeeping requirements for those transactions that either singly or
cumulatively meet the threshold requirements in a calendar month.
However, the allow for implementation of these regulations and issuance
of the registrations, DEA is providing a temporary exemption from the
registration requirement for persons who submit their applications on
or before December 3, 1997. For combination ephedrine products, the
requirements became effective on October 3, 1996.
Retail distributors of ordinary over-the-counter products are not
subject to the registration, recordkeeping and reporting requirements.
For retail distributors whose sales of other pseudoephedrine and
phenylpropanolamine products, or combination ephedrine products remain
exclusively below the single transaction limit, DEA has established an
exemption from the registration requirement in 21 CFR 1309.29. However,
retail distributors are subject to the registration, recordkeeping, and
reporting requirements to the extent that their transactions equal or
exceed the single transaction limit of 24 grams. Additionally, the
existing provision that any person who is registered with DEA to
distribute or dispense controlled substances is not required to obtain
a separate chemical registration applies to distributions of
pseudoephedrine, phenylpropanolamine, or combination ephedrine
products, as set forth in 21 CFR 1309.25.
They are, however, still subject to the recordkeeping requirements.
Reports of `Mail Order' Transactions
The MCA requires that a regulated person must report, on a monthly
basis, all transactions with non-regulated persons (those persons who
do not redistribute the product) that involve ephedrine,
pseudoephedrine, or phenylpropanolamine (including drug products that
contain these chemicals), and who use or attempt to use the Postal
Service or any private or commercial carrier. Each report must contain
the name of the purchaser, the quantity and form of the material
purchased, and the address to which the material was sent, as well as
such other data as may be established by regulation. MCA, Section 401,
21 U.S.C. 830(b)(3). The language of the requirement clearly
establishes that all persons engaging in any such transactions must
report them. There is no statutory provision for exclusion of any class
of person or transaction from the requirement.
DEA is proposing to amend 21 CFR 1310.03, 1310.05, and 1310.06 to
incorporate the new reporting requirement. Section 1310.03 reflects who
must file, Section 1310.05 reflects when and where the reports shall be
filed, and Section 1310.06 reflects the information the report must
contain.
The MCA requires monthly reports. DEA is proposing that the reports
shall be submitted on or before the 15th day of the month following the
month in which the reportable transaction took place; shall be
submitted to the Drug Enforcement Administration, Office of Diversion
Control, Chemical Operations Section, Washington, D.C. 20537; and shall
contain the following information.
1. Supplier's Name and Registration Number
2. Purchaser's Name and Address
3. Name/Address Shipped To (if different from purchaser's name/
address)
4. Name of the Chemical Shipped
5. Product Name
6. Dosage Form (if any)
7. Dosage Strength (if any)
8. Number of Dosage Units (if applicable)
9. Package Type
10. Package Quantity
11. Lot Number (for drug products)
12. Date of Shipment
As noted earlier, the MCA requires the name of the purchaser (item
2), the quantity and form of the material (items 4-10), and the address
to which the material was shipped (item 3). In addition to the required
information, DEA is proposing to include the supplier name and
registration number (item 1), to identify the person making the report
and their authority to distribute the material; the address of the
purchaser (item 2), to assist in identifying the party; the name of the
person to which the material is shipped (item 3), if different from the
purchaser, to identify the actual recipient of the material in
instances where drop-shipment is requested; the lot number of the
product (item 11), if a drug product, to assist DEA in tracking
products that are diverted; and, the date of the shipment (item 12) to
identify when the specific transaction occurred.
While submission of a hard copy report will be adequate to satisfy
the requirement, DEA is proposing that electronic reporting, initially
via computer disk, also be allowed. Electronic reporting would minimize
the burden by eliminating the time and expense necessary to print,
package, and mail hard copy reports and would allow for more efficient
processing of the data reported. DEA is proposing that persons
interested in submitting reports by
[[Page 52299]]
electronic means contact the Chemical Operations Section, Office of
Diversion Control, DEA at (202) 307-7204 to arrange for submission of
electronic reports.
It is important to keep in mind that the reporting requirement
applies only to distributions of ephedrine, pseudoephedrine, and
phenylpropanolamine via the postal service or private or commercial
carrier to nonregulated persons. A distributor does not have to report
distributions to regulated persons. In this regard, it is critical that
distributors take the appropriate steps to ascertain whether their
customers are regulated or nonregulated persons. The failure of a
distributor to report a transaction based on a customer's mere
representation that they are a regulated person, without further
inquiry to confirm that status, may be grounds for administrative,
civil, or criminal action. Therefore, the distributor should take
appropriate steps to confirm the customer's status as a regulated
person. Steps may include verification of the customer's DEA
registration status or, if they are not a registrant, inquiry as to
whether the products are being obtained solely for use by the customer
or whether they will be distributed to others.
Clarification of MCA and CSA Chemical Control Requirements
The MCA's removal of the exemption for pseudoephedrine,
phenylpropanolamine, and combination ephedrine products makes a new
segment of industry, which is not familiar with DEA's programs and
requirements, subject to the chemical controls under the CSA. DEA has
received numerous contacts from, and engaged in substantial discussions
with, both individual companies and associations regarding the
requirements of the MCA and of the chemical controls under the CSA with
respect to combination ephedrine products. The upcoming control of
pseudoephedrine and phenylpropanolamine products on October 3, 1997,
will probably result in further questions and need for clarification of
the requirements. DEA remains, as always, available to affected persons
to clarify the requirements of the MCA and of the existing chemical
controls. Inquiries should be addressed to DEA in writing to the
attention of: G. Thomas Gitchel, Chief, Liaison and Policy Section,
Office of Diversion Control, Drug Enforcement Administration,
Washington, D.C. 20537.
Small Business Impact and Regulatory Flexibility Concerns
The MCA mandates a system of controls (including registration,
recordkeeping, and reporting) over the distribution, importation, and
exportation of pseudoephedrine, phenylpropanolamine, and combination
ephedrine products. Within this system of controls, the MCA does
provide an exemption for retail sales of ordinary over-the-counter
pseudoephedrine and phenylpropanolamine products; however, wholesale
distributions, importations, and exportations of these products are
subject to the controls.
The specific mandates of the MCA, if applied as written, would have
a far-reaching and significant impact. Pseudoephedrine and
phenylpropanolamine over-the-counter products are a common part of
every-day life, available in most supermarkets, drug stores,
convenience stores, and other retail outlets. Combination ephedrine
products are somewhat less common, due to their limited use as a
bronchodilator for the treatment of asthma.
DEA consulted with industry organizations associated with over-the-
counter drug manufacture and marketing in an effort to determine the
potential size of the impacted industry. According to industry sources
there are approximately 750,000 retail distributors of pseudoephedrine,
phenylpropanolamine, and combination ephedrine products. Accurate
identification of the number of wholesale distributors has been
somewhat more difficult; however, following consultations with
representatives of the food marketing, drug wholesale, and retail
supplier industries, DEA estimates that there are approximately 3,000
to 3,500 wholesale locations distributing the products.
In considering the implementation of the MCA, DEA considered the
impact of applying various levels of controls, from no application
through full application of the requirements of the law, from the
perspective of their impact on the industry, on the public health and
safety,and on the ability of both industry and the government to
administer the controls.
Of the available options, it is readily apparent that imposition of
either no controls or the full level of controls would be unrealistic.
With respect to no controls, the simple fact that the legislation was
deemed necessary is recognition enough of the threat to the public
health and safety that the diversion of pseudoephedrine,
phenylpropanolamine, and combination ephedrine products to the illicit
manufacture of methamphetamine represents and the intent to impose
restrictions and monitoring controls on the distribution. At the same
time, full application of the controls of the MCA would result in
monetary and administrative burdens on the industry and DEA that would
be out of proportion with the benefits to be derived and may
unnecessarily interfere with legitimate public access to the products.
Therefore, alternatives that avoided unnecessary burdens while still
accomplishing the mandate of the MCA were explored.
Exploring the alternatives and exceptions required consideration of
the scope of commerce, business practices, and capabilities of the
different segments of the industry; the scope of diversion from each
segment of industry; the activities of the traffickers; and the
relative impact of different controls, both on the industry and DEA.
The MCA recognizes two distinct segments within industry: retail
distributors, who, by definition, sell small amounts of product in
face-to-face transactions to individuals for their personal use; and
manufacturers/wholesalers (including importers/exporters), who
introduce generally larger quantities of the products into commerce and
distribute to other commercial concerns for further distribution, and
some of whom also distribute larger quantities to non-commercial
concerns without regard or consideration of the intended use.
Collectively, retail distributors are responsible for as great a
scope of distribution as manufacturers/wholesalers, serving as they do
as the principal source of supply for the individual consumers of the
products. Individually, however, their scope of commerce, by
definition, is very small, due to the fact that their activities are
restricted to sales to individuals of small, personal use quantities of
the products. Despite the collective volume of commerce at the retail
level, the new controls of the MCA should, as a practical matter,
significantly reduce the potential for major diversion from this level
(provided retailers comply with the law and are alert to attempts to
circumvent the controls). Because to the limited amount of product
permitted to be distributed in an individual transaction, attempts to
divert the products by the retail distributors should be noticeable,
given that the volume of material required is out of proportion with
any reasonable amount that might be purchased for personal use.
However, traffickers have, on occasion, succeeded in obtaining tens of
[[Page 52300]]
thousands of dosage units of products by preying upon unsophisticated
or negligent owners or employees of retail establishments who are not
aware of, or are unconcerned with, the illicit use to which the
products can be put. In addition, there are those unscrupulous
individuals who will always be eager to profit from a transaction,
capitalizing on the fact that, even with a 24 gram threshold for retail
distributors, many of the smaller clandestine laboratories which DEA
and state and local authorities are encountering could adequately
satisfy their needs for precursor material be obtaining legal drug
products at the retail level. This is a situation in which voluntary
industry programs to prevent diversion at the retail level will be an
important factor in achieving the goals of the MCA.
While far fewer in number (est. 3,000-3,500) and engaging in a
lesser number of transactions, manufacturer/wholesalers account for as
great a part of the distributions as retail distributors through the
volume of products moved in each transaction. The significantly larger
transaction sizes, which would be cause for concern at the retail level
but are commonplace at the wholesale level, coupled with the relative
anonymity of the transaction, have resulted in this segment of industry
becoming the source of choice for the traffickers. Through conspiracy
and deception, as well as carelessness on the part of some wholesalers,
traffickers have been able to obtain large volumes of product without
having their transactions stand out against the normal commerce.
Against this backdrop, and in recognition of the effectiveness of
the new controls provided by the MCA, chemical controls for the
consumer drug products should be focused on the wholesale level, and
the retail level should be granted additional exemption as long as they
operate within the new limits of the MCA. However, given the
opportunistic nature of the traffickers and their preference for an
unregulated source of supply, there exists the potential that, with the
control of the wholesale distributors, traffickers may intensely focus
on the retail level as a source of supply. Therefore, the exemption
from the registration requirement applies to retail distributors that
limit their activities exclusively to sales below the 24 gram threshold
established by the MCA for those products. Retail distributors that
engage in the distribution of ordinary over-the-counter pseudoephedrine
and phenylpropanolamine products are also exempt from the registration
requirement. Thus, it is likely that most, if not all, of the estimated
750,000 retail distributor will qualify and be exempt from
registration.
The final element to be addressed was the impact that the controls
would have on the industry and DEA. The determining factor in this
assessment proved to be the types of transactions conducted and the
business practices in the different segments of the industry.
The principal controls required under the MCA are recordkeeping and
registration. The recordkeeping requirement applies to any person who
engages in a regulated transaction involving a pseudoephedrine,
phenylpropanolamine, or combination ephedrine product, other than a
retail distribution of an ordinary over-the-counter pseudoephedrine or
phenylpropanolamine product. The registration requirement applies to
any person who distributes imports, or exports a pseudophedrine,
phenylpropanolamine, or combination ephedrine product, except for the
exemptions previously discussed.
The recordkeeping requirement would represent a minimal burden for
both segments of industry. While retail distributors do not keep
records of their sales to individuals as a matter of business practice,
their sales are almost exclusively sub-threshold; therefore, the
recordkeeping requirement would not apply for their distributions.
Wholesale distributors, on the other hand, often engage in transactions
that would be subject to the recordkeeping requirement. However, such
distributors generally do keep detailed records of their transactions
as a matter of good business practice. Such records can be made readily
retrievable through the marking of the transactions involving regulated
products with an asterisk or other unique code. Further, under the MCA,
the record retention period for List I records has been reduced from
four years to two years, thus reducing the regulatory burden of List I
chemical controls. Additionally, recordkeeping at the wholesale level
is further mitigated by a threshold of one kilogram for ephedrine
combination and pseudoephedrine products, and 2.5 kilograms for
phenylpropanolamine products. Transactions below these thresholds do
not require records.
The registration requirement, on the other hand, would have a
significant financial impact if applied across the board. The cost of
initial registration (at $255.00 each) for 750,000 retail distributors
would be over $190 million; annual reregistration (at $116.00 each)
would cost approximately $87 million. For the estimated 3,500
manufacturers/wholesalers the cost for initial registration (at $595.00
each) would be slightly more than $2 million; annual reregistration (at
$477.00 each) would cost approximately $1.7 million. The respective
annual paperwork burdens associated with filing the applications for
registration would be 150,000 hours for all retail distributors and 700
hours for all manufacturers/wholesalers. Further, the administrative
burden for DEA of having to receive and process over 750,000
applications per year would be enormous.
The cost and administrative burden of requiring registration at the
retail level, which is predominantly small business, would be
significant, while the potential of large scale diversion at the retail
level following implementation of the MCA is greatly reduced given the
limited amounts of products being distributed in face-to-face sales to
individuals.
Therefore, to best achieve the intended results of the MCA, while
minimizing the burden on industry, DEA has determined to propose that:
(a) the registration and recordkeeping provisions will apply at the
manufacturer/wholesale level, and (b) the exemptions will apply to
retail distributors who operate exclusively within the retail quantity
limits established by the MCA, irrespective of whether the form of
packaging meets the definition of ``ordinary over-the-counter
pseudoephedrine or phenylpropanolamine product'' under Section 102(45)
of the Act (21 U.S.C. 802(45)). The large volumes of products per
transaction at wholesale, the opportunity for relatively anonymous
transactions, and the existing history of diversion point to the need
for adequate registration and recordkeeping at this level of industry.
As noted earlier, the cost of imposing the full controls of the MCA on
this segment of the industry will consist of slightly more than $2
million for initial registration, approximately $1.7 million for annual
reregistration, and an estimated 700 burden hours per year. The
recordkeeping requirement will not result in substantial additional
burden due to the fact that the information required can be found in
the normal business records (provided they are marked in such a way as
to make them readily retrievable) that would be maintained as part of
good business practice.
With respect to retail distributors, the determination was made to
provide a waiver from the registration, and, thus, recordkeeping,
requirement due to the small size and face-to-face nature of the
transactions and the limited future potential of diversion from this
segment of the industry. The waiver of the registration applies,
regardless of the
[[Page 52301]]
form of packaging of the drug product, only to those retail
distributors whose activities are restricted to below threshold
transactions, to ensure that this segment of industry does not become
the source of supply for the traffickers. If a retail distributor
intends to engage in above-threshold transactions in the course of
business, then a registration should be obtained. However, it is
understood that unintentional sales which exceed the threshold are
possible. In that regard, DEA wishes to note that the chemical control
program is focused on preventing the diversion of chemicals to
clandestine laboratories and not on identification of an action against
the rare, inadvertent, non-egregious above-threshold sale of drug
products by a checkout clerk or similar employee of an unregistered
retail distributor in the normal course of legitimate business. Firms
should, however, to protect their registration exemption, maintain
programs to guard against such inadvertent sales.
In total, the proposed regulations, coupled with the existing
exemption from chemical registration for controlled substances
registrants and the exception from the regulations provided for
distributors of prescription drug products that contain List I
chemicals, provide a system of controls that minimize the financial and
administrative burden on the industry while still allowing effective
enforcement of the requirements of the MCA.
The Acting Deputy Administrator hereby certifies that this proposed
rulemaking has been drafted in a manner consistent with the principles
of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). As discussed
in the preceding section regarding Small Business Impact And Regulatory
Flexibility Concerns, consideration was given to the potential impact
of varying levels of regulation, the population that would be impacted,
and the nature of the problem to be addressed by the regulations. These
proposed regulations will provide a system of controls to prevent the
diversion of the drug products to clandestine laboratories that is
consistent with the intent of the MCA, while providing regulatory
relief for the approximately 750,000 retail distributors, most of whom
are small businesses. For the remaining 3,000 to 4,000 wholesale
distributors, importers, and exporters that will be subject to
regulation, the primary impact will be the requirement that they obtain
an annual registration from DEA and make occasional reports. A copy of
this proposed rulemaking has been provided to the Chief Counsel for
Advocacy at the Small Business Administration.
This proposed rulemaking has been drafted and reviewed in
accordance with Executive Order 12866. This proposed rulemaking has
been determined to be a significant action because the requirements of
the MCA affect a broad spectrum of businesses distributing widely used
products to the public. This proposed rule would establish specific
exemptions to significantly reduce that impact. Therefore, this
proposed rulemaking has been reviewed and approved by the Office of
Management and Budget.
This action has been analyzed in accordance with the principles and
criteria in Executive Order 12612, and it has been determined that this
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
This rule will not result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of
$100,000,000 or more in any one year, and will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995.
This rule is not a major rule as defined by Section 804 of the
Small Business Regulatory Enforcement Fairness Act of 1996. This rule
will not result in an annual effect on the economy of $100,000,000 or
more; a major increase in costs or prices; or significant adverse
effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based companies to
compete with foreign-based companies in domestic and export markets.
List of Subjects
21 CFR Part 1300
Definitions, Drug traffic control.
21 CFR Part 1309
Administrative practice and procedure, Drug traffic control, List I
and II chemicals, Security measures. 21 CFR Part 1310
Drug traffic control, List I and II chemicals, Reporting and
recordkeeping requirements.
For the reasons set out above, 21 CFR Parts 1300, 1309, and 1310
are proposed to be amended as follows:
PART 1300--[AMENDED]
1. The authority citation for Part 1300 continues to read as
follows:
Authority: 21 U.S.C. 802, 871(b), 951, 958(f).
2. Section 1300.02 is proposed to be amended by revising paragraphs
1300.2(b)(28)(i)(D)(1) and (2) and by adding new paragraphs 1300.02(b)
(31) and (32) to read as follows:
Sec. 1300.02 Definitions relating to listed chemicals.
* * * * *
(b) * * *
(28) * * *
(i) * * *
(D) * * *
(1)(i) The drug contains ephedrine or its salts, optical isomers,
or salts of optical isomers, pseudoephedrine or its salts, optical
isomers, or salts of optical isomers, or phenylpropanolamine or its
salts, optical isomers, or salts of optical isomers unless otherwise
exempted under Sec. 1310.11 of this chapter, except that any sale of
ordinary over-the-counter pseudoephedrine or phenylpropanolamine
products by retail distributors shall not be a regulated transaction;
or
(ii) The Administrator has determined pursuant to the criteria in
Sec. 1310.10 of this chapter that the drug or group of drugs is being
diverted to obtain the listed chemical for use in the illicit
production of a controlled substance; and
(2) The quantity of ephedrine, pseudoephedrine,
phenylpropanolamine, or other listed chemical contained in the drug
included in the transaction or multiple transactions equals or exceeds
the threshold established for that chemical, except that the threshold
for any sale of products containing pseudoephedrine or
phenylpropanolamine by retail distributors or by distributors required
to submit reports by Sec. 1310.03(c) shall be 24 grams of
pseudoephedrine or 24 grams of phenylpropanolamine in a single
transaction.
* * * * *
(31) The term ordinary over-the-counter pseudoephedrine or
phenylpropanolamine product means any product containing
pseudoephedrine or phenylpropanolamine that is--
(i) Regulated pursuant to the Act; and
(ii)(A) Except for liquids, sold in package sizes of not more than
3.0 grams of pseudoephedrine base or 3.0 grams of phenylpropanolamine
base, and that is packaged in blister packs, each blister containing no
more than two dosage units, or where the use of blister packs is
technically infeasible, that is packaged in unit dose packets or
pouches, and
[[Page 52302]]
(B) For liquids, sold in package sizes of not more than 3.0 grams
of pseudoephedrine base or 3.0 grams of phenylpropanolamine base.
(32) The term combinaiton ephedrine product means a drug product
containing ephedrine or its salts, optical isomers, or salts of optical
isomers, and therapeutically significant quantities of another active
medicinal ingredient.
PART 1309--[AMENDED]
1. The authority citation for part 1309 continues to read as
follows:
Authority: 21 U.S.C. 821, 822, 823, 824, 830, 871(b), 875, 877,
958.
2. Section 1309.22 is proposed to be amended by revising paragraph
(b) to read as follows:
Sec. 1309.22 Separate registration for independent activities.
* * * * *
(b) Every person who engages in more than one group of independent
activities shall obtain a separate registration for each group of
activities, unless otherwise exempted by the Act or Secs. 1309.24
through 1309.26, except that 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.
3. Section 1309.24 is proposed to be revised to read as follows:
Sec. 1309.24 Waiver of registration requirement for certain
activities.
(a) The requirement of registration is waived for any agent or
employee of a person who is registered to engage in any group of
independent activities, if such agent or employee is acting in the
usual course of his or her business or employment.
(b) The requirement of registration is waived for any person who
distributes a product containing a List I chemical that is regulated
pursuant to Sec. 1300.02(b)(28)(i)(D), if that person is registered
with the Administration to manufacture, distribute or dispense a
controlled substance.
(c) The requirement of registration is waived for any person who
imports or exports a product containing a List I chemical that is
regulated pursuant to 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
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 retail
distributor whose activities with respect to List I chemicals are
limited to the distribution of below-threshold quantities of a
pseudoephedrine, phenylpropanolamine, or combination ephedrine product
that is regulated pursuant to Sec. 1300.02(b)(28)(i)(D) of this
chapter, in a single transaction to an individual for legitimate
medical use, irrespective of whether the form of packaging of the
product meets the definition of ``ordinary over-the-counter
pseudoephedrine or phenylpropanolamine product'' under
Sec. 1300.02(b)(31) of this chapter. The threshold for a distribution
of a product in a single transaction to an individual for legitimate
medical use is 24 grams of pseudoephedrine, phenylpropanolamine, or
ephedrine base.
(f) 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.
(g) If any person exempted under paragraph (b), (c), (d), or (e) of
this section also engages in the distribution, importation or
exportation of a List I chemical, other than as described in such
paragraph, the person shall obtain a registration for such activities,
as required by Sec. 1309.21.
(h) 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), or (e) of this section pursuant
to the procedures set forth in Secs. 1309.43 through 1309.46 and
1309.51 through 1309.57. 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.
(i) Any person exempted from the registration requirement under
this section shall comply with the security requirements set forth in
Secs. 1309.71 through 1309.73 and the recordkeeping and reporting
requirements set forth under parts 1310 and 1313 of this chapter.
4. Section 1309.25 is proposed to be revised to read as follows:
Sec. 1309. Temporary exemption from registration for chemical
registration applicants.
(a) Each person required by section 302 of the Act (21 U.S.C. 822)
to obtain a registration to distribute, import, or export a combination
ephedrine product is temporarily exempted from the registration
requirement, provided that the person submits a proper application for
registration on or before July 12, 1997. The exemption will remain in
effect for each person who has made such application until the
Administration has approved or denied that application. This exemption
applies only to registration; all other chemical control requirements
set forth in parts 1309, 1310, and 1313 of this chapter remain in full
force and effect.
(b) Each person required by section 302 of the Act (21 U.S.C. 822)
to obtain a registration to distribute, import, or export a
pseudoephedrine or phenylpropanolamine drug product is temporarily
exempted from the registration requirement, provided that the person
submits a proper application for registration on or before December 3,
1997. The exemption will remain in effect for each person who has made
such application until the Administration has approved or denied that
application. This exemption applies only to registration; all other
chemical control requirements set forth in parts 1309, 1310, and 1313
of this chapter remain in full force and effect.
5. Sections 1309.27, 1309.28 and 1309.29 are proposed to be
removed.
6. Section 1309.71 is proposed to be amended by revising paragraph
(a)(2) to read as follows:
Sec. 1309.71 General security requirements.
(a)* * *
(2) In retail settings open to the public where drug products
containing ephedrine or its salts, optical isomers, or salts of optical
isomers are distributed, such drugs will be stocked behind the counter
where only employees have access.
* * * * *
PART 1310--[AMENDED]
1. The authority citation for part 1310 continues to read as
follows:
Authority: 21 U.S.C. 802, 830, 871(b).
2. Section 1310.03 is proposed to be amended by adding a new
paragraph (c) to read as follows:
Sec. 1310.03 Persons required to keep records and file reports.
* * * * *
(c) Each regulated person who engages in a transaction with a
[[Page 52303]]
nonregulated person which involves ephedrine, pseudoephedrine, or
phenylpropanolamine (including drug products containing these
chemicals), and uses or attempts to use the Postal Service or any
private or commercial carrier shall file monthly reports of each such
transaction as specified in Sec. 1310.05.
3. Section 1310.04 is proposed to be amended by removing paragraph
(g) and revising paragraph (f)(1) to read as follows:
Sec. 1310.04 Maintenance of records.
* * * * *
(f) * * *
(1) List I chemicals:
(i) Except as provided in paragraph (f)(1)(ii) of this section, the
following thresholds have been established for List I chemicals:
------------------------------------------------------------------------
Chemical Threshold by base weight
------------------------------------------------------------------------
(A) Anthranilic acid, its esters, and its 30 kilograms.
salts.
(B) Benzyl cyanide......................... 1 kilogram.
(C) Ephedrine, its salts, optical insomers, No threshold-All
and salts of optical isomers. transactions Regulated.
(D) Ergonovine and its salts............... 10 grams.
(E) Ergotamine and its salts............... 20 grams.
(F) N-Acetylanthranilic acid, its esters, 40 kilograms.
and its salts.
(G) Norpseudoephedrine, its salts, optical 2.5 kilograms.
isomers, and salts of optical isomers.
(H) Phenylacetic acid, its esters, and its 1 kilogram.
salts.
(I) Phenlpropanolamine, its salts, optical 2.5 kilograms.
isomers, and salts of optical isomers.
(J) Piperidine and its salts............... 500 grams.
(K) Pseudoephedrine, its salts, optical 1 kilogram.
isomers, and salts of optical isomers.
(L) 3, 4-Methylenedioxyphenyl-2-propanone.. 4 kilograms.
(M) Methylamine and its salts.............. 1 kilogram.
(N) Ethylamine and its salts............... 1 kilogram.
(O) Propionic anhydride.................... 1 gram.
(P) Isosafrole............................. 4 kilograms.
(Q) Safrole................................ 4 kilograms.
(R) Piperonal.............................. 4 kilograms.
(S) N-Methylephedrine, its salts, optical 1 kilogram.
isomers, and salts of optical isomers (N-
Methylephedrine.
(T) N-Methylpseudoephedrine, its salts, 1 kilogram.
optical isomers, and salts of optical
isomers.
(U) Hydriodic Acid......................... 1.7 kilogrmas (or 1 liter
by volume.
(V) Benzaldehyde........................... 4 kilograms.
(W) Nitroethane............................ 2.5 kilograms.
------------------------------------------------------------------------
(ii) Notwithstanding the thresholds established in paragraph
(f)(1)(i), the following thresholds will apply for the following List I
chemicals that are contained in drug products that are regulated
pursuant to Sec. 1300.02(b)(28)(i)(D) (Retail distribution thresholds
are for a single transaction; the cumulative threshold provision does
not apply. All other distributions are subject to the cumulative
threshold provision.):
------------------------------------------------------------------------
Chemical Threshold by base weight
------------------------------------------------------------------------
(A) Ephedrine, its salts, optical isomers, No threshold-All
and salts of optical isomers as the sole transactions Regulated.
therapeutically significant medicinal
ingredient.
(B) Ephedrine, its salts, optical isomers,
and salts of optical isomers in
combination with therapeutically
significant amounts of another medicinal
ingredient:
(1) Distributions by retail 24 grams.
distributors.
(2) Distributions by person required to 24 grams.
report under Sec. 1310.03(c).
(3) All other domestic distributions 1 kilogram.
(other than (B) (1) and (2)).
(4) Imports and Exports................ 1 kilogram.
(C) Pseudoephedrine, its salts, optical
isomers, and salts of optical isomers
(other than ordinary over-the-counter
products):
(1) Distributions by retail 24 grams.
distributors.
(2) Distributions by person required to 24 grams.
report under Sec. 1310.03(c).
(3) All other domestic distributions 1 kilogram.
(other than (C) (1) and (2)).
(4) Imports and Exports................ 1 kilogram.
(D) Pseudoephedrine, its salts, optical
isomers, and salts of optical isomers
(Ordinary over-the-counter products):
(1) Distributions by retail Exempt.
distributors.
(2) Distributions by person required to 24 grams.
report under Sec. 1310.03(c).
(3) All other domestic distributions 1 kilogram.
(other than (D) (1) and (2)).
(4) Imports and Exports................ 1 kilogram.
(E) Phenylpropanolamine, its salts, optical
isomers, and salts of optical isomers
(other than ordinary over-the-counter
products):
(1) Distributions by retail 24 grams.
distributors.
(2) Distributions by person required to 24 grams.
report under Sec. 1310.03(c).
(3) All other domestic distributions 2.5 kilograms.
(other than (E) (1) and (2)).
(4) Imports and Exports................ 2.5 kilograms.
(F) Phenylpropanolamine, its salts, optical
isomers, and salts of optical isomers
(Ordinary over-the-counter products):
(1) Distributions by retail Exempt.
distributors.
[[Page 52304]]
(2) Distributions by person required to 24 grams.
report under Sec. 1310.03(c).
(3) All other domestic distributions 2.5 kilograms.
(other than (F) (1) and (2)).
(4) Imports and Exports................ 2.5 kilograms.
------------------------------------------------------------------------
4. Section 1310.05 is proposed to be amended by adding a new
paragraph (e) to read as follows:
Sec. 1310.05 Reports.
* * * * *
(e) Each regulated person required to report pursuant to
Sec. 1310.03(c) shall either:
(1) Submit a written report, containing the information set forth
in Sec. 1310.06(i), on or before the 15th day of each month following
the month in which the distributions took place. The report shall be
submitted under company letterhead, signed by the person authorized to
sign the registration application forms on behalf of the registrant, to
the Chemical Operations Section, Office of Diversion Control, Drug
Enforcement Administration, Washington, D.C. 20537; or
(2) Upon request to and approval by the Administration, submit the
report in electronic form, either via computer disk or direct
electronic data transmission, in such form as the Administration shall
direct. Requests to submit reports in electronic form should be
submitted to the Chemical Operations Section, Office of Diversion
Control, Drug Enforcement Administration, Washington, D.C. 20537, ATTN:
Electronic Reporting.
5. Section 1310.06 is proposed to be amended by adding a new
paragraph (i) to read as follows:
Sec. 13.10.06 Content of records and reports.
* * * * *
(i) Each monthly report required by Sec. 1310.05(e) shall provide
the following information for each distribution:
(1) Supplier's name and registration number;
(2) Purchaser's name and address;
(3) Name/address shipped to (if different from purchaser's name/
address);
(4) Name of the Chemical and total amount shipped;
(5) Date of shipment;
(6) Product name (if drug product);
(7) Dosage form (if drug product);
(8) Dosage strength (if drug product);
(9) Number of dosage units (if drug product);
(10) Package type (if drug product);
(11) Package quantity (if drug product);
(12) Lot number (if drug product).
6. Section 1310.10 is proposed to be amended by revising paragraph
(d) introductory text to read as follows:
Sec. 1310.10 Removal of the exemption of drugs distributed under the
Food, Drug, and Cosmetic Act.
* * * * *
(d) Any manufacturer seeking reinstatement of a particular drug
product that has been removed from an exemption may apply to the
Administrator for reinstatement of the exemption for that particular
drug product on the grounds that the particular drug product is
manufactured and distributed in a manner that prevents diversion. In
determining whether the exemption should be reinstated the
Administrator shall consider:
* * * * *
Dated: September 26, 1997.
James S. Milford,
Acting Deputy Administrator.
[FR Doc. 97-26150 Filed 10-6-97; 8:45 am]
BILLING CODE 4410-09-M
