[Federal Register Volume 61, Number 153 (Wednesday, August 7, 1996)]
[Rules and Regulations]
[Pages 40981-40993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19846]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Parts 1309, 1310 and 1313
[DEA-138F]
RIN 1117-AA32
Removal of Exemption for Certain Pseudoephedrine Products
Marketed Under the Federal Food, Drug, and Cosmetic Act (FD&C Act)
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Final rule.
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SUMMARY: This rule is issued by the Deputy Administrator of the Drug
Enforcement Administration (DEA) to remove the exemption for certain
products containing pseudoephedrine (which are lawfully marketed under
the Federal Food, Drug, and Cosmetic Act) from the regulatory chemical
control provisions of the Controlled Substances Act (CSA) and the
Controlled Substances Import and Export Act. This rule finalizes a
Notice of Proposed Rulemaking (NPRM) published in the Federal Register
on October 31, 1995 (60 FR 55348).
Due to the large scale utilization of over-the-counter (OTC)
pseudoephedrine products for the clandestine manufacture of controlled
substances, the DEA has determined that certain products should be
subject to recordkeeping, reporting, registration and notification
requirements of the CSA to prevent their diversion. Such products
include OTC tablets, capsules and powder packets containing
pseudoephedrine alone or in combination with antihistamines,
guaifenesin or dextromethorphan. This action also reduces the threshold
for pseudoephedrine to 48.0 grams pseudoephedrine base. Such a
threshold is sufficient to permit the purchase of up to a 244 day
supply of OTC pseudoephedrine drug products without the application of
regulatory requirements. In addition, the cumulative threshold
requirement for multiple transactions of pseudoephedrine drug products
in a calendar month will not apply to sales for personal use. To
further ensure the availability of pseudoephedrine products to
legitimate consumers at the retail level, this action also waives the
registration requirement for retail distributors of regulated
pseudoephedrine products.
EFFECTIVE DATES: October 7, 1996. Persons seeking registration must
apply on or before November 20, 1996, in order to continue to
distribute, import or export pseudoephedrine products for which
registration is required pending final action by the DEA on their
application.
FOR FURTHER INFORMATION CONTACT:
Howard McClain Jr., Chief, Drug and Chemical Evaluation Section, Office
of Diversion Control, Drug Enforcement Administration, Washington, DC
20537. Telephone (202) 307-7183.
SUPPLEMENTARY INFORMATION: On October 31, 1995, the DEA published a
Notice of Proposed Rulemaking (NPRM) which proposed the removal of the
exemption for certain over-the-counter (OTC) pseudoephedrine products
from the chemical control provisions of the Controlled Substances Act
(CSA). The NPRM documented the increasing problem of OTC product
diversion for use as precursor material in the clandestine production
of methamphetamine.
The clandestine manufacture and distribution of methamphetamine are
serious national public health problems which require Federal action.
Methamphetamine, a Schedule II Controlled Substance, is the most
prevalent controlled substance clandestinely synthesized in the United
States. Between January 1, 1994 and December 31, 1995, the DEA has been
involved in the domestic seizure of 587 methamphetamine laboratories.
Ephedrine and/or pseudoephedrine were utilized as the precursor
material at the vast majority of these laboratories.
The significance of the abuse of methamphetamine is well known and
documented. In recent years the problem has increased dramatically. In
1994. alone, there were over 700 methamphetamine related deaths in the
United States.
The DEA monitors Medical Examiner (ME) data from approximately 42
medical examiners located in major cities in the contiguous 48 states.
Nationally, ME reported deaths related to methamphetamine increased
145% from 1992 to 1994 and there were 1816 deaths for the period 1991
to 1994. In addition, methamphetamine emergency room episodes increased
significantly in 1993 and 1994. Current data indicate the illicit
production, distribution and abuse of methamphetamine remain a serious
problem.
In addition, evidence of the illicit utilization of pseudoephedrine
in clandestine laboratories is increasing. The identification of OTC
pseudoephedrine products at clandestine methamphetamine laboratories
increased dramatically in 1995.
The NPRM documented that pseudoephedrine was utilized in 22 percent
of the laboratories seized from January 1, 1995 through September 1995.
DEA thereby acted to place regulatory controls on these products in an
effort to further minimize the availability of widely used precursor
material and ultimately protect the public health. Since publication of
the NPRM, the extent of diversion of OTC pseudoephedrine products has
intensified in the United States. End of year data for 1995 indicates
that at least 28 percent of the clandestine methamphetamine
laboratories seized utilized pseudoephedrine.
In recent years, the diversion of OTC products has been the
predominant source of precursor material for the clandestine synthesis
of methamphetamine. As regulatory controls were implemented to counter
the diversion of specific types of OTC products, clandestine laboratory
operators have been successful in circumventing these controls to
obtain precursor material through the diversion of millions of OTC
dosage units of exempt products. The NPRM documents the progression of
the diversion from bulk ephedrine, to single entity OTC ephedrine
products, to OTC ephedrine combination products and OTC pseudoephedrine
products.
As stated in the NPRM, since 1989 ephedrine has been the primary
precursor used in the clandestine synthesis of methamphetamine in the
United States. Clandestine laboratory operators exploited the lack of
control on OTC ephedrine products (such as tablets/capsules) to
purchase millions of dosage units for the synthesis of methamphetamine
and methcathinone.
[[Page 40982]]
The Domestic Chemical Diversion Control Act (DCDCA) of 1993 (Pub.
L. 103-200) became effective on April 16, 1994. This Act further
amended the CSA and the Controlled Substances Import and Export Act and
removed the exemption for those transactions involving products which
are marketed or distributed lawfully in the United States under the
Federal Food, Drug, and Cosmetic Act, if these products contain
ephedrine (or its salts, optical isomers, or salts of optical isomers)
as the only active medicinal ingredient or contain ephedrine in
combination with therapeutically insignificant quantities of another
active medicinal ingredient. Thus, single entity ephedrine products
became subject to registration, reporting, recordkeeping and
notification requirements of the CSA. The DCDCA, however, did not
remove the exemption provided for pseudoephedrine OTC products, since
the known illicit use of pseudoephedrine was relatively infrequent when
the DCDCA was enacted.
The DCDCA also provided the Attorney General with the authority (21
U.S.C. 814) to remove the exemption for any drug product containing a
listed chemical upon a determination that the drug product is being
diverted for use in the illicit production of a controlled substance.
In addition, the DCDCA imposed registration requirements for List I
chemical distributors, importers and exporters.
The Chemical Diversion and Trafficking Act (CDTA) established a
system of thresholds for each listed chemical to determine which
transactions would be subject to regulatory controls. Reporting,
recordkeeping and notification requirements apply to all regulated
transactions which meet or exceed these threshold amounts of a listed
chemical. The threshold for ephedrine was originally established as 1.0
kilogram for domestic, import and export transactions. The threshold of
1.0 kilogram of ephedrine base is equivalent to greater than 48,800
ephedrine 25 mg dosage units. Even though the dosage form exemption was
eliminated by the DCDCA, a 1.0 kilogram threshold was not adequate to
prevent the significant diversion of ephedrine to clandestine
laboratories in the United States.
Given evidence of the large-scale diversion of ephedrine from
various types of outlets and the public health threat imposed by the
diversion of these products, the DEA determined that additional action
was needed to prevent further diversion. Effective November 10, 1994,
(59 FR 51365) the DEA eliminated the threshold for ephedrine.
Subsequently, all regulated transactions of ephedrine became subject to
reporting recordkeeping and notification requirements of the CSA
regardless of size.
In response to regulatory and other actions taken against single-
entity ephedrine products, clandestine laboratory operators have again
attempted to circumvent CSA chemical controls in an effort to obtain
precursor material. The search for unregulated sources of precursor
material has led to the diversion and illicit utilization of OTC
ephedrine combination products and OTC pseudoephedrine products. The
DEA is currently reviewing the regulatory options which address the
diversion of OTC ephedrine combination products. This issue will be
addressed in the near future.
Pseudoephedrine and ephedrine are related as disastereomers.
Because of this structural relationship, pseudoephedrine can serve as a
direct substitute for ephedrine in the synthesis of methamphetamine.
Clandestine laboratory operators are exploiting the lack of regulatory
controls on OTC pseudoephedrine products by obtaining pseudoephedrine
for use as precursor material for the synthesis of controlled
substances.
The DEA is aware of the large scale legitimate use of OTC
pseudoephedrine products and their widespread distribution. However,
the DEA believes that the registration, recordkeeping, reporting and
notification requirements that have been successfully used to limit the
diversion of other chemicals to clandestine laboratories are needed for
some pseudoephedrine products to control this problem.
The DEA has documented both mail order and retail diversion of OTC
pseudoephedrine products for use in the clandestine production of
methamphetamine. In proposing these regulations the DEA has
specifically attempted to target both sources of the problem. In order
for such regulatory action to be effective, it should include
provisions which directly target the problem of indiscriminate
distribution of wholesale level quantities by retail, mail order and
wholesale distributors.
While there is an urgent need to counter the diversion of OTC
pseudoephedrine products for the clandestine production of
methamphetamine, these regulations go to extreme lengths to protect the
availability of these pseudoephedrine decongestant products for
legitimate medical use. While all mail order and wholesale distributors
will be subject to the full extent of CSA chemical regulatory controls,
specific exemptions and waivers have been provided for retail
distributors selling personal use quantities so that these retail
distributors are not adversely impacted.
In writing the NPRM, the DEA proposed the inclusion of four
provisions which would eliminate potentially burdensome requirements
for practically all of the estimated 750,000 retail distributors who
would be impacted if pseudoephedrine products were made subject to the
full extent of the CSA chemical provision established by law. First,
the DEA has provided a waiver from registration for these distributors.
Secondly, the DEA has limited controls to a specific group of products.
Thirdly, the NPRM proposed the establishment of a threshold of 24.0
grams pseudoephedrine base and therefore would allow for the purchase
and sale of up to a 120 day supply of pseudoephedrine for personal
legitimate medical use, without the application of regulatory
requirements. In this final rule, this threshold has been increased to
48.0 grams. Such a threshold would allow for the purchase and sale of
up to a 244 day supply of pseudoephedrine without the application of
regulatory requirements. (A 244 day supply of pseudoephedrine at the
maximum recommended FDA dosage of 240 mg/day would be 976
pseudoephedrine 60 mg tablets.) Lastly, the proposal specifies that the
threshold quantity applies only to a single transaction. Therefore no
cumulative threshold for multiple transactions applies to OTC
pseudoephedrine transactions and there is no requirement to record each
transaction as long as the individual transaction is below the
threshold quantity.
Because of these provisions, no retail distributor will be required
to register or maintain records as long as they distribute only below-
threshold quantities in a single transaction. A retail distributor will
only be required to reports suspicious regulated transactions to the
DEA as per 21 CFR 1310.05.
Public Comments
Interested parties were provided with 60 days in which to comment
on the proposed regulations. The DEA received a total of 17 comments.
While the general tone of the comments was supportive of the need to
counter the clandestine production of controlled substances such as
methamphetamine, the commentors raised a number of concerns regarding
specific provisions of the proposed regulation as follows:
(1) Five commentors requested that the comment period be extended.
The
[[Page 40983]]
DEA responded that the 60 day comment period provided for in the NPRM
was adequate and provided sufficient time for comments. Therefore the
requests for extension were denied.
(2) In response to the NPRM, the National Association of Boards of
Pharmacy (NABP) submitted a letter of strong support for the proposed
regulations. NABP wrote that a nationwide Federal effort, under the
auspices of DEA, was necessary to deal with the diversion of such OTC
products and accordingly NABP supports the present effort to bring the
diversion of drug products containing pseudoephedrine under control.
(3) Numerous commentors expressed concern that the term ``threshold
quantity'' is not defined and that it is not clear in the NPRM whether
the threshold is calculated on a single transaction or on a cumulative
total of multiple purchases during a calendar month. These commentors
stated that the proposed rule will affect the availability of
pseudoephedrine products and retail distributors will be severely
impacted by this proposal if a cumulative threshold applies. Commentors
also expressed concerns that in order to ensure that a cumulative
threshold was not exceeded during a calendar month, retailers would
have to place non-exempt pseudoephedrine products behind the counter
(thus creating a third class of drug products), maintain records of
each and every transaction, register with the DEA and potentially pay
large fines in the event that the cumulative threshold was exceeded.
Several commentors stated that under such regulatory requirements they
feared that retailers would cease to carry non-exempt pseudoephedrine
products and these products would be placed at a competitive
disadvantage. Commentors also stated that most of the distributors will
not be able to afford or simply will not pay the registration fees and
increased costs of paperwork associated with DEA registration or
recordkeeping.
These commentors misread the proposal which states that the sale of
non-exempt pseudoephedrine products in quantities below 24.0 grams
pseudoephedrine base applies to a single transaction. The phrase ``in a
single transaction'' was specifically included in Sec. 1309.28
(Exemption for retail distributors) which states that the sale for
personal use means the sale of below-threshold quantities in a single
transaction to an individual for legitimate medical use. The cumulative
threshold requirements for multiple transactions of pseudoephedrine
products within a calendar month will not apply to sales for personal
use. Therefore, the DEA reemphasizes that retail sales of personal use
quantities for legitimate medical use in a single transaction will not
require (1) The placement of these pseudoephedrine products behind the
counter, (2) maintenance of records for each transaction, or (3)
registration with the DEA. In order to further clarify that the
cumulative threshold requirements for multiple transactions of
pseudoephedrine products within a calendar month will not apply to
sales for personal use, Secs. 1309.28 and 1310.04 have been modified
accordingly. In addition, Sec. 1309.71 has been modified to reflect
that the requirement that certain drug products to be stocked behind a
counter where only employees have access does not apply to drugs
containing List I chemicals that are regulated pursuant to
Sec. 1310.01(f)(1)(iv)(A)(2).
(4) Several commentors stated that the NPRM does not present
sufficient evidence of the scope, duration and significance of OTC
pseudoephedrine diversion to justify the proposed action.
The NPRM addresses each of these issues and includes a thorough
discussion of the evolution and extent of the diversion of OTC drug
products as precursor material for the clandestine synthesis of
methamphetamine in the United States. The NPRM also describes actions
taken to counter such diversion and specifically outlines steps taken
by clandestine laboratory chemist to circumvent controls implemented at
the Federal level.
On October 31, 1995, the DEA published the NPRM in an attempt to
counter the growing problem of pseudoephedrine diversion and thereby
protect the public health and safety. This NPRM notes that (as of the
date of publication) 22 percent of the methamphetamine laboratories
seized in 1995 in the United States utilized pseudoephedrine as the
precursor material. In addition, the NPRM documents specific increases
in the percentage of clandestine methamphetamine laboratories using
pseudoephedrine as precursor material between 1994 and 1995.
Since publication of the NPRM, all indicators show clear evidence
that the scope of the diversion of pseudoephedrine for the clandestine
synthesis of methamphetamine continues to grow.
Current data indicates that the DEA was involved in the seizure of
327 methamphetamine laboratories in calendar year 1995 and that at
least 28 percent of these laboratories utilized pseudoephedrine as the
precursor material. Smuggling of bulk powder has not been shown to be a
significant source of pseudoephedrine for use at these laboratories and
investigative data indicates that essentially all pseudoephedrine
utilized involved the diversion of OTC pseudoephedrine products.
In regard to the significance of the problem, the adverse impact of
methamphetamine abuse in the United States is clear. The NPRM clearly
documents that the production of methamphetamine is the United States'
most significant clandestine laboratory problem.
Nationally, over 700 methamphetamine related deaths were documented
in the United States in 1994. In addition, there is substantial
evidence that the abuse of methamphetamine is associated with violent
behavior and criminal activity. Coupled with the public health and
safety consequences from the abuse of methamphetamine, the extensive
use of pseudoephedrine as precursor material (in 28 percent of 1995
seized laboratories) provides overwhelming support for the need to
control OTC pseudoephedrine products in a manner which prevents their
use as precursor material while permitting the unencumbered sale for
legitimate use. In proposing these pseudoephedrine regulations, the DEA
acted in a timely manner to counter a growing public health and safety
problem. The increase in seizures of methamphetamine laboratories
utilizing pseudoephedrine further justifies the proposed regulations.
(5) Two commentors stated that the exemption for retail
distributors arbitrarily discriminates against other legitimate
distributors who provide consumers with convenience and savings of
shopping at home (such as mail order distributors). One of these
commentors further stated that the registration exemption is being
provided to businesses (such as retail distributors) which have the
least ability to monitor sales. In contrast, however, several
commentors stated the converse. Specifically these commentors stated
that the DEA should restrict its efforts to target mail order
distribution and not impact retail distribution activity.
The issue pertaining to the exclusion of mail order activities from
the definition of retail distributor was addressed in the June 22,
1995, Federal Register Notice (60 FR 32447) which implemented
provisions of the DCDCA. As stated in that notice, it has been DEA's
experience that mail order distributors deal with both individuals and
businesses, the volume of product
[[Page 40984]]
sales can be quite large, and such firms are often less readily able to
positively identify their customers. In addition, investigations will
be significantly more complex and time consuming for a mail order
distributor than a retail distributor. It is therefore appropriate that
mail order activities not be provided the same waiver as retail
distributors.
In addition several commentors stated that the DEA has no evidence
of retail diversion and instead should target the source of the problem
such as mail order distributors. In response to these comments, the DEA
has documented both mail order and retail diversion of OTC
pseudoephedrine products for use in the clandestine production of
methamphetamine. In implementing these regulations the DEA is
specifically attempting to target both sources of the problem. In order
for such regulatory action to be effective, it should include
provisions which directly target the problem of indiscriminate
distribution of wholesale level quantities by retail, mail order and
wholesale distributors.
While all mail order and wholesale distributors will be subject to
the full extent of CSA chemical regulatory controls, specific
exemptions and waivers have been provided for retail distributors
selling personal use quantities. However, the regulation will affect
large sales of non-exempt pseudoephedrine products by retail
distributors. The following are several anecdotal examples of the
diversion of pseudoephedrine which illustrate the need for regulating
large purchases of pseudoephedrine that are not consistent with
personal use quantities at all levels of distribution.
The following are several examples of retail diversion: DEA has
documented that individuals have successfully solicited pharmacists to
order and sell excessive quantities of 60 mg pseudoephedrine OTC
tablets. The DEA was initially notified by a pharmacist employee of a
large chain pharmacy of an excessive pseudoephedrine purchase. DEA met
with the pharmacist and was informed that the purchaser initially
requested 300 pseudoephedrine 60 mg tablets but gradually increased his
request to 10,000 pseudoephedrine 60 mg tablets. The pharmacist
subsequently ordered and received the 10,000 tablets which the
individual picked up and paid for in cash. The individual then
requested a second order be placed for 50,000 pseudoephedrine 60 mg
tablets which the pharmacist ordered and received. When the individual
telephoned to inquire whether the order had been received, the
pharmacist further questioned the individual about the intended
purpose. After this phone conversation, however, the individual neither
picked up his order or called the pharmacy again. DEA then conducted a
random survey of other pharmacists in the nearby area for
pseudoephedrine purchases. DEA investigators found that the same
individual had also ordered excessive quantities from three other
retail pharmacies. The individual ordered 20,000 pseudoephedrine 60 mg
tablets, 100,000 tablets and 100,000 tablets respectively from these
other pharmacies. At each of the retail distributors, the same
individual had given different reasons for needing the pseudoephedrine.
In an unrelated incident, the DEA was notified of a large purchase
of pseudoephedrine tablets by a large chain pharmacy in California.
Further investigation revealed that an individual had taken a bottle of
pseudoephedrine off the shelf and requested that the pharmacy staff
place a large order for the product on his behalf. Upon consultation
with the pharmacist-in-charge, an order for 4,000 bottles was placed.
According to pharmacy records, the pharmacy had purchased a total of
550,000 pseudoephedrine tablets in five separate orders over a 3 month
period. The individual never provided any identification, address or
telephone number and always called the pharmacy to ask if the order had
come in. After placing several orders, the pharmacist learned from a
third party that pseudoephedrine tablets may be used to manufacture
methamphetamine. At that point the pharmacist informed the individual
that she would not order any more tablets because of possible misuse.
In a separate action, the DEA was notified by a large retail drug
chain that individuals had just purchased about $800 worth of
pseudoephedrine tablets from four of their pharmacies. A license plate
check revealed that the vehicle utilized at the time of purchase
belonged to the wife of a DEA fugitive and subject of a state
methamphetamine investigation. During the investigation, investigators
also learned of an unrelated purchase from another retail pharmacy
whereby an individual attempted to order and purchase 100,000
pseudoephedrine tablets for ``export purposes'' to the Orient.
In an another incident, the DEA received a call from loss
prevention personnel for a large chain drug store advising of two
incidents of pseudoephedrine diversion that day. The entire inventory
of pseudoephedrine product was purchased off the shelf of the pharmacy
through 3 purchases. The purchases were made in cash.
In a separate case, DEA served an administrative subpoena on a
pharmacy for records of receipt and sales of pseudoephedrine tablets.
When the subpoena was served, DEA investigators found the pharmacy
manager hiding in an adjacent room. After a consent to search, the DEA
seized 300,000 pseudoephedrine tablets and $65,000 cash at the
pharmacy. Agents later seized an additional $50,000 cash from a vehicle
belonging to an individual who came to the pharmacy to buy
pseudoephedrine from the pharmacy manager.
In mid 1995, two retail distributors were identified as selling
large quantities of OTC pseudoephedrine. During an 8 month period one
retailer sold 70,000 pounds of pseudoephedrine tablets and the second
retail distributor sold approximately 8,500 pounds of pseudoephedrine
tablets. As a result of an investigation into these excessive sales,
several employees and individuals associated with these establishments
were arrested by DEA.
In another instance, with the arrest of an individual for
possession and manufacture of methamphetamine, DEA investigators found
3 liters of methamphetamine and sufficient chemicals for the production
of approximately one kilogram of methamphetamine. In addition,
investigators found pseudoephedrine/antihistamine combination OTC
tablets (consisting of pseudoephedrine 60 mg and triprolidine 2.5 mg)
and receipts for the purchase of OTC pseudoephedrine tablets from a
local chain drug store. Later, investigators interviewed the drug store
manager and reviewed store cash register receipts which documented the
sale of pseudoephedrine combination OTC tablets.
The following are several examples which illustrate the magnitude
of mail order diversion:
In October of 1995, the DEA seized a large methamphetamine
laboratory utilizing pseudoephedrine capable of manufacturing 200
pounds of methamphetamine per month. Precursor material was obtained
through the mail order purchase of OTC pseudoephedrine tablets.
In a long term DEA methamphetamine investigation, DEA seized 7.5
million dosage units of OTC pseudoephedrine and 1.8 million OTC
ephedrine dosage units and other chemicals used in the manufacture of
methamphetamine. The OTC products used as precursor material were
obtained through mail order distributors. In the course of the
investigation over 7.8 million dollars
[[Page 40985]]
was seized from the trafficking organization.
In another investigation, after the undercover purchase of 20
million pseudoephedrine tablets from an OTC manufacturer and
distributor, DEA seized 25 metric tons of pseudoephedrine, ephedrine
and phenylpropanolamine. Five tractor trailer trucks were required to
remove the material to a secure storage facility. The company, which
dealt extensively in mail order distribution, has been identified as
purchasing 191 metric tons of pseudoephedrine and ephedrine between
January 1994 and May 1995.
The above examples of significant diversion illustrate the need for
regulation at all levels of distribution of non-personal use
quantities, whether it be wholesale, retail or mail order distribution.
(6) One commentor noted that agencies are required to prepare and
make available for public comment an initial regulatory flexibility
analysis which describes the impact of a proposed rule on small
entities. This commentor states that the NPRM is therefore deficient in
that it does not adequately set forth such an analysis. The commentor
did, however, recognize that this provision does not apply to instances
where the head of the agency certifies that the rule will not have
significant impact on a substantial number of small entities.
The NPRM documents the various provisions which were specifically
provided in order to minimize the impact on small businesses. These
provisions were the result of a reasoned analysis of the potential
impact of implementation of the full extent of CSA regulations on the
affected industry and small businesses in particular. In providing for
these special provisions, DEA gave special care and consideration to
industry concerns and given these provisions, ensured that these
regulations ``will not have significant impact on a substantial number
of small entities''.
As previously stated in the NPRM, the DEA met with and consulted
with industry representatives prior to proposing these regulations in
an effort to minimize any adverse impact. In addition, the NPRM
specifically details provisions designed to eliminate the adverse
impact on small businesses at the retail level. First, the DEA proposed
that retail distributors not be subject to registration. Secondly, the
DEA has limited controls to a specific group of products. Thirdly, the
NPRM proposed the establishment of a threshold of 24.0 grams
pseudoephedrine base and therefore would allow for the purchase and
sale of up to a 120 day supply of pseudoephedrine for personal
legitimate medical use, without the application of regulatory
requirements. The proposed threshold was subsequently raised to 48.0
grams in this final rule. Lastly, the NPRM specifies that the threshold
quantity applies only to a single transaction.
(7) One commentor suggested that small package sizes would be
enormously expensive to divert and implied that these products
therefore would not be cost effective sources of pseudoephedrine as
precursor material for the synthesis of methamphetamine. Prior to
proposing these regulations, however, the DEA reviewed the cost of
various brand name pseudoephedrine products in various package sizes
and formulations. The DEA undertook this examination for the specific
purpose of determining whether certain products should remain exempt
from the proposed regulations based solely on the fact that their use
in the synthesis of methamphetamine would not be financially
profitable. This review indicated that even the most expensive brand
name pseudoephedrine dosage form products (including the more expensive
syrups and products containing multiple active ingredients) would be
cost effective sources of precursor material.
(8) Several commentors stated that the DEA has not provided a
rationale for its selection of the group of drugs whose legal exemption
would be revoked. These commentors stated that the NPRM provides
insufficient scientific explanation as to why the exemption was removed
for certain products. One commentor challenged that its scientists
state that removal of pseudoephedrine in combination with
antihistamines, guaifenesin and dextromethorphan is at least as
difficult, if not more so, than analgesics and less efficient than from
liquids, syrup and soft gelatin capsules. The commentor further stated
that the DEA must consider whether the drug or group of drugs are
formulated in such a way that cannot be easily used in the illicit
production of controlled substances.
As stated in the NPRM, the DEA performed a review of the various
pseudoephedrine dosage forms and available combinations of ingredients
to determine which products are (1) formulated in such a way that the
product itself cannot be easily used in the illicit production of
methamphetamine; and (2) whether pseudoephedrine can be readily
recovered from the product. In making determinations as to which
product formulations should be subject to control, the DEA laboratory
system undertook a study which utilized different types of OTC
pseudoephedrine dosage forms and combinations of ingredients to see
which of these formulations were most easily used in the clandestine
synthesis of controlled substances using the procedures most commonly
utilized by clandestine chemists. In addition, the study assessed
whether pseudoephedrine could be readily extracted using clandestine
laboratory techniques. In making its conclusions regarding which
products and formulations should be regulated, the DEA considered,
among other information, which products and formulations required
modifications to normal clandestine manufacturing or extraction
procedures and therefore required a more extension knowledge of
chemistry. In response to comments that the DEA should elaborate
further on its studies to determine the simplicity with which products
may be converted to methamphetamine, the disclosure of such information
would only serve to educate clandestine laboratory operators as to how
to better produce methamphetamine and reveal which pseudoephedrine
formulations provide the easiest source of precursor material.
(9) One commentor questioned the basis for DEA's claim that certain
formulations and products can not be readily recovered. The commentor
stated that liquids would be easier to convert and that the DEA
provided no explanation as to why aspirin, acetaminophen or ibuprofen
combinations are less likely to be diverted for clandestine use. In
response to this comment, in attempting to manufacture methamphetamine
from liquid formulations and combination products having formulations
which contained an analgesic, DEA found that when a typical clandestine
laboratory procedure was utilized, it was necessary to modify the
manufacturing procedure in order to achieve acceptable results.
In determining which products should be subject to CSA chemical
regulatory controls, the DEA has taken a conservative approach. As
such, exemptions are being removed only for those products which did
not require procedural changes when a typical methamphetamine
clandestine manufacturing procedure was utilized. The exemptions are
being retained for all pseudoephedrine products which required changes
in these procedures.
(10) Several commentors stated that the NPRM would require training
of employees to recognize a threshold transaction. The DEA acknowledges
that retail distributors will need to provide instruction to their
personnel so that
[[Page 40986]]
they are able to recognize an above-threshold transaction. In
consultation with industry, the DEA has been informed that the most
common package sizes range from 10 to 60 solid dosage units per package
at the retail level. In proposing the establishment of the threshold of
24.0 grams pseudoephedrine base the DEA specifically ensured that such
common package sizes are not adversely impacted.
DEA believes that the identification of above-threshold
transactions will not be difficult, given package sizes routinely sold
at the retail level. For example, one commentor stated that the vast
majority of their brand name pseudoephedrine product is sold in package
sizes of 24 dosage units or less with each unit containing 30 mg or 60
mg pseudoephedrine hydrochloride. Such packages would only contain
between 0.6 grams and 1.2 grams pseudoephedrine base. An above-
threshold purchase of greater than 24.0 grams of pseudoephedrine base
contained in such products would be conspicuous and thereby difficult
to conceal. An individual would have to purchase more than 976 dosage
units of a 30 mg/dosage unit product. In the package size indicated,
this would involve the purchase of more than 40 packages of such a
product in a single transaction. For a 60 mg per dosage unit product
packaged in bottles of 24 tablets, an above-threshold purchase would
involve the purchase of over 488 dosage units in greater than 20
packages. Given the large size of the above transactions, it is not
unreasonable to expect that retail distributors should be able to
instruct personnel to recognize such conspicuous quantities in a single
transaction.
Several commentors stated that in determining whether a transaction
is above-threshold, retail distributors would have to differentiate
between exempt and non-exempt pseudoephedrine products. These
commentors stated that in the event that exempt and non-exempt
pseudoephedrine products are both purchased in a single transaction, it
will be difficult to determine whether the threshold has been exceeded.
In response to this comment, if both exempt and non-exempt
pseudoephedrine products are purchased in a single transaction, the
quantities of OTC cough-cold medication necessary to exceed the
pseudoephedrine threshold would be even larger and more conspicuous
than the quantities outlined above. The comment submitted by the
National Association of Chain Drug Stores (NACDS) mentioned point of
sale scanning as a possible way to monitor threshold quantities in a
single transaction.
While the DEA believes that such transactions at the proposed
threshold of 24.0 grams would be conspicuous and therefore easy to
identify, the DEA has decided that in an effort to further reduce any
potential burden on retailers, the threshold for pseudoephedrine will
be increased to 48.0 grams. This quantity is double the proposed
threshold. This would allow for the below-threshold purchase of 976
dosage units of a pseudoephedrine 60 mg product or 1953 dosage units of
a 30 mg product in a single transaction. Such transactions would be
sufficient for at least a 244 day supply of pseudoephedrine in a single
transaction at the maximum recommended FDA dosage.
Concerns regarding the difficulty in providing instruction to
employees to recognize a threshold transaction are therefore minimized
by the implementation of the larger threshold and the magnitude of an
above-threshold transaction. To further assist retailers in providing
instruction to employees, the DEA will make available for distribution
through industry associations, notices which provide further
clarification of which pseudoephedrine products are regulated and
guidance in recognizing a threshold transaction.
Given the large quantities of product necessary to exceed a
threshold of 48.0 grams, it is not unreasonable to expect that retail
distributors should be able to provide the rudimentary instruction
necessary to recognize such conspicuous quantities. Retail distributors
dealing only in quantities below these levels will not have to register
with DEA and will not have to maintain records of transactions.
Therefore, any impact on retail distributors is minimal
While the DEA has established the threshold at 48.0 grams
(pseudoephedrine base) to permit the unregulated purchase of up to a
244 day supply at the maximum FDA recommended dosage of 240 mg
pseudoephedrine HCl per day, the DEA is in no way encouraging consumers
to exceed or ignore the warnings contained on the labeling of these
pseudoephedrine products. This labeling, which is required by the FDA,
warns that ``if symptoms do not improve within 7 days or are
accompanied by a fever, consult a doctor''. In addition, some
pseudoephedrine products warn the consumer ``Do not take this product
for more than 7 days.'' Therefore, when the product is used in a manner
consistent with its labeling, the purchase of a threshold quantity of
48.0 grams, will far exceed a 244 day supply of pseudoephedrine for
personal legitimate medical use.
(11) Several commentors stated that before taking action against
OTC pseudoephedrine products, the DEA should first use the enforcement
tools such as registration requirements that Congress imposed under the
DCDCA. In response to this comment, the DCDCA amended 21 U.S.C. 822 and
21 U.S.C. 823 to require registration of handlers of List I chemicals.
However, the DCDCA stated that registration ``shall not be required for
the distribution of a drug product that is exempted under section
102(39)(A)(iv).'' Therefore, registration requirements implemented
under the DCDCA would not pertain to handlers of OTC pseudoephedrine
products lawfully marketed under the Federal Food, Drug and Cosmetic
Act. Since the DEA has already seen a shift toward the utilization of
OTC pseudoephedrine products in clandestine laboratories, the
registration of only bulk handlers of pseudoephedrine and ephedrine
products would have no direct beneficial impact on preventing the
diversion of these products.
(12) One commentor raised concerns that under the CSA chemical
regulatory provisions, records will have to be maintained for a period
of 4 years rather than a 2 year period. The commentor further states
that while normal business records are adequate to meet the CSA
regulatory requirements, the retention requirement will increase the
recordkeeping burden. In response to this comment, the 4 year
recordkeeping requirement for the chemical control provisions of the
CSA was legislated by Congress (21 U.S.C. 830) and therefore is not
within DEA's authority to change.
(13) One commentor requested a 45 day grace period allowing sales
of covered products pending DEA action on registration applications.
The commentor noted that, as written, the NPRM appears to prohibit
above-threshold pseudoephedrine sales between the date the rule is
finalized and the date registration is approved by DEA.
DEA agrees. In response to this comment, DEA has determined that
each person required to obtain a registration because of implementation
of this rule will be temporarily exempted from the registration
requirement until the person has made proper application and the
Administration has approved or denied such application, provided that
the
[[Page 40987]]
application has been submitted within 45 days following the effective
date of this regulation. (Section 1310.09 has been modified to reflect
this.) This exemption only applies to the registration requirement; all
other chemical control requirements set forth under the CSA will be in
full force and effect as of the effective date of this regulation.
(14) One commentor noted that its independent distributors do not
squarely meet the definition of ``retail distributors'' as defined as
sales directly to ``walk-in'' customers for personal use. This
commentor stated that most of their transactions are face-to-face but
not walk-in. The commentor requested that the definition of retail
distributor as set forth in Section 1309.02(g) be modified.
DEA agrees. Therefore, the DEA is modifying Secs. 1309.28 and
1309.02(f) to reflect that the term retail distributor means a
distributor whose List I chemical activities are restricted to the sale
of drug products that are regulated as List I chemicals pursuant to
Sec. 1310.01(f)(1)(iv), in face-to-face transactions directly to
individuals for personal use. The intent of this provision is for the
distributor to be in the physical presence of the individual who is
acquiring the pseudoephedrine for personal use.
In addition, the commentor noted that some distributions are from
one of their independent distributors to another of their independent
distributors. The commentor requested that these sales also be exempt
since they are primarily below-threshold. However, the DEA has
determined that these types of transactions do not meet the definition
of retail distributor since such transactions would be intended for
further distribution and would not be intended for personal use.
(15) One commentor requested clarification of the registration
requirement for pharmacies. This commentor stated that because
pharmacies are already registered, it could be implied that they would
be subject to recordkeeping and reporting requirements.
In response to this request, pharmacies that do not engage in
above-threshold transactions are treated the same as other retail
distributors. However, pharmacies that sell above-threshold quantities
in a single transaction will not meet the definition of retail
distributor and will be required to register with DEA. In order to
avoid the imposition of duplicative registration requirements on these
registrants, 21 CFR 1309.25 provides for an exemption from chemical
registration for controlled substance registrants. Although these
entities will not be required to obtain a separate chemical
registration, they will be required to comply with other chemical
regulatory requirements such as recordkeeping and reporting
requirements. Therefore, these pharmacies which sell above-threshold
quantities of regulated pseudoephedrine products will be required to
maintain a record of each transaction which exceeds the threshold in a
single transaction and report any suspicious regulated transactions to
the DEA.
(16) Two commentors inquired whether the exemption for their
specific pseudoephedrine products could be reinstated if the products
were modified in such a way that prevented their use as precursor
material. In response to this comment, the DCDCA includes specific
provisions for reinstatement of exemptions for particular drug products
(21 U.S.C. 814). The DCDCA provides that upon application by a
manufacturer of a particular drug product that has been removed from
exemption, the exemption shall be reinstated with respect to the
particular drug product if it is determined to be manufactured and
distributed in a manner that prevents diversion. The DCDCA further
states that factors to be considered shall include (1) the package
sizes and manner of packaging of the drug product; (2) the manner of
distribution and advertising of the drug product; (3) evidence of
diversion of the drug product; (4) any actions taken by the
manufacturer to prevent diversion of the drug product; and (5) such
other factors as are relevant to and consistent with the public health
and safety.
One commentor raised concerns regarding the limitation that only
manufacturers may petition for reinstatement of the regulatory
exemption of a specific product. This commentor stated that the
regulations should be amended to allow distributors of private-brand
products or any interested party to submit applications for
reinstatement of exemption. In response to this request, please note
that this provision was legislated by Congress under the DCDCA (21
U.S.C. 814) and specifies that ``on application by a manufacturer of a
particular drug product'' the exemption may be reinstated if the
particular drug product is manufactured or distributed in a manner that
prevents diversion. Any such change would require Congressional
legislation.
(17) Two commentors requested a hearing on the proposal pursuant to
21 U.S.C. 875. In response to these requests, unlike other rulemaking
conducted pursuant to the CSA, the present rulemaking presents no
requirement that the rule be made on the record after opportunity for a
hearing. For example, 21 U.S.C. 811(a) requires the opportunity for a
hearing whenever there is a proposed rescheduling of controlled
substances. In addition, 21 U.S.C. 875 identifies general powers
available to the DEA when exercising its authority under the CSA. Thus,
21 U.S.C. 875 complements existing hearing provisions under the CSA
rather than conferring independent hearing authority. In any event, the
DEA believes that the notice and comment conducted pursuant to this
rulemaking enabled interested parties to provide meaningful comment on
the final rule.
(18) One commentor stated that the rule is a significant regulatory
action and should be reviewed by the Office of Management and Budget.
This commentor also noted that the rule could have an annual effect on
the economy of $100 million or more.
As outlined above, these regulations go to great lengths to avoid
impacting retail distribution of these OTC products. Since the vast
majority of distributors who handle these products will not need to
register or maintain records, the economic impact of this proposal is
extremely small. This rule is therefore not a significant regulatory
action.
Final Rule
After careful consideration of each of the above comments, this
regulation is finalized as follows:
Removal of Exemption
21 U.S.C. 814(a) provides that the Attorney General shall remove
from exemption under 21 U.S.C. 802(39)(A)(iv) and drug or group of
drugs that the Attorney General finds is being diverted to obtain a
listed chemical for use in the illicit production of a controlled
substance. 21 U.S.C. 814(b) further provides that in removing the
exemption for a drug or group of drugs, the Attorney General shall
consider (1) the scope, duration, and significance of the diversion,
(2) whether the drug or group of drugs is formulated in such a way that
it cannot be easily used in the illicit production of a controlled
substance and (3) whether the listed chemical can be readily recovered
from the drug or group of drugs.
Pseudoephedrine is available in a variety of dosage forms either as
single entity products or in combination with one or more other active
medicinal ingredients. While the majority of OTC pseudoephedrine
products currently used for the illicit production of
[[Page 40988]]
methamphetamine are single entity products, combination products have
been identified at clandestine laboratories. The DEA has reviewed the
various pseudoephedrine dosage forms and available combinations of
ingredients. Some of these products are formulated in such a way that
the product itself can be used in the illicit production of
methamphetamine; others are formulated in such a way that
pseudoephedrine can be readily recovered from the product; and some of
these products are formulated in such a way that the manufacture of
methamphetamine is impeded. Based on this analysis, the DEA has
determined that OTC solid dosage form products (i.e. tablets, capsules
and powder packets) lawfully marketed under the Federal Food, Drug, and
Cosmetic Act and which contain pseudoephedrine in combination with
acetaminophen, aspirin or ibuprofen are formulated in such a way that
pseudoephedrine cannot be readily recovered and these products are not
easily used as precursors for the illicit production of
methamphetamine. In addition, the DEA has determined that OTC liquids,
syrups and soft gelatin capsules, which are lawfully marketed under the
Federal Food, Drug, and Cosmetic Act and which contain pseudoephedrine
either as the sole active ingredient or in combination with other
active ingredients, are formulated in such a way that the
pseudoephedrine cannot be readily recovered and the products cannot be
easily used in the illicit production of methamphetamine.
Thus the DEA is removing the exemption under 21 CFR
1310.01(f)(1)(iv) and 21 CFR 1313.02(d)(1)(iv) for OTC solid dosage
form pseudoephedrine products (i.e. tablets, capsules and powder
packets) lawfully marketed under the Federal Food, Drug, and Cosmetic
Act, which do not contain therapeutically significant quantities of
acetaminophen, aspirin or ibuprofen. These products, which include
tablets, capsules and powder packets containing pseudoephedrine as the
sole active ingredient or in combination with one or more active
ingredients such as antihistamines, guaifenesin or dextromethorphan,
will be subject to the regulatory requirements of the CSA.
For purposes of this paragraph, the term ``therapeutically
significant quantities'' shall apply if the product formulation (i.e.
the qualitative and quantitative composition of active ingredients
within the product) is listed in current editions of the American
Pharmaceutical Association (APhA) Handbook of NonPrescription Drugs;
Drug Facts and Comparisons (published by Wolters Kluwer Company); or
USP DI (published by the authority of the United States Pharmacopeial
Convention, Inc.). For drug products having a formulation not found in
the above compendiums, the DEA Administrator shall determine, pursuant
to a written request as specified in Section 1310.14, whether the
active medicinal ingredients are present in quantities considered
therapeutically significant for purposes of this paragraph.
The exemption provided under 21 CFR 1310.01(f)(1)(iv) and 21 CFR
1313.02(d)(1)(iv) will remain for liquids, syrups, and soft gelatin
capsules containing pseudoephedrine (regardless of formulation) and any
type of solid dosage form product which contains pseudoephedrine in
combination with therapeutically significant quantities of either
acetaminophen, aspirin or ibuprofen provided that the product is
lawfully marketed under the Federal Food, Drug, and Cosmetic Act. In
addition, the final regulations allow pseudoephedrine prescription
products, regardless of the product formulation, to remain exempt from
the final regulations, given existing distribution and dispensing
requirements already imposed under the Federal Food, Drug and Cosmetic
Act.
While certain pseudoephedrine products remain exempt from the
regulatory controls of the CSA, all pharmaceutical products containing
pseudoephedrine are List I chemicals, and as such, are subject to the
criminal provisions of the CSA. Specifically, 21 U.S.C. 841(d) provides
that any person who possesses or distributes any listed chemical
knowing, or having reasonable cause to believe that it will be used to
manufacture a controlled substance, shall be fined in accordance with
Title 18, or imprisoned not more than 10 years, or both.
Pursuant to 21 U.S.C. 814(c), the DEA has considered the evidence
of diversion of the above listed pseudoephedrine products, the pattern
of diversion of ephedrine products, including combination products and
other relevant data, and has determined that the affected groups of
pseudoephedrine products is limited to that currently necessary to
prevent the diversion of pseudoephedrine products to illicit
methamphetamine laboratories.
Revision of Threshold
The threshold for pseudoephedrine is being changed from 1.0
kilogram to 48.0 grams pseudoephedrine base for domestic, import and
export transactions. Even if the exemption for certain OTC
pseudoephedrine products is eliminated, a 1.0 kilogram threshold is not
adequate to prevent the significant diversion of these pseudoephedrine
products to clandestine laboratories. The threshold of 1.0 kilogram of
pseudoephedrine base in equivalent to greater than 20,000
pseudoephedrine HCl 60 mg dosage units. Therefore the DEA is reducing
the threshold for pseudoephedrine. In order to ensure that OTC
pseudoephedrine products remain available to those individuals who
utilize these decongestants for legitimate medical purposes, the DEA is
establishing the threshold for pseudoephedrine at a level which will
have no impact on personal use. As such, individuals who purchase
below-threshold quantities intended for legitimate personal medical
use, and retailers who sell below-threshold quantities for use by
individuals for legitimate personal medical use, will not be adversely
impacted by these regulations.
The FDA has established a labeling requirement which sets the
maximum adult daily dosage of pseudoephedrine at 60 mg every 6 hours or
240 mg per day. A 244 day supply of pseudoephedrine at the maximum
daily recommended dose of 240 mg pseudoephedrine hydrochloride per day
is equivalent to 58.56 grams of pseudoephedrine hydrochloride or 47.97
grams pseudoephedrine base. Therefore the DEA is establishing a
threshold of 48.0 grams pseudoephedrine base. Such a threshold will
allow the purchase and sale of up to a 244 day supply of
pseudoephedrine for personal legitimate medical use at the maximum FDA
recommended dosage, without the application of regulatory requirements.
This will allow continued access to these products for legitimate use.
Waiver of Registration
In an effort to ensure the continued availability of
pseudoephedrine products for legitimate personal use at the retail
level, the DEA is providing a waiver from registration for any retail
distributor of regulated pseudoephedrine products. Therefore retail
distributors (defined under 21 CFR 1309.02) of regulated
pseudoephedrine products will not be required to obtain a DEA
registration to distribute personal use quantities of OTC
pseudoephedrine to individuals for legitimate medical use. The
authority for providing a waiver is clearly set forth in 21 U.S.C.
Section 822(d) whereby ``The Attorney General may, by regulation, waive
the requirement for registration of certain manufacturers,
[[Page 40989]]
distributors, or dispensers if he finds it consistent with the public
health and safety.''
As discussed, it is estimated that there are approximately 750,000
retail distributors of pseudoephedrine in the United States. Such a
waiver will benefit the vast majority of these distributors. Firms
engaging in above-threshold transactions of non-exempt pseudoephedrine
products, however, will not be considered retail distributors.
Therefore they will be required to obtain a DEA registration as a
distributor, maintain records as specified in 21 CFR 1310.04 and report
suspicious regulated transactions as specified in 21 CFR 1310.05
notification requirement. In addition, all importers, exporters and
other types of distributors (such as mail order distributors) of non-
exempt pseudoephedrine products will be required to register with the
DEA and will be subject to the full regulatory provisions of the CSA
Act and the Controlled Substances Import and Export Act.
Conclusion
The clandestine manufacture and abuse of methamphetamine are
serious national public health problems which require Federal action.
Companies operating on the fringe of legitimate commerce are supplying
these clandestine laboratories with needed precursor material such as
ephedrine and pseudoephedrine. In an effort to minimize the impact of
the final regulations on the legitimate industry, the DEA has examined
various options available.
The DEA is aware of the large scale legitimate use of OTC
pseudoephedrine products and their widespread distribution at retail
outlets. However, the DEA believes that the registration,
recordkeeping, reporting and notification requirements that have been
successfully used to limit the diversion of other chemicals to
clandestine laboratories are needed to control this problem.
The Attorney General has delegated authority under the CSA and all
subsequent amendments to the CSA to the Administrator of the DEA (28
CFR 0.100). The Administrator, in turn, has redelegated this authority
to the Deputy Administrator pursuant to 28 CFR 0.104.
The Deputy Administrator has reviewed this regulation and by
approving it certifies that while this regulation will necessitate that
retail distributors of regulated pseudoephedrine products instruct
employees to recognize a threshold transaction, the level of
instruction needed is minimal, given the magnitude of the quantities
needed to exceed the threshold in a single transaction. In addition,
the vast majority of retail distributors deal only in quantities far
below the threshold in a single transaction and therefore will not need
to register with the DEA and will not need to maintain records.
Therefore the Deputy Administrator certifies that this regulation will
not have a significant economic impact on a substantial number of small
entities.
The Drug Enforcement Administration has determined that this rule
is not a ``significant regulatory action'' under Executive Order 12866
Section 3(f) and the Office of Management and Budget (OMB) has waived
its review under section 6(a)(3)(A) of the order.
This final action has been analyzed in accordance with the
principles and criteria in Executive Order 12612, and it has been
determined that the final rule does not have sufficient federalism
implications to warrant the preparation of a Federalism Assessment.
List of Subjects
21 CFR Part 1309
Administrative practice and procedure, Drug traffic control, List I
and List II chemicals, Security measures.
21 CFR Part 1310
Drug traffic control, List I and II chemicals, Reporting and
recordkeeping requirements.
21 CFR Part 1313
Drug Traffic Control, Exports, Imports, List I and II chemicals,
Transshipment and in-transit shipments.
For reasons as set out above, 21 CFR Parts 1309, 1310 and 1313 are
amended as follows:
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 1309.02 is amended by revising paragraph (g) to read as
follows:
* * * * *
(f) The term retail distributor means a distributor whose List I
chemical activities are restricted to the sale of drug products that
are regulated as List I chemicals pursuant to Section 1310.01(f)(1)(iv)
of this chapter, in face-to-face transactions directly to individuals
for personal use. For purposes of Sec. 1309.28, sale for personal use
means the sale of below threshold quantities in a single transaction to
an individual for legitimate medical use.
3. Section 1309.28 is added to read as follows:
Sec. 1309.28 Exemption of retail distributors of certain
pseudoephedrine products.
The requirement of registration is waived for any retail
distributor, for the distribution of any product containing
pseudoephedrine that is regulated pursuant to
Sec. 1310.01(f)(1)(iv)(A)(2) of this chapter. The term retail
distributor, as defined in Sec. 1309.02(f), means a distributor whose
List I chemical activities are restricted to the sale of drug products
that are regulated as List I chemicals pursuant to
Sec. 1310.01(f)(1)(iv) of this chapter, in face-to-face transactions
directly to individuals for personal use. For purposes of this
paragraph, sale for personal use means the sale of below-threshold
quantities in a single transaction to an individual for legitimate
medical use. The cumulative threshold requirements for multiple
transactions within a calendar month will not apply to sales for
personal use of any product containing pseudoephedrine that is
regulated pursuant to Sec. 1310.01(f)(1)(iv)(A)(2) of this chapter.
(The threshold of 48.0 grams pseudoephedrine base is equivalent to 976
pseudoephedrine hydrochloride 60 mg dosage units.)
4. Section 1309.71 is 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 drugs containing
List I chemicals that are regulated pursuant to
Sec. 1310.01(f)(1)(iv)(A)(1) of this chapter are distributed, such
drugs will be stocked behind a counter where only employees have
access. This requirement does not apply to drugs containing List I
chemicals that are regulated pursuant to Sec. 1310.01(f)(1)(iv)(A)(2)
of this chapter.
* * * * *
21 CFR part 1310 is amended as follows:
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 1310.01 is amended by revising paragraph (f)(1)(iv)(A)
to read as follows:
[[Page 40990]]
Sec. 1310.01 Definitions.
* * * * *
(f) * * *
(1) * * *
(iv) * * *
(A)(1) The drug contains ephedrine or its salts, optical isomers,
or salts of optical isomers as the only active medicinal ingredient or
contains ephedrine or its salts, optical isomers, or salts of optical
isomers and therapeutically insignificant quantities of another active
medicinal ingredient. For purposes of this paragraph, the term
``therapeutically insignificant quantities'' shall apply if the product
formulation (i.e. the qualitative and quantitative composition of
active ingredients within the product) is not listed in current
editions of the American Pharmaceutical Association (APhA) Handbook of
NonPrescription Drugs; Drug Facts and Comparisons (published by Wolters
Kluwer Company); or USP DI (published by the authority of the United
States Pharmacopeial Convention, Inc.); or the product is not listed in
Section 1310.15 as an exempt drug product. For drug products having
formulations not found in the above compendiums, the Administrator
shall determine, pursuant to a written request as specified in Section
1310.14, whether the active medicinal ingredients are present in
quantities considered therapeutically significant for purposes of this
paragraph; or
(2) The drug is an over-the-counter (OTC) solid dosage form product
(tablet, capsule or powder packet) which contains pseudoephedrine or
its salts, optical isomers, or salts of optical isomers but does not
contain either acetaminophen, aspirin or ibuprofen in therapeutically
significant quantities. (This provision applies only to OTC
pseudoephedrine products and does not include those pseudoephedrine
products dispensed only pursuant to a prescription.) For purposes of
this paragraph, the quantities of either acetaminophen, aspirin or
ibuprofen present in a pseudoephedrine drug product shall be considered
to be present in ``therapeutically significant quantities'' if the
product formulation (i.e. the qualitative and quantitative composition
of active ingredients within the product) is listed in current editions
of the American Pharmaceutical Association (APhA) Handbook of
NonPrescription Drugs; Drug Facts and Comparisons (published by Wolters
Kluwer Company); or USP DI (published by the authority of the United
States Pharmacopeial Convention, Inc.); or the product is listed in
Sec. 1310.15 as an exempt drug product. For drug products having a
formulation not found in the above compendiums, the Administrator shall
determine, pursuant to a written request as specified in Sec. 1310.14,
whether the active medicinal ingredients (acetaminophen, aspirin or
ibuprofen) are present in quantities considered therapeutically
significant for purposes of this paragraph; or
* * * * *
3. Section 1310.04 is amended by revising the introductory text in
paragraph (f) and paragraph (f)(1)(x) to read as follows:
Sec. 1310.04 Maintenance of records.
* * * * *
(f) Except as provided in Sec. 1309.28 of this chapter for sales
for personal use, for those listed chemicals for which thresholds have
been established, the quantitative threshold or the cumulative amount
for multiple transactions within a calendar month to be utilized in
determining whether a receipt, sale, importation, or exportation is a
regulated transaction is as follows:
(1) List I Chemicals:
------------------------------------------------------------------------
Chemical Threshold by base weight
------------------------------------------------------------------------
(x) Pseudoephedrine, its salts, optical 48 grams.
isomers and salts of optical isomers.
------------------------------------------------------------------------
* * * * *
4. Section 1310.09 is revised to read as follows:
Sec. 1310.09 Temporary exemption from registration.
Each person required by section 3(b) of the Domestic Chemical
Diversion Control Act of 1993 (Pub. L. 103-200, effective April 16,
1994), to obtain a registration to manufacture, distribute, import, or
export a list I chemical (other than those list I chemicals exempted
under Sec. 1310.01(f)(1)(iv)), is temporarily exempted from the
registration requirement. The registration exemption will remain in
effect for each person until the person has made proper application for
registration and the Administration has approved or denied such
application, provided that the application has been submitted within 45
days following the effective date of the regulations in part 1309
implementing the Domestic Chemical Diversion Control Act of 1993. In
addition, each person required to obtain a registration to manufacture,
distribute, import, or export a drug or group of drugs removed from
exemption under Sec. 1310.01(f)(1)(iv) is also temporarily exempted
from the registration requirement. The registration exemption will
remain in effect for each person until the person has made proper
application for registration and the Administration has approved or
denied such application, provided that the application has been
submitted within 45 days following the effective date of the regulation
which eliminates the exemption under Sec. 1310.01(f)(1)(iv). These
registration exemptions apply only to registration; all other chemical
control requirements set forth in the Domestic Chemical Diversion
Control Act of 1993 and in parts 1310 and 1313 of this chapter remain
in full force and effect.
5. Section 1310.14 is amended by revising the heading and by
revising paragraph (a) to read as follows:
Sec. 1310.14 Exemption of certain ephedrine or pseudoephedrine
combination drug products.
(a) Any manufacturer of a drug product containing ephedrine in
combination with another active medicinal ingredient, the product
formulation of which is not listed in the compendiums set forth in
Sec. 1310.01(f)(1)(iv)(A)(1), or any manufacturer of a drug product
containing pseudoephedrine in combination with acetaminophen, aspirin
or ibuprofen, the product formulation of which is not listed in the
compendiums set forth in Sec. 1310.01(f)(1)(iv)(A)(2), may request that
the Administrator exempt the product as one which contains ephedrine
together with therapeutically significant quantities of the other
active medicinal ingredients or pseudoephedrine in combination with
therapeutically significant quantities of acetaminophen, aspirin or
ibuprofen.
* * * * *
6. Section 1310.15 is amended by revising the heading, by revising
paragraph (a), and by revising paragraph (d) to read as follows:
Sec. 1310.15 Exempt combination drug products containing ephedrine or
pseudoephedrine.
(a) The drug products containing ephedrine in combination with
therapeutically significant quantities of another active medicinal
ingredient, or pseudoephedrine in combination with therapeutically
significant quantities of acetaminophen, aspirin, or ibuprofen; listed
in paragraph (d) of this section, have been exempted by the
Administrator from application of sections 302, 303, 310, 1007, and
1008 of the Act (21 U.S.C. 822-3, 830, and 957-8) to the extent
described in
[[Page 40991]]
paragraphs (b), (c), and (d) of this section. * * *
(d) In addition to the drug products listed in the compendium set
forth in Secs. 1310.01(f)(1)(iv)(A)(1) and 1310.01(f)(1)(iv)(A)(2), the
following drug products, in the form and quantity listed in the
application submitted (indicated as the ``date'') are designated as
exempt drug products for the purposes set forth in this section:
Exempt Drug Products Containing Ephedrine in Combination With Therapeutically Significant Quantities of Another
Active Medicinal Ingredient and Exempt Drug Products Containing Pseudoephedrine in Combination With
Therapeutically Significant Quantities of Acetaminophen, Aspirin or Ibuprofen
----------------------------------------------------------------------------------------------------------------
Supplier Product name Form Date
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[Reserved]........................... ....................... ....................... .......................
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21 CFR part 1313 is amended as follows:
PART 1313--[AMENDED]
1. The authority citation for part 1313 continues to read as
follows:
Authority: 21 U.S.C. 802, 830, 871(b), 971.
2. Section 1313.02 is amended by revising paragraph (d)(1)(iv)(A)
to read as follows:
Sec. 1313.02 Definitions.
* * * * *
(d) * * *
(1) * * *
(iv) * * *
(A)(1) The drug contains ephedrine or its salts, optical isomers,
or salts of optical isomers as the only active medicinal ingredient or
contains ephedrine or its salts, optical isomers, or salts of optical
isomers and therapeutically insignificant quantities of another active
medicinal ingredient. For purposes of this paragraph, the term
``therapeutically insignificant quantities'' shall apply if the product
formulation (i.e. the qualitative and quanitative composition of active
ingredients within the product) is not listed in current editions of
the American Pharmaceutical Association (APhA) Handbook of
NonPrescription Drugs; Drug Facts and Comparisons (published by Wolters
Kluwer Company); or USP DI (published by the authority of the United
States Pharmacopeial Convention, Inc.); or the product is not listed in
Sec. 1310.15 as an exempt drug product. For drug products having
formulations not found in the above compendiums, the Administrator
shall determine, pursuant to a written request as specified in Section
1310.14, whether the active medicinal ingredients are present in
quantities considered therapeutically significant for purposes of this
paragraph; or
(2) The drug is an over-the-counter (OTC) solid dosage form product
(tablet, capsule or powder packet) which contains pseudoephedrine or
its salts, optical isomers, or salts of optical isomers, but does not
contain either acetaminophen, aspirin or ibuprofen in therapeutically
significant quantities. (This provision applies only to OTC
pseudoephedrine products and does not include those pseudoephedrine
products dispensed only pursuant to a prescription.) For purposes of
this paragraph, the quantities of either acetaminophen, aspirin or
ibuprofen present in a pseudoephedrine drug product shall be considered
to be present in ``therapeutically significant quantities'' if the
product formulation (i.e. the qualitative and quantitative composition
of the active ingredients within the product) is listed in current
editions of the American Pharmaceutical Association (APhA) Handbook of
NonPrescription Drugs; Drug Facts and Comparisons (published by Wolters
Kluwer Company); or USP DI (published by the authority of the United
States Pharmacopeial Convention, Inc.); or the product is listed in
Sec. 1310.15 as an exempt drug product. For drug products having a
formulation not found in the above compendiums, the Administrator shall
determine, pursuant to a written request as specified in Sec. 1310.14,
whether the active medicinal ingredients (acetaminophen, aspirin or
ibuprofen) are present in quantities considered therapeutically
significant for purposes or this paragraph; or
* * * * *
Dated: May 9, 1996.
Stephen H. Greene,
Deputy Administrator.
Note: The following text will not appear in the Code of Federal
Regulations.
Appendix
On May 9, 1996 the Deputy Administrator of the Drug Enforcement
Administration (DEA) signed the above rule which finalizes a Notice
of Proposed Rulemaking (NPRM) published in the Federal Register on
October 31, 1995 (60 FR 55348). At the request of the Office of
Management and Budget (OMB) Office of Information and Regulatory
Affairs, the rule was provided to OMB for review on May 16, 1996.
OMB cleared the final rule for publication on July 22, 1996. In the
interim, however, 5 U.S.C. 605(b) was amended to require that at the
time of publication of a final rule, the agency shall publish a
statement providing the factual basis for the certification that the
rule will not have a significant economic impact on a substantial
number of small entities. While the issue of whether this rule will
have a significant economic impact on a substantial number of small
entities was addressed in this final rule, DEA is providing the
information in this appendix to insure compliance with the
amendments to 5 U.S.C. 605(b), which became effective on June 27,
1996, after the final rule was signed.
In making a determination that the rule will not have a
significant economic impact on a substantial number of small
entities, the DEA conducted a review of the affected industry. In
performing this review, the DEA carefully considered regulatory
alternatives and the potential impact of each regulatory alternative
on the affected industry and small businesses in particular.
The clandestine manufacture and abuse of methamphetamine are
serious national public health problems which require Federal
action. Pseudoephedrine products produced to meet legitimate medical
needs are diverted by clandestine laboratory operators for use as
precursor material for the production of methamphetamine.
The DEA is aware of the large scale legitimate use of the over-
the-counter (OTC) pseudoephedrine products and their widespread
distribution at retail outlets. However, the DEA believes that the
registration, recordkeeping, reporting and notification requirements
that have been successfully used to limit the diversion of other
chemicals to clandestine laboratories are needed to control this
problem. In writing this regulation, the DEA considered various
levels of regulatory control on pseudoephedrine products. These
options ranged from the establishment of no controls on
pseudoephedrine products to the imposition of the full extent of
controls permitted under existing statutory authority. Given the
magnitude of documented deaths due to methamphetamine and the untold
cost of violence and crime associated with methamphetamine abuse,
the DEA determined that some measure of control is necessary and
therefore the establishment of no regulatory control on
pseudoephedrine products is not a viable option. However, the burden
associated with the application of the full extent of regulatory
controls, including the regulation of all pseudoephedrine products,
a threshold of zero (whereby records would be required for all
transactions regardless of size), and the imposition of a
registration requirement on all retailers, would produce an
excessive burden on legitimate industry. Given the potentially large
impact of such regulatory action, the DEA sought to impose less
stringent regulatory requirements so as not to adversely impact
legitimate businesses.
In the proposed regulation published in October of 1995, the DEA
documented that it had determined that approximately 750,000 retail
distributors and an
[[Page 40992]]
undetermined number of other distributors would be impacted if
pseudoephedrine products were made subject to the full extent of the
Controlled Substances Act (CSA) chemical regulatory provisions.
However, in recognizing the need to limit the regulatory impact on
handlers of pseudoephedrine products to a level adequate to prevent
the large scale diversion of these products of clandestine use, the
DEA has taken significant steps to reduce or eliminate the controls
on retailers who sell these pseudoephedrine products of legitimate
consumers.
First, given the large number of retail distributors who handle
these products in the United States, the DEA has provided a waiver
from registration for these distributors. Thus, the regulations
primarily impact distributors who are not classified as retail
distributors. These distributors include mail-order and wholesale
distributors. The DEA has attempted to identify the number of firms
which will be impacted by these regulations. This review included
consultation with industry associations and other Federal and local
government agencies. These entities were only able to identify a
limited number of firms which would become subject to regulatory
controls as a result of this rule.
Secondly, the DEA has limited controls to a specific group of
products which have been demonstrated to be most readily used for
illicit purposes. This approach provides effective protection
against diversion while minimizing the burden on industry. Thirdly,
the proposed regulations allowed for the purchase and sale of up to
a 120 day supply of pseudoephedrine for personal legitimate medical
use in a single transaction, without the application of regulatory
requirements. Based on comments, in the final rule the DEA doubled
the amount to a 244 day supply (976 pseudoephedrine 60 mg dosage
units) in a single transaction. Despite concerns that traffickers
may exploit this increased threshold, DEA allowed the increase to
ensure continued public access to the products for personal
legitimate medical use at the retail level. A secondary benefit of
this threshold is the fact that many retail outlets do not stock
such quantities of pseudoephedrine products, thus obviating concerns
regarding their regulation.
Prior to writing the proposed regulation, the DEA consulted with
the National Wholesale Druggists Association (NWDA) in an effort to
determine the potential size of the impacted industry. According to
NWDA sources, there are approximately 750,000 retail distributors in
the U.S. which sell over-the-counter pseudoephedrine products. In
addition, the DEA met with the Nonprescription Drug Manufacturers
Association (NDMA) regarding the U.S. pseudoephedrine market to
obtain input on the distribution of pseudoephedrine for legitimate
medical use. NDMA has further confirmed that there are approximately
750,000 retail distributors of over-the-counter products in the U.S.
NDMA, which stated that its members account for the manufacture of
over 90 percent of the over-the-counter drugs marketed domestically,
informed DEA that member companies primarily distribute
pseudoephedrine in package size ranging from 10 to 60 solid dosage
units per package. In an effort to reduce the impact upon those who
sell and purchase pseudoephedrine products at the retail level, the
DEA established a threshold that was well above the standard package
size manufactured by NDMA members and distributed by retail
distributors. The threshold of 48.0 grams pseudoephedrine base is
equivalent to 976 pseudoephedrine hydrochloride 60 mg dosage units.
To further quantify the potential impact of the regulations the
DEA has obtained data from the U.S. Bureau of the Census, 1992
Census of Retail Trade. This data documents the number of retail
trade establishments based upon Standard Industrial Classification
(SIC). This data documents a total of 552,000 potential retailers of
pseudoephedrine (to include 63,000 General Merchandise Stores SIC
Code 53, 278,000 Food Stores SIC Code 54, 120,000 Gas Service
Stations SIC Code 554, 51,000 Drug Stores and Proprietary Stores SIC
Code 591 and 40,000 Liquor Stores SIC Code 592).
In addition the DEA has obtained data from the U.S. Department
of Agriculture, Economic Research Service, Food Marketing Review
which breaks down the number of retail food stores by category for
1993. Of the 249,600 retail food stores documented, 49,500 are
classified as convenience stores and 89,800 as Superettes (defined
as being primarily self-service in operation, selling a wide variety
of food and non-food products with annual sales below $2.5 million.)
In addition, the data documents 3,100 Warehouse Stores (which are
defined as containing limited product variety and fewer services,
while incorporating case lot stocking and shelving practices) and
500 Superwarehouse Retail Outlets (defined as larger warehouses that
offer expanded product variety.)
Convenience Stores appear not to even shelf threshold quantities
of pseudoephedrine. Such entities which do not stock a threshold
quantity and therefore would not exceed the threshold quantities in
a single transaction, would not be impacted by these regulations.
The 3,600 Warehouse and Superwarehouse outlets, however, may choose
to distribute above threshold quantities and therefore would not
meet the definition of ``retail distributor''. These entities would
therefore be required to register with the DEA and maintain a record
of only those transactions which exceed the threshold of 48.0 grams
pseudoephedrine base.
Additionally, the National Association of Chain Drug Stores
(NACDS) noted point of sale scanning as a possible way to monitor
threshold quantities of regulated product in a single transaction.
The DEA has obtained data on the percent of Supermarkets having
point of sale scanning checkouts. A 1993 study performed by the
Maclean Hunter Media, Inc., Stamford, CT, 61st Annual Report of the
Grocery Industry indicated that approximately 85 percent of
independent and chain supermarkets had scanning checkouts. The
percent of Supermarkets having this capability was up from 71
percent in 1990. NACDS's suggestion, therefore, appears to be
applicable to the Supermarket industry as well.
The primary impact of the regulations will be upon those
entities not classified as retail distributors. Such entities
include mail-order distributors and wholesale distributors. The DEA
has attempted to quantify the number of these distributors in the
U.S. The NWDA informed the DEA that its 1993 Operating Survey
indicated that 70 full-line drug wholesalers (who distribute both
prescription and over-the-counter products) distributed nearly 80
percent of the prescription drugs in the U.S. in 1993. These full-
line drug wholesalers operated approximately 230 distribution
centers. Information provided by NWDA indicates that due to
consolidation within the drug wholesale industry, there are
currently only approximately 50 full-line wholesale distributors
supplying this market in the U.S.
These firms are already CSA registrants and as such would not
need to obtain a separate registration under the proposed
regulations (Title 21 Code of Federal Regulations 1309.25). In
addition, the impact upon these full-line distributors will be
minimized since, pursuant to Sec. 1310.06(b), normal business
records shall be considered adequate if they contain the information
required in 21 CFR 1310.06(a) and are readily retrievable from other
business records.
The NWDA was unable to provide estimates of the percentage of
the over-the-counter market supplied by these full-line distributors
but informed DEA of the existence of other smaller wholesale
distributors who only distribute over-the-counter pseudoephedrine
products. These wholesale distributors will be impacted by the
proposed regulations since they will be required to register with
DEA and ensure that records maintained are adequate to meet the
requirements under Section 1310.06.
In addition to contact with the industry associations, the DEA
has contacted the National Association of Boards of Pharmacy and
several State Boards of Pharmacy in an attempt to quantify the
number of these distributors currently operating in the U.S. which
will be impacted by these regulations. These various industry and
professional groups contacted by the DEA were unable to quantify the
number of these firms operating in the U.S. or identify a
professional association which represents these business entities.
However, in the instance where a state was able to identify the
number of firms licensed to distribute drug products into that
state, the number of firms was not large, (e.g. As stated in the
proposed rule, the State of Idaho licenses all business entities
which distribute over-the-counter products into or within the state.
The Idaho Board of Pharmacy indicated that the majority of the
distributors are actually outside of Idaho and that only 418
distributors are licensed to distribute drug products into Idaho.)
Conclusion
The DEA has substantially limited the impact the regulations
will have on pseudoephedrine handlers. The requirements have been
designed to ensure that the vast majority of retailers of
pseudoephedrine will not be subject to regulation. Retail
distributors will not be required to register or maintain records
unless they engage in
[[Page 40993]]
transactions involving a limited group of pseudoephedrine products
in quantities that exceed a 244 day supply in a single transaction.
Most retail distributors do not engage in such transactions and
therefore will not be subject to these regulations.
The proposed and final rule, in conjunction with this appendix
document the various provisions which were specifically provided in
order to minimize the impact on small businesses. These provisions
were the result of a reasoned analysis of the potential impact of
implementation of the full extent of CSA regulations on the affected
industry and small businesses in particular. In providing for these
special provisions, DEA gave special care and consideration to
industry concerns and given these provisions, ensured that these
regulations ``will not have significant impact on a substantial
number of small entities''.
Dated: July 30, 1996.
Stephen H. Greene,
Deputy Administrator.
[FR Doc. 96-19846 Filed 8-6-96; 8:45 am]
BILLING CODE 4410-09-M
