Established Assessment of Annual Needs for the List I Chemicals Ephedrine, Pseudoephedrine, and Phenylpropanolamine for 2007, 53908-53911 [E7-18523]
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53908
Federal Register / Vol. 72, No. 182 / Thursday, September 20, 2007 / Notices
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. DEA–300F]
Established Assessment of Annual
Needs for the List I Chemicals
Ephedrine, Pseudoephedrine, and
Phenylpropanolamine for 2007
Drug Enforcement
Administration (DEA), Justice.
ACTION: Notice of assessment of annual
needs for 2007.
AGENCY:
SUMMARY: This notice establishes the
initial year 2007 assessment of annual
needs for certain List I chemicals in
accordance with the Combat
Methamphetamine Epidemic Act of
2005 (CMEA), enacted on March 9,
2006.
DATES:
Effective Date: September 20,
2007.
FOR FURTHER INFORMATION CONTACT:
Christine A. Sannerud, Ph.D., Chief,
Drug & Chemical Evaluation Section,
Drug Enforcement Administration,
Washington, DC 20537, Telephone:
(202) 307–7183.
SUPPLEMENTARY INFORMATION:
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Background and Legal Authority
Section 713 of the CMEA (Title VII of
Pub. L 109–177) amended section 306 of
the Controlled Substances Act (CSA) (21
U.S.C. 826) requiring that the Attorney
General establish quotas to provide for
the annual needs for ephedrine,
pseudoephedrine, and
phenylpropanolamine. Further, section
715 of the CMEA amended 21 U.S.C.
952 by adding ephedrine,
pseudoephedrine, and
phenylpropanolamine to the existing
language concerning importation of
controlled substances.
The 2007 assessment of annual needs
represents those quantities of ephedrine,
pseudoephedrine, and
phenylpropanolamine which may be
manufactured domestically and/or
imported into the United States in 2007
to provide adequate supplies of each
chemical for: the estimated medical,
scientific, research and industrial needs
of the United States; lawful export
requirements; and the establishment
and maintenance of reserve stocks.
This responsibility for establishing
the assessment has been delegated to the
Administrator of the DEA by 28 CFR
section 0.100. The Administrator, in
turn, has redelegated this function to the
Deputy Administrator, pursuant to 28
CFR section 0.104.
On October 19, 2006, a notice
entitled, ‘‘Assessment of Annual Needs
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for the List I Chemicals Ephedrine,
Pseudoephedrine, and
Phenylpropanolamine for 2007:
Proposed’’ was published in the Federal
Register (71 FR 61801). This notice
proposed the initial 2007 assessment of
annual needs for ephedrine (for sale),
ephedrine (for conversion),
pseudoephedrine (for sale),
phenylpropanolamine (for sale) and
phenylpropanolamine (for conversion).
All interested persons were invited to
comment on or object to the proposed
assessments on or before December 4,
2006.
Comments Received
DEA received eight comments from
five interested parties during the
comment period. Two comments were
received from two DEA registered
chemical importers; one comment was
received from a DEA registered
chemical manufacturer; two comments
were received from an association
representing over-the-counter (OTC)
manufacturers, distributors and
retailers; and three comments were
received from a law firm representing an
OTC product manufacturer. After the
comment period closed, DEA received
an additional comment from the abovementioned association. All comments
received during the comment period are
summarized here and discussed further
below.
One of the five commenters supported
the DEA’s proposal. This commenter,
one of the DEA registered chemical
importers, stated that DEA’s proposed
assessment of annual needs for
pseudoephedrine and ephedrine was
‘‘reasonable.’’ Additionally, the
commenter requested that the DEA
consider providing ‘‘regulatory relief’’
with regard to the new import
provisions by minimizing the amount of
information that will be required on the
import applications and relying more
heavily on the requirements under the
‘‘spot market’’ provision to ensure that
these substances are imported for
legitimate needs. Since the information
collected as part of the quota provisions
and import applications is not the
subject of this notice, the latter part of
this comment was not considered by
DEA.
Three of the five commenters raised
concerns regarding DEA’s proposal.
Two of these commenters raised
concerns regarding the assessment for
ephedrine while one raised concerns
regarding the assessment for
phenylpropanolamine (for conversion).
These commenters included a DEAregistered manufacturer that imports
phenylpropanolamine, an association
representing OTC manufacturers,
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distributors, and retailers, and a law
firm representing an OTC product
manufacturer.
The fifth commenter requested that
DEA consider its proposed individual
requirement for ephedrine in fixing the
final assessment of annual needs.
DEA did not receive any comments on
its proposed assessment of annual needs
for ephedrine (for conversion) and
phenylpropanolamine (for sale) and is
therefore finalizing these values as
proposed. The assessment of annual
needs for phenylpropanolamine (for
conversion), ephedrine (for sale) and
pseudoephedrine (for sale) are
discussed below within the context of
the comments received.
Comments Regarding DEA’s Proposed
Assessment for Phenylpropanolamine
(for Conversion)
One commenter, a manufacturer that
imports phenylpropanolamine,
considered the proposed
phenylpropanolamine (for conversion)
assessment, i.e., the amount necessary
for the manufacture of other substances,
insufficient to meet its customers’
needs. The commenter stated that
phenylpropanolamine, and its isomers,
are used as chiral agents in numerous
chemical syntheses, a factor that the
commenter believed DEA had not
considered in its original proposal. The
commenter stated that the synthesized
drugs are used in drug products
administered to patients with Acquired
Immune Deficiency Syndrome (AIDS)
and Attention Deficit Disorder (ADD).
This commenter believed that these uses
are probably the largest use of
phenylpropanolamine.
DEA had considered in its proposal
the amount of phenylpropanolamine it
believed was necessary for the
manufacture of ADD medicines, but had
not considered the chemical’s use in the
manufacture of drugs utilized in the
treatment of AIDS. After consideration
of this comment along with additional
information obtained by DEA in
connection with this comment, DEA has
adjusted its assessment for
phenylpropanolamine (for conversion)
from 6,240 kg to 85,470 kg.
Comments Regarding DEA’s Proposed
Assessments for Ephedrine (for Sale)
and Pseudoephedrine (for Sale)
Two commenters, the association
representing OTC manufacturers,
distributors, and retailers, and the law
firm representing an OTC product
manufacturer, indicated their belief that
the proposed ephedrine assessment was
insufficient to meet market demands for
ephedrine-containing OTC products.
The association also questioned the
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sufficiency of the assessment for
pseudoephedrine.
The law firm representing an OTC
product manufacturer submitted three
individual comments during the
comment period. The first comment
requested a 30-day extension of the
comment period. The commenter stated
that they were unable to locate the IMS
Health Government Solutions (IMS)
report on the DEA Diversion Web site.
The commenter was contacted by DEA
and advised as to where the IMS report
was located; upon locating the report,
the commenter withdrew their request
for a 30-day extension. The second
comment was another request for a 30day extension of the comment period
deadline in order to compile and submit
to DEA a report from ‘‘* * * experts in
medicine, economics, and DEA/law
enforcement to assess the impact of the
proposed quota on medical, industrial,
scientific and other legitimate demand
for the two chemical substances.’’ The
commenter submitted the report to DEA
in its third comment. The commenter
recommended ‘‘withdrawal of the
proposed 2007 assessment due to its
inaccuracy and incompleteness.’’ The
commenter requested that DEA issue a
new notice. The comment made the
following conclusions: (1) That the IMS
report was flawed because it excluded
and underestimated ‘‘legitimate demand
for ephedrine sold in over-the-counter
(OTC) drugs for respiratory ailments via
convenience stores’’; (2) ‘‘The
underestimation of legitimate medical
need will lead to ephedrine quota levels
beneath those necessary to ensure
adequate supplies of ephedrine to treat
respiratory ailments’’; (3) ‘‘The
exclusion of convenience stores from
the IMS calculus and any resulting
deprivation of supply to satisfy
legitimate demand in those stores will
imperil the health and safety of
Americans with respiratory ailments,
resulting in increased hospitalization
and possibly deaths due to a lack of
ready access in moments of critical
need’’; (4) ‘‘* * * the prejudicial
exclusion of convenience store demand
from the 2007 Annual Needs estimate
not only reduces supply beneath safe
levels but also creates an anticompetitive market bias in favor of
pharmacies over convenience stores to
the economic and physical detriment of
all with legitimate medical needs.’’ The
commenter also stated that IMS did not
conduct any ‘‘sensitivity tests,
assessments of bias, or estimates of
precision related to use of surveys that
are critical to estimates of certain
segments of the legitimate medical use
market, such as convenience stores.’’
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DEA notes that IMS completed a
sensitivity analysis upon review of the
comments submitted by this
commenter. The results of this analysis
and DEA’s consideration of the results
of that analysis are discussed below.
IMS’ final report is available on the
Office of Diversion Control’s Web site
(https://www.deadiversion.usdoj.gov).
The association representing OTC
manufacturers, distributors, and
retailers provided two comments to the
docket during the comment period. The
commenter stated that the IMS report
did not ‘‘properly document data from
the convenience store segment.’’ The
commenter noted its concern that DEA
has ‘‘narrowly defined ‘medical need’ ’’
for preparations containing these List I
chemicals, specifically ephedrine. The
commenter stated that it had
commissioned ‘‘a study by an outside
economic consulting firm to provide the
DEA with substantive information that
would help DEA produce a more
accurate and substantive estimate of
ephedrine needs assessment for 2007.’’
The comment included a request for an
extension of time which was not
granted. The study was submitted to
both DEA and IMS after the comment
period had closed.
In connection with the concerns
raised by these two commenters that the
preliminary IMS study did not
adequately address sales of ephedrinebased OTC drug products through the
convenience store channel of
distribution, DEA notes that its contract
with IMS had two distinct phases. Phase
I, which was completed prior to
publication of the proposed assessment
of annual needs, involved a preliminary
assessment of the medical use of
ephedrine and pseudoephedrine and a
written summary of the methodology it
used to develop the estimates. This
information was made available for
review by the public when the DEA
published the ‘‘Assessment of Annual
Needs for the List I Chemicals
Ephedrine, Pseudoephedrine, and
Phenylpropanolamine for 2007:
Proposed’’ (71 FR 61801). The second
phase of DEA’s contract involved IMS’
development of a final estimate which
was developed by IMS after
consideration of all available
information, including: comments
received from the public during the
comment period, the study submitted
directly to IMS by the association
representing OTC manufacturers,
distributors and retailers, updated
information from the data sources used
by IMS to compile the initial estimates,
and other available information on the
sales of OTC drug products through
various distribution channels. The final
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report is discussed below and is
available on DEA’s Office of Diversion
Control Web site, https://
www.deadiversion.usdoj.gov.
Report Prepared by IMS Health
As discussed in its October 19, 2006,
proposed Assessment of Annual Needs,
since the manufacture and importation
of ephedrine, pseudoephedrine, and
phenylpropanolamine were not
previously regulated through the
establishment of an assessment of
annual needs, DEA obtained assistance
from a private independent contractor,
IMS, to develop the initial estimate of
the medical needs of the United States
of ephedrine and pseudoephedrine.
IMS’ estimates of medical needs for
ephedrine and pseudoephedrine were
derived from data the company
routinely collects and offers to
customers to understand the
pharmaceutical market. For this
analysis, IMS utilized the following
types of data: (1) Sales to retail
establishments (including pharmacies),
(2) sales by retail establishments to
patients, and (3) medical insurance
claims. IMS’ estimates of medical needs
were intended to encompass only those
products containing either ephedrine or
pseudoephedrine, whether requiring a
prescription or available over-thecounter. The estimates of use
encompassed those products containing
ephedrine and pseudoephedrine which
are lawfully marketed under the Federal
Food, Drug and Cosmetic Act. As noted
previously, IMS did not examine
estimates for phenylpropanolamine.
The CSA requires that DEA establish
quotas for ephedrine, pseudoephedrine,
and phenylpropanolamine to meet the
estimated medical, scientific, research,
and industrial needs of the United
States, lawful export requirements, and
maintenance of reserve stocks.
Accordingly, DEA requested that IMS
determine the amount of ephedrine and
pseudoephedrine necessary to meet the
estimated medical needs of the United
States. DEA and IMS agreed that looking
at sales of prescription and OTC drug
products containing these list I
chemicals through all distribution
channels alone would not be an
appropriate proxy from which to derive
an estimate of what IMS describes in its
report as the ‘‘legitimate medical use’’
because this approach would have the
unwanted effect of including amounts of
ephedrine and pseudoephedrine
purchased for use in the clandestine
manufacture of methamphetamine.
Therefore, IMS concluded that the
best proxy for evaluating the estimated
medical use for these chemicals, i.e., the
alternate method that seeks to exclude
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sales of ephedrine and
pseudoephedrine-based products
destined for clandestine
methamphetamine production in the
United States, would involve evaluating
the changes (increases or decreases) in
sales of prescription and OTC products
containing these List I chemicals which
have resulted from various state
initiatives aimed at imposing
restrictions on the retail sales of OTC
drug products containing these
chemicals. These state-sponsored
initiatives began as early as 2004. The
requirements vary from state to state,
but examples include: (1) Placing OTC
products behind pharmacy counters, (2)
restricting the quantity of OTC drug
products that could be purchased by
individuals, and (3) providing proof of
identification at the time of purchase.
Based on this analysis, IMS concluded
that the median changes in OTC sales of
ephedrine products were: 23.7 percent
increase through retail channels (mass
merchandisers, grocery stores, etc.) and
a 45.2 percent decrease in ‘‘other’’
distribution channels (including gas
station and convenience stores). For
comparison, sales of OTC products
containing pseudoephedrine decreased
by 22 percent through retail distribution
channels and also decreased by 10.8
percent through other distribution
channels. Accordingly, these changes,
along with the changes observed in the
usage of prescription drug products
containing ephedrine and
pseudoephedrine, were applied across
all data systems used in the IMS
analysis.
Based on the comments analyzed by
IMS, IMS completed a sensitivity
analysis of their final estimates. IMS
concluded that the estimated medical
use for pseudoephedrine was ‘‘very
stable * * * differing from the simple
average of the component final
estimates by at most 7.7%.’’ By contrast,
however, the estimated medical use for
ephedrine was ‘‘relatively unstable, as
the sensitivity estimates differ from the
final estimate by as much as 46.5%.’’
IMS’ Medical Need Estimate for
Pseudoephedrine and the DEA’s Final
2007 Assessment of Annual Needs for
Pseudoephedrine (for Sale)
In its final report, IMS concluded that
the estimated medical need for
pseudoephedrine decreased in all three
models analyzed. The initial IMS report
estimated that the medical need in the
United States for pseudoephedrine was
350,700 kg and in the final report the
medical need estimate was 280,268 kg.
The results of the sensitivity analysis
suggest that the pseudoephedrine
medical need assessment was very
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stable from the simple average of the
three component final estimates and, at
most, differed by 7.7 percent. The
decrease observed in IMS final estimate
as compared with the preliminary
estimate was due to a necessary
adjustment resulting from IMS initially
expressing its estimate (350,700 kg) in
terms of the compound weight, e.g.,
pseudoephedrine hydrochloride, rather
than expressing its estimate in terms of
the weight of the molecule
pseudoephedrine alone. Overall, this
resulted in a correction down in the IMS
estimate by approximately 20 percent.
Although IMS’ final estimate is lower,
DEA has concluded that the amount
proposed would allow for sufficient
inventory allowances to DEA registered
manufacturers and importers of
pseudoephedrine products and could
account for any unexpected change
(increase) in the use of pseudoephedrine
that may result from changes in the
acceptability of phenylephrine as a
substitute for pseudoephedrine in many
OTC cough and cold products currently
on the market.
IMS’ Medical Need Estimate for
Ephedrine and the DEA’s Final 2007
Assessment of Annual Needs for
Ephedrine (for Sale)
As with the pseudoephedrine
estimate, IMS based its preliminary
ephedrine medical need estimate on the
weights of the salt forms of ephedrine;
this resulted in a necessary adjustment
down by 20 percent for its final medical
need estimate. Unlike the
pseudoephedrine estimate which
decreased in the final report, IMS’
analysis of the data available resulted in
an increase from 3,800 kg to 4,096 kg.
Furthermore, the results of its
sensitivity analysis concluded that the
4,096 kg medical need estimate was
‘‘unstable’’ as compared to the estimate
for pseudoephedrine and that the
sensitivity estimates differed from the
final estimate by as much as 46.5
percent (range was 4,096 kg to 5,998 kg).
The two factors principally responsible
for the 46.5 percent range were: (1) The
incorporation of estimated amounts of
OTC products sold in convenience
stores, which IMS concluded to be 7.7
percent, and (2) the incorporation of
‘‘non-matched products,’’ i.e., those
products not originally confirmed to
contain ephedrine or pseudoephedrine,
into IMS’ estimate.
Based on this analysis, DEA
concludes that the proposed assessment
of annual needs for ephedrine (for sale)
was inadequate to meet the estimated
medical, scientific, research, and
industrial needs of the United States,
lawful export requirements, and
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maintenance of reserve stocks. After
considering IMS’ final estimate of the
medical need of ephedrine-based
prescription and OTC products (5,998
kg), along with information DEA
collects from DEA registered chemical
exporters (through the DEA–486 Import/
Export Declaration for Listed
Chemicals), and amounts necessary to
maintain reserve stocks, DEA has
increased the ephedrine (for sale)
assessment from 7,100 kg to 11,500 kg.
Conclusion
Therefore, under the authority vested
in the Attorney General by section 306
of the CSA (21 U.S.C. 826), and
delegated to the Administrator of the
DEA by 28 CFR section 0.100, and
redelegated to the Deputy Administrator
pursuant to 28 CFR section 0.104, the
Deputy Administrator hereby orders
that the 2007 assessment of annual
needs for ephedrine, pseudoephedrine,
and phenylpropanolamine, expressed in
kilograms of anhydrous acid or base, be
established as follows:
List I chemicals
Ephedrine (for sale) ........
Ephedrine (for conversion) ............................
Pseudoephedrine (for
sale) ............................
Phenylpropanolamine (for
sale) ............................
Phenylpropanolamine (for
conversion) ..................
Final year 2007
assessment of
annual needs
(kg)
11,500
128,760
511,100
5,545
85,470
The Office of Management and Budget
has determined that notices of quotas
are not subject to centralized review
under Executive Order 12866.
This action does not preempt or
modify any provision of state law; nor
does it impose enforcement
responsibilities on any state; nor does it
diminish the power of any state to
enforce its own laws. Accordingly, this
action does not have any federalism
implications warranting the application
of Executive Order 13132.
The Deputy Administrator hereby
certifies that this action will have no
significant impact upon small entities
whose interests must be considered
under the Regulatory Flexibility Act, 5
U.S.C. 601–612. The establishment of
assessments of annual needs for
ephedrine, pseudoephedrine, and
phenylpropanolamine is mandated by
law. The assessments are necessary to
provide for the estimated medical,
scientific, research and industrial needs
of the United States, for export
requirements, and the establishment
and maintenance of reserve stocks.
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Accordingly, the Deputy Administrator
has determined that this action does not
require a regulatory flexibility analysis.
This action meets the applicable
standards set forth in sections 3(a) and
3(b)(2) of Executive Order 12988 Civil
Justice Reform.
This action will not result in the
expenditure by State, local, and tribal
governments, in the aggregate, or by the
private sector, of $120,000,000 or more
(adjusted for inflation) in any one year,
and will not significantly or uniquely
affect small governments. Therefore, no
actions were deemed necessary under
the provisions of the Unfunded
Mandates Reform Act of 1995.
This action is not a major rule as
defined by section 804 of the Small
Business Regulatory Enforcement
Fairness Act of 1996 (Congressional
Review Act). This action 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 foreignbased companies in domestic and
export markets.
Dated: September 13, 2007.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E7–18523 Filed 9–19–07; 8:45 am]
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Assessment of Annual Needs for the
List I Chemicals Ephedrine,
Pseudoephedrine, and
Phenylpropanolamine for 2008:
Proposed
Drug Enforcement
Administration (DEA), Justice.
ACTION: Notice of proposed annual
assessment of needs for 2008.
AGENCY:
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To ensure proper handling
of comments, please reference ‘‘Docket
No. DEA–306’’ on all written and
electronic correspondence. Written
comments being sent via regular mail
should be sent to the Deputy Assistant
Administrator, Office of Diversion
Control, Drug Enforcement
Administration, Washington, DC 20537,
Attention: DEA Federal Register
Representative/ODL. Written comments
sent via express mail should be sent to
DEA Headquarters, Attention: DEA
Federal Register Representative/ODL,
2401 Jefferson-Davis Highway,
Alexandria, VA 22301. Comments may
be directly sent to DEA electronically by
sending an electronic message to
dea.diversion.policy@usdoj.gov. DEA
will accept attachments to electronic
comments in Microsoft Word,
WordPerfect, Adobe PDF, or Excel file
formats only. DEA will not accept any
file format other than those specifically
listed here.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Section
713 of the Combat Methamphetamine
Epidemic Act of 2005 (Title VII of Pub.
L. 109–177) (CMEA) amended section
306 of the Controlled Substances Act
(CSA) (21 U.S.C. section 826) by adding
ephedrine, pseudoephedrine, and
phenylpropanolamine to existing
language to read as follows: ‘‘The
Attorney General shall determine the
total quantity and establish production
quotas for each basic class of controlled
substance in schedules I and II and for
ephedrine, pseudoephedrine, and
phenylpropanolamine to be
manufactured each calendar year to
provide for the estimated medical,
scientific, research, and industrial needs
of the United States, for lawful export
requirements, and for the establishment
and maintenance of reserve stocks.’’
Further, section 715 of CMEA amended
21 U.S.C. 952 ‘‘Importation of controlled
substances’’ by adding the same List I
chemicals to the existing language in
paragraph (a), and by adding a new
paragraph (d) to read as follows:
SUPPLEMENTARY INFORMATION:
[Docket No. DEA–306P]
SUMMARY: This notice proposes the
initial year 2008 assessment of annual
needs for certain List I chemicals in
accordance with the Combat
Methamphetamine Epidemic Act of
2005 (CMEA), enacted on March 9,
2006. The Act required DEA to establish
production quotas and import quotas for
ephedrine, pseudoephedrine, and
phenylpropanolamine. This was done to
prevent the illicit use of these three
chemicals in the clandestine
manufacture of methamphetamine. The
enactment of the CMEA places
18:30 Sep 19, 2007
Written comments or objections
must be postmarked, and electronic
comments must be sent, on or before
October 11, 2007.
DATES:
Christine A. Sannerud, PhD, Chief, Drug
and Chemical Evaluation Section, Drug
Enforcement Administration,
Washington, DC 20537, Telephone:
(202) 307–7183.
BILLING CODE 4410–09–P
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additional regulatory controls upon the
manufacture, distribution, importation,
and exportation of the three List I
chemicals.
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(a) Controlled substances in schedule I or
II and narcotic drugs in schedule III, IV, or
V; exceptions
It shall be unlawful to import into the
customs territory of the United States from
any place outside thereof (but within the
United States), or to import into the United
States from any place outside thereof, any
controlled substance in schedule I or II of
subchapter I of this chapter, or any narcotic
drug in schedule III, IV, or V of subchapter
I of this chapter, or ephedrine,
pseudoephedrine, and
phenylpropanolamine, except that—
(1) Such amounts of crude opium, poppy
straw, concentrate of poppy straw, and coca
leaves, and of ephedrine, pseudoephedrine,
and phenylpropanolamine, as the Attorney
General finds to be necessary to provide for
medical, scientific, or other legitimate
purposes, and
*
*
*
*
*
(d)(1) With respect to a registrant under
Section 958 who is authorized under
Subsection (a)(1) to import ephedrine,
pseudoephedrine, or phenylpropanolamine,
at any time during the year the registrant may
apply for an increase in the amount of such
chemical that the registrant is authorized to
import, and the Attorney General may
approve the application if the Attorney
General determines that the approval is
necessary to provide for medical, scientific,
or other legitimate purposes regarding the
chemical.
Editor’s Note: This excerpt of the
amendment is published for the convenience
of the reader. The official text is published
at 21 U.S.C. 952(a) and (d)(1).
The responsibility for establishing the
assessment of annual needs has been
delegated to the Administrator of the
DEA by 28 CFR section 0.100. The
Administrator, in turn, has redelegated
this function to the Deputy
Administrator, pursuant to 28 CFR
section 0.104.
The proposed year 2008 assessment of
annual needs represents those quantities
of ephedrine, pseudoephedrine, and
phenylpropanolamine which may be
manufactured domestically and/or
imported into the United States to
provide adequate supplies of each
chemical for: The estimated medical,
scientific, research, and industrial needs
of the United States; lawful export
requirements; and the establishment
and maintenance of reserve stocks.
Pursuant to 21 CFR part 1315, the
Deputy Administrator of the DEA will,
in early 2008, adjust the assessment of
annual needs and individual importing
and manufacturing quotas allocated for
the year based upon 2007 year-end
inventory and actual 2007 disposition
data supplied by quota recipients for
ephedrine, pseudoephedrine, and
phenylpropanolamine.
The Deputy Administrator hereby
proposes that the year 2008 assessment
E:\FR\FM\20SEN3.SGM
20SEN3
]]>Agencies
[Federal Register Volume 72, Number 182 (Thursday, September 20, 2007)]
[Notices]
[Pages 53908-53911]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-18523]
[[Page 53907]]
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Part VII
Department of Justice
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Drug Enforcement Administration
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Established Assessment of Annual Needs for the List I Chemicals
Ephedrine, Pseudoephedrine, and Phenylpropanolamine for 2007 and 2008;
Notices
Federal Register / Vol. 72, No. 182 / Thursday, September 20, 2007 /
Notices
[[Page 53908]]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. DEA-300F]
Established Assessment of Annual Needs for the List I Chemicals
Ephedrine, Pseudoephedrine, and Phenylpropanolamine for 2007
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Notice of assessment of annual needs for 2007.
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SUMMARY: This notice establishes the initial year 2007 assessment of
annual needs for certain List I chemicals in accordance with the Combat
Methamphetamine Epidemic Act of 2005 (CMEA), enacted on March 9, 2006.
DATES: Effective Date: September 20, 2007.
FOR FURTHER INFORMATION CONTACT: Christine A. Sannerud, Ph.D., Chief,
Drug & Chemical Evaluation Section, Drug Enforcement Administration,
Washington, DC 20537, Telephone: (202) 307-7183.
SUPPLEMENTARY INFORMATION:
Background and Legal Authority
Section 713 of the CMEA (Title VII of Pub. L 109-177) amended
section 306 of the Controlled Substances Act (CSA) (21 U.S.C. 826)
requiring that the Attorney General establish quotas to provide for the
annual needs for ephedrine, pseudoephedrine, and phenylpropanolamine.
Further, section 715 of the CMEA amended 21 U.S.C. 952 by adding
ephedrine, pseudoephedrine, and phenylpropanolamine to the existing
language concerning importation of controlled substances.
The 2007 assessment of annual needs represents those quantities of
ephedrine, pseudoephedrine, and phenylpropanolamine which may be
manufactured domestically and/or imported into the United States in
2007 to provide adequate supplies of each chemical for: the estimated
medical, scientific, research and industrial needs of the United
States; lawful export requirements; and the establishment and
maintenance of reserve stocks.
This responsibility for establishing the assessment has been
delegated to the Administrator of the DEA by 28 CFR section 0.100. The
Administrator, in turn, has redelegated this function to the Deputy
Administrator, pursuant to 28 CFR section 0.104.
On October 19, 2006, a notice entitled, ``Assessment of Annual
Needs for the List I Chemicals Ephedrine, Pseudoephedrine, and
Phenylpropanolamine for 2007: Proposed'' was published in the Federal
Register (71 FR 61801). This notice proposed the initial 2007
assessment of annual needs for ephedrine (for sale), ephedrine (for
conversion), pseudoephedrine (for sale), phenylpropanolamine (for sale)
and phenylpropanolamine (for conversion). All interested persons were
invited to comment on or object to the proposed assessments on or
before December 4, 2006.
Comments Received
DEA received eight comments from five interested parties during the
comment period. Two comments were received from two DEA registered
chemical importers; one comment was received from a DEA registered
chemical manufacturer; two comments were received from an association
representing over-the-counter (OTC) manufacturers, distributors and
retailers; and three comments were received from a law firm
representing an OTC product manufacturer. After the comment period
closed, DEA received an additional comment from the above-mentioned
association. All comments received during the comment period are
summarized here and discussed further below.
One of the five commenters supported the DEA's proposal. This
commenter, one of the DEA registered chemical importers, stated that
DEA's proposed assessment of annual needs for pseudoephedrine and
ephedrine was ``reasonable.'' Additionally, the commenter requested
that the DEA consider providing ``regulatory relief'' with regard to
the new import provisions by minimizing the amount of information that
will be required on the import applications and relying more heavily on
the requirements under the ``spot market'' provision to ensure that
these substances are imported for legitimate needs. Since the
information collected as part of the quota provisions and import
applications is not the subject of this notice, the latter part of this
comment was not considered by DEA.
Three of the five commenters raised concerns regarding DEA's
proposal. Two of these commenters raised concerns regarding the
assessment for ephedrine while one raised concerns regarding the
assessment for phenylpropanolamine (for conversion). These commenters
included a DEA-registered manufacturer that imports
phenylpropanolamine, an association representing OTC manufacturers,
distributors, and retailers, and a law firm representing an OTC product
manufacturer.
The fifth commenter requested that DEA consider its proposed
individual requirement for ephedrine in fixing the final assessment of
annual needs.
DEA did not receive any comments on its proposed assessment of
annual needs for ephedrine (for conversion) and phenylpropanolamine
(for sale) and is therefore finalizing these values as proposed. The
assessment of annual needs for phenylpropanolamine (for conversion),
ephedrine (for sale) and pseudoephedrine (for sale) are discussed below
within the context of the comments received.
Comments Regarding DEA's Proposed Assessment for Phenylpropanolamine
(for Conversion)
One commenter, a manufacturer that imports phenylpropanolamine,
considered the proposed phenylpropanolamine (for conversion)
assessment, i.e., the amount necessary for the manufacture of other
substances, insufficient to meet its customers' needs. The commenter
stated that phenylpropanolamine, and its isomers, are used as chiral
agents in numerous chemical syntheses, a factor that the commenter
believed DEA had not considered in its original proposal. The commenter
stated that the synthesized drugs are used in drug products
administered to patients with Acquired Immune Deficiency Syndrome
(AIDS) and Attention Deficit Disorder (ADD). This commenter believed
that these uses are probably the largest use of phenylpropanolamine.
DEA had considered in its proposal the amount of
phenylpropanolamine it believed was necessary for the manufacture of
ADD medicines, but had not considered the chemical's use in the
manufacture of drugs utilized in the treatment of AIDS. After
consideration of this comment along with additional information
obtained by DEA in connection with this comment, DEA has adjusted its
assessment for phenylpropanolamine (for conversion) from 6,240 kg to
85,470 kg.
Comments Regarding DEA's Proposed Assessments for Ephedrine (for Sale)
and Pseudoephedrine (for Sale)
Two commenters, the association representing OTC manufacturers,
distributors, and retailers, and the law firm representing an OTC
product manufacturer, indicated their belief that the proposed
ephedrine assessment was insufficient to meet market demands for
ephedrine-containing OTC products. The association also questioned the
[[Page 53909]]
sufficiency of the assessment for pseudoephedrine.
The law firm representing an OTC product manufacturer submitted
three individual comments during the comment period. The first comment
requested a 30-day extension of the comment period. The commenter
stated that they were unable to locate the IMS Health Government
Solutions (IMS) report on the DEA Diversion Web site. The commenter was
contacted by DEA and advised as to where the IMS report was located;
upon locating the report, the commenter withdrew their request for a
30-day extension. The second comment was another request for a 30-day
extension of the comment period deadline in order to compile and submit
to DEA a report from ``* * * experts in medicine, economics, and DEA/
law enforcement to assess the impact of the proposed quota on medical,
industrial, scientific and other legitimate demand for the two chemical
substances.'' The commenter submitted the report to DEA in its third
comment. The commenter recommended ``withdrawal of the proposed 2007
assessment due to its inaccuracy and incompleteness.'' The commenter
requested that DEA issue a new notice. The comment made the following
conclusions: (1) That the IMS report was flawed because it excluded and
underestimated ``legitimate demand for ephedrine sold in over-the-
counter (OTC) drugs for respiratory ailments via convenience stores'';
(2) ``The underestimation of legitimate medical need will lead to
ephedrine quota levels beneath those necessary to ensure adequate
supplies of ephedrine to treat respiratory ailments''; (3) ``The
exclusion of convenience stores from the IMS calculus and any resulting
deprivation of supply to satisfy legitimate demand in those stores will
imperil the health and safety of Americans with respiratory ailments,
resulting in increased hospitalization and possibly deaths due to a
lack of ready access in moments of critical need''; (4) ``* * * the
prejudicial exclusion of convenience store demand from the 2007 Annual
Needs estimate not only reduces supply beneath safe levels but also
creates an anti-competitive market bias in favor of pharmacies over
convenience stores to the economic and physical detriment of all with
legitimate medical needs.'' The commenter also stated that IMS did not
conduct any ``sensitivity tests, assessments of bias, or estimates of
precision related to use of surveys that are critical to estimates of
certain segments of the legitimate medical use market, such as
convenience stores.''
DEA notes that IMS completed a sensitivity analysis upon review of
the comments submitted by this commenter. The results of this analysis
and DEA's consideration of the results of that analysis are discussed
below. IMS' final report is available on the Office of Diversion
Control's Web site (https://www.deadiversion.usdoj.gov).
The association representing OTC manufacturers, distributors, and
retailers provided two comments to the docket during the comment
period. The commenter stated that the IMS report did not ``properly
document data from the convenience store segment.'' The commenter noted
its concern that DEA has ``narrowly defined `medical need' '' for
preparations containing these List I chemicals, specifically ephedrine.
The commenter stated that it had commissioned ``a study by an outside
economic consulting firm to provide the DEA with substantive
information that would help DEA produce a more accurate and substantive
estimate of ephedrine needs assessment for 2007.'' The comment included
a request for an extension of time which was not granted. The study was
submitted to both DEA and IMS after the comment period had closed.
In connection with the concerns raised by these two commenters that
the preliminary IMS study did not adequately address sales of
ephedrine-based OTC drug products through the convenience store channel
of distribution, DEA notes that its contract with IMS had two distinct
phases. Phase I, which was completed prior to publication of the
proposed assessment of annual needs, involved a preliminary assessment
of the medical use of ephedrine and pseudoephedrine and a written
summary of the methodology it used to develop the estimates. This
information was made available for review by the public when the DEA
published the ``Assessment of Annual Needs for the List I Chemicals
Ephedrine, Pseudoephedrine, and Phenylpropanolamine for 2007:
Proposed'' (71 FR 61801). The second phase of DEA's contract involved
IMS' development of a final estimate which was developed by IMS after
consideration of all available information, including: comments
received from the public during the comment period, the study submitted
directly to IMS by the association representing OTC manufacturers,
distributors and retailers, updated information from the data sources
used by IMS to compile the initial estimates, and other available
information on the sales of OTC drug products through various
distribution channels. The final report is discussed below and is
available on DEA's Office of Diversion Control Web site, https://
www.deadiversion.usdoj.gov.
Report Prepared by IMS Health
As discussed in its October 19, 2006, proposed Assessment of Annual
Needs, since the manufacture and importation of ephedrine,
pseudoephedrine, and phenylpropanolamine were not previously regulated
through the establishment of an assessment of annual needs, DEA
obtained assistance from a private independent contractor, IMS, to
develop the initial estimate of the medical needs of the United States
of ephedrine and pseudoephedrine.
IMS' estimates of medical needs for ephedrine and pseudoephedrine
were derived from data the company routinely collects and offers to
customers to understand the pharmaceutical market. For this analysis,
IMS utilized the following types of data: (1) Sales to retail
establishments (including pharmacies), (2) sales by retail
establishments to patients, and (3) medical insurance claims. IMS'
estimates of medical needs were intended to encompass only those
products containing either ephedrine or pseudoephedrine, whether
requiring a prescription or available over-the-counter. The estimates
of use encompassed those products containing ephedrine and
pseudoephedrine which are lawfully marketed under the Federal Food,
Drug and Cosmetic Act. As noted previously, IMS did not examine
estimates for phenylpropanolamine.
The CSA requires that DEA establish quotas for ephedrine,
pseudoephedrine, and phenylpropanolamine to meet the estimated medical,
scientific, research, and industrial needs of the United States, lawful
export requirements, and maintenance of reserve stocks. Accordingly,
DEA requested that IMS determine the amount of ephedrine and
pseudoephedrine necessary to meet the estimated medical needs of the
United States. DEA and IMS agreed that looking at sales of prescription
and OTC drug products containing these list I chemicals through all
distribution channels alone would not be an appropriate proxy from
which to derive an estimate of what IMS describes in its report as the
``legitimate medical use'' because this approach would have the
unwanted effect of including amounts of ephedrine and pseudoephedrine
purchased for use in the clandestine manufacture of methamphetamine.
Therefore, IMS concluded that the best proxy for evaluating the
estimated medical use for these chemicals, i.e., the alternate method
that seeks to exclude
[[Page 53910]]
sales of ephedrine and pseudoephedrine-based products destined for
clandestine methamphetamine production in the United States, would
involve evaluating the changes (increases or decreases) in sales of
prescription and OTC products containing these List I chemicals which
have resulted from various state initiatives aimed at imposing
restrictions on the retail sales of OTC drug products containing these
chemicals. These state-sponsored initiatives began as early as 2004.
The requirements vary from state to state, but examples include: (1)
Placing OTC products behind pharmacy counters, (2) restricting the
quantity of OTC drug products that could be purchased by individuals,
and (3) providing proof of identification at the time of purchase.
Based on this analysis, IMS concluded that the median changes in OTC
sales of ephedrine products were: 23.7 percent increase through retail
channels (mass merchandisers, grocery stores, etc.) and a 45.2 percent
decrease in ``other'' distribution channels (including gas station and
convenience stores). For comparison, sales of OTC products containing
pseudoephedrine decreased by 22 percent through retail distribution
channels and also decreased by 10.8 percent through other distribution
channels. Accordingly, these changes, along with the changes observed
in the usage of prescription drug products containing ephedrine and
pseudoephedrine, were applied across all data systems used in the IMS
analysis.
Based on the comments analyzed by IMS, IMS completed a sensitivity
analysis of their final estimates. IMS concluded that the estimated
medical use for pseudoephedrine was ``very stable * * * differing from
the simple average of the component final estimates by at most 7.7%.''
By contrast, however, the estimated medical use for ephedrine was
``relatively unstable, as the sensitivity estimates differ from the
final estimate by as much as 46.5%.''
IMS' Medical Need Estimate for Pseudoephedrine and the DEA's Final 2007
Assessment of Annual Needs for Pseudoephedrine (for Sale)
In its final report, IMS concluded that the estimated medical need
for pseudoephedrine decreased in all three models analyzed. The initial
IMS report estimated that the medical need in the United States for
pseudoephedrine was 350,700 kg and in the final report the medical need
estimate was 280,268 kg. The results of the sensitivity analysis
suggest that the pseudoephedrine medical need assessment was very
stable from the simple average of the three component final estimates
and, at most, differed by 7.7 percent. The decrease observed in IMS
final estimate as compared with the preliminary estimate was due to a
necessary adjustment resulting from IMS initially expressing its
estimate (350,700 kg) in terms of the compound weight, e.g.,
pseudoephedrine hydrochloride, rather than expressing its estimate in
terms of the weight of the molecule pseudoephedrine alone. Overall,
this resulted in a correction down in the IMS estimate by approximately
20 percent.
Although IMS' final estimate is lower, DEA has concluded that the
amount proposed would allow for sufficient inventory allowances to DEA
registered manufacturers and importers of pseudoephedrine products and
could account for any unexpected change (increase) in the use of
pseudoephedrine that may result from changes in the acceptability of
phenylephrine as a substitute for pseudoephedrine in many OTC cough and
cold products currently on the market.
IMS' Medical Need Estimate for Ephedrine and the DEA's Final 2007
Assessment of Annual Needs for Ephedrine (for Sale)
As with the pseudoephedrine estimate, IMS based its preliminary
ephedrine medical need estimate on the weights of the salt forms of
ephedrine; this resulted in a necessary adjustment down by 20 percent
for its final medical need estimate. Unlike the pseudoephedrine
estimate which decreased in the final report, IMS' analysis of the data
available resulted in an increase from 3,800 kg to 4,096 kg.
Furthermore, the results of its sensitivity analysis concluded that the
4,096 kg medical need estimate was ``unstable'' as compared to the
estimate for pseudoephedrine and that the sensitivity estimates
differed from the final estimate by as much as 46.5 percent (range was
4,096 kg to 5,998 kg). The two factors principally responsible for the
46.5 percent range were: (1) The incorporation of estimated amounts of
OTC products sold in convenience stores, which IMS concluded to be 7.7
percent, and (2) the incorporation of ``non-matched products,'' i.e.,
those products not originally confirmed to contain ephedrine or
pseudoephedrine, into IMS' estimate.
Based on this analysis, DEA concludes that the proposed assessment
of annual needs for ephedrine (for sale) was inadequate to meet the
estimated medical, scientific, research, and industrial needs of the
United States, lawful export requirements, and maintenance of reserve
stocks. After considering IMS' final estimate of the medical need of
ephedrine-based prescription and OTC products (5,998 kg), along with
information DEA collects from DEA registered chemical exporters
(through the DEA-486 Import/Export Declaration for Listed Chemicals),
and amounts necessary to maintain reserve stocks, DEA has increased the
ephedrine (for sale) assessment from 7,100 kg to 11,500 kg.
Conclusion
Therefore, under the authority vested in the Attorney General by
section 306 of the CSA (21 U.S.C. 826), and delegated to the
Administrator of the DEA by 28 CFR section 0.100, and redelegated to
the Deputy Administrator pursuant to 28 CFR section 0.104, the Deputy
Administrator hereby orders that the 2007 assessment of annual needs
for ephedrine, pseudoephedrine, and phenylpropanolamine, expressed in
kilograms of anhydrous acid or base, be established as follows:
------------------------------------------------------------------------
Final year 2007
assessment of
List I chemicals annual needs
(kg)
------------------------------------------------------------------------
Ephedrine (for sale)................................. 11,500
Ephedrine (for conversion)........................... 128,760
Pseudoephedrine (for sale)........................... 511,100
Phenylpropanolamine (for sale)....................... 5,545
Phenylpropanolamine (for conversion)................. 85,470
------------------------------------------------------------------------
The Office of Management and Budget has determined that notices of
quotas are not subject to centralized review under Executive Order
12866.
This action does not preempt or modify any provision of state law;
nor does it impose enforcement responsibilities on any state; nor does
it diminish the power of any state to enforce its own laws.
Accordingly, this action does not have any federalism implications
warranting the application of Executive Order 13132.
The Deputy Administrator hereby certifies that this action will
have no significant impact upon small entities whose interests must be
considered under the Regulatory Flexibility Act, 5 U.S.C. 601-612. The
establishment of assessments of annual needs for ephedrine,
pseudoephedrine, and phenylpropanolamine is mandated by law. The
assessments are necessary to provide for the estimated medical,
scientific, research and industrial needs of the United States, for
export requirements, and the establishment and maintenance of reserve
stocks.
[[Page 53911]]
Accordingly, the Deputy Administrator has determined that this action
does not require a regulatory flexibility analysis.
This action meets the applicable standards set forth in sections
3(a) and 3(b)(2) of Executive Order 12988 Civil Justice Reform.
This action will not result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of
$120,000,000 or more (adjusted for inflation) in any one year, and will
not significantly or uniquely affect small governments. Therefore, no
actions were deemed necessary under the provisions of the Unfunded
Mandates Reform Act of 1995.
This action is not a major rule as defined by section 804 of the
Small Business Regulatory Enforcement Fairness Act of 1996
(Congressional Review Act). This action 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.
Dated: September 13, 2007.
Michele M. Leonhart,
Deputy Administrator. >
[FR Doc. E7-18523 Filed 9-19-07; 8:45 am]
BILLING CODE 4410-09-P
