Removal of Thresholds for the List I Chemicals Pseudoephedrine and Phenylpropanolamine, 38915-38922 [2010-16388]
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38915
Rules and Regulations
Federal Register
Vol. 75, No. 129
Wednesday, July 7, 2010
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Part 1310
[Docket No. DEA–296F]
RIN 1117–AB10
Removal of Thresholds for the List I
Chemicals Pseudoephedrine and
Phenylpropanolamine
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AGENCY: Drug Enforcement
Administration, Department of Justice.
ACTION: Final rule.
SUMMARY: The Drug Enforcement
Administration (DEA) is removing the
thresholds for importation, exportation,
and domestic distributions of the List I
chemicals pseudoephedrine and
phenylpropanolamine. This rulemaking
is being conducted as part of DEA’s
implementation of the Combat
Methamphetamine Epidemic Act of
2005 and is needed to implement the
Act’s requirements for import and
production quotas and to address the
potential diversion of these chemicals.
DEA is also clarifying that all
transactions of drug products containing
ephedrine, pseudoephedrine, and
phenylpropanolamine, except retail
transactions, are considered to be
regulated transactions.
DATES: Effective Date: This rule is
effective August 6, 2010.
FOR FURTHER INFORMATION CONTACT:
Mark W. Caverly, Chief, Liaison and
Policy Section, Office of Diversion
Control, Drug Enforcement
Administration, 8701 Morrissette Drive,
Springfield, VA 22152, (202) 307–7297.
SUPPLEMENTARY INFORMATION:
DEA’s Legal Authority
DEA implements the Comprehensive
Drug Abuse Prevention and Control Act
of 1970, often referred to as the
Controlled Substances Act (CSA) and
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the Controlled Substances Import and
Export Act (CSIEA) (21 U.S.C. 801–971),
as amended. DEA publishes the
implementing regulations for these
statutes in Title 21 of the Code of
Federal Regulations (CFR), parts 1300 to
end. These regulations are designed to
ensure that there is a sufficient supply
of controlled substances for legitimate
medical, scientific, research, and
industrial purposes and deter the
diversion of controlled substances to
illegal purposes. The CSA mandates that
DEA establish a closed system of control
for manufacturing, distributing, and
dispensing controlled substances. Any
person who manufactures, distributes,
dispenses, imports, exports, or conducts
research or chemical analysis with
controlled substances must register with
DEA (unless exempt) and comply with
the applicable requirements for the
activity. The CSA, as amended, also
requires DEA to regulate the
manufacture, distribution, retail sale,
import, and export of chemicals that
may be used to manufacture controlled
substances illegally. Listed chemicals
that are classified as List I chemicals are
important to the manufacture of
controlled substances. Those classified
as List II chemicals may be used to
manufacture controlled substances.
Combat Methamphetamine Epidemic
Act of 2005
On March 9, 2006, the President
signed the Combat Methamphetamine
Epidemic Act of 2005 (CMEA), which is
Title VII of the USA PATRIOT
Improvement and Reauthorization Act
of 2005 (Pub. L. 109–177). Among other
actions, CMEA imposed new
requirements regarding the retail sale of
scheduled listed chemical products
(drugs containing ephedrine,
pseudoephedrine, or
phenylpropanolamine, that may be
marketed or distributed lawfully in the
United States under the Federal Food,
Drug and Cosmetic Act as
nonprescription products) (21 U.S.C.
802(45)(A)). In a separate rulemaking,
‘‘Retail Sales of Scheduled Listed
Chemical Products; Self-Certification of
Regulated Sellers of Scheduled Listed
Chemical Products’’ [Docket No. DEA–
291, RIN 1117–AB05] (71 FR 56008,
September 26, 2006; corrected at 71 FR
60609, October 13, 2006), DEA
promulgated regulations implementing
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these provisions (21 U.S.C. 830(d), (e);
21 CFR part 1314).
The CMEA also subjects material
containing ephedrine, pseudoephedrine,
and phenylpropanolamine to
manufacturing and import restrictions.
Specifically, CMEA amended section
1002 of the CSA (21 U.S.C. 952(a)(1)) by
adding the List I chemicals ephedrine,
pseudoephedrine, and
phenylpropanolamine to those narcotic
raw materials whose importation into
the United States is prohibited except
for such amounts as the Attorney
General finds to be necessary to provide
for medical, scientific, or other
legitimate purposes. CMEA also
amended section 306 of the Act (21
U.S.C. 826) to establish the total annual
needs of ephedrine, pseudoephedrine,
and phenylpropanolamine 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.
Individual manufacturing and
procurement quotas for ephedrine,
pseudoephedrine, and
phenylpropanolamine were also
required to be established for persons
conducting manufacturing activities
with those chemicals. In a separate
rulemaking, ‘‘Import and Production
Quotas for Certain List I Chemicals’’
[Docket No. DEA–293, RIN 1117–AB08]
(72 FR 37439, July 10, 2007; Final Rule
73 FR 73549, December 3, 2008), DEA
promulgated regulations to implement
these provisions (21 CFR part 1315).
Further, the CMEA requires that
importers, exporters, and persons
involved in international transactions of
all listed chemicals, including
ephedrine, pseudoephedrine, and
phenylpropanolamine, provide DEA
with information regarding the
transferee (i.e., the downstream
customer), of the chemical, as well as
information regarding the quantity of
the chemical to be transferred.
Importers, exporters, and persons
involved in international transactions
are further required to provide DEA
with a return declaration regarding each
import, export, or international
transaction after the transaction is
completed (CMEA § 716, 21 U.S.C.
971(d) and (g), as amended). In a
separate rulemaking, ‘‘Implementation
of the Combat Methamphetamine
Epidemic Act of 2005; Notice of
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Transfers Following Importation or
Exportation’’ [Docket No. DEA–292, RIN
1117–AB06] (72 FR 17401, April 9,
2007; Temporary Stay of Certain
Provisions 72 FR 28601, May 22, 2007),
DEA promulgated regulations
implementing these provisions (21 CFR
1313.16, 1313.17, 1313.26, 1313.27,
1313.32, 1313.35).
Finally, the CMEA requires that the
notice of importation (DEA Form 486)
for ephedrine, pseudoephedrine, and
phenylpropanolamine ‘‘shall include all
information known to the importer on
the chain of distribution of such
chemical from the manufacturer to the
importer.’’ (CMEA § 721, 21 U.S.C.
971(h) as amended). In a separate
rulemaking, ‘‘Information on Foreign
Chain of Distribution for Ephedrine,
Pseudoephedrine, and
Phenylpropanolamine’’ [Docket No.
DEA–295, RIN 1117–AB07] (73 FR
16793, March 31, 2008), DEA proposed
regulations to implement this provision.
The List I chemicals ephedrine,
pseudoephedrine, and
phenylpropanolamine as single entity or
combination products all serve as
precursor chemicals for the illicit
manufacture of controlled substances.
Ephedrine and pseudoephedrine are the
primary precursors used in the illicit
synthesis of methamphetamine, a
schedule II controlled substance, and
methcathinone, a schedule I controlled
substance. Phenylpropanolamine is the
primary precursor used in the illicit
synthesis of amphetamine, a schedule II
controlled substance.
Licit Use
Ephedrine, pseudoephedrine, and
phenylpropanolamine all have
therapeutic uses in both over-thecounter and prescription drug products.
Ephedrine is lawfully marketed under
the Federal Food, Drug, and Cosmetic
Act as an ingredient in nonprescription
(‘‘over-the-counter’’ (OTC)) drugs as a
bronchodilator for the treatment of
asthma. Ephedrine is also available as a
nonprescription product in combination
with the active ingredient guaifenesin,
which is an expectorant.
As a prescription drug, ephedrine is
used in parenteral (injectable) form in
hospitals as part of anesthesiology kits.
Ephedrine has the beneficial effect of
increasing blood pressure very rapidly
in the event of hypotensive crisis (i.e.,
sudden loss of blood pressure
sometimes experienced during surgery).
Parenteral ephedrine is also sometimes
used to relieve acute bronchospasm.
Oral dosage forms of ephedrine are also
available as prescription drugs for the
treatment of asthma. These prescription
drug products primarily consist of
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ephedrine in combination with other
active ingredients such as potassium
iodide (an expectorant) and/or
theophylline (a bronchospamolytic).
Pseudoephedrine is lawfully
marketed under the Federal Food, Drug,
and Cosmetic Act for over-the-counter
use as a decongestant.
Phenylpropanolamine has historically
been marketed in the United States for
OTC use as a decongestant and diet aid
and there have been many legend
(prescription) drug products that
contain pseudoephedrine or
phenylpropanolamine. In the vast
majority of these preparations,
pseudoephedrine or
phenylpropanolamine were in
combination with other active
ingredients, such as antihistamines,
expectorants, and/or antitussives.
In November 2000, the U.S. Food and
Drug Administration (FDA) issued a
public health advisory concerning
phenylpropanolamine and requested
that all drug companies discontinue
marketing products containing
phenylpropanolamine due to risk of
hemorrhagic stroke. In response, many
companies have voluntarily
reformulated their products to exclude
phenylpropanolamine. Subsequently,
on December 22, 2005, the FDA
published a Notice of Proposed
Rulemaking (70 FR 75988) proposing to
categorize all over-the-counter nasal
decongestants and weight control drug
products containing
phenylpropanolamine preparations as
Category II, nonmonograph, i.e., not
generally recognized as being safe for
human consumption. Most products
containing phenylpropanolamine
intended for humans have been
withdrawn from the market, but
phenylpropanolamine is still sold by
prescription for veterinary uses.
While ephedrine and
pseudoephedrine are pharmacologically
different (and have quite different
therapeutic uses), they are directly
substitutable in the production of
methamphetamine. This is because of
the similarity of the chemical structures
of the two drugs.
Discussion of the NPRM
On November 20, 2007, DEA
published a Notice of Proposed
Rulemaking (NPRM) (72 FR 65248)
addressing two issues related to CMEA
implementation. First, DEA proposed to
eliminate the thresholds for
distribution, importation, and
exportation of pseudoephedrine and
phenylpropanolamine; the threshold for
distribution, importation, and
exportation of ephedrine was eliminated
previously. Limits on retail transactions
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are set in the CMEA and were addressed
in DEA’s Interim Rule regarding the
retail provisions of the CMEA (71 FR
56008, September 26, 2006; corrected at
71 FR 60609, October 13, 2006). Second,
DEA proposed to clarify that all
distribution, importation, and
exportation transactions involving drug
products containing ephedrine,
pseudoephedrine, or
phenylpropanolamine are regulated
transactions.
The comment period for the NPRM
closed on January 22, 2008. DEA
received one comment on the NPRM.
Thresholds
Under the existing regulations (21
CFR 1310.04), the threshold for nonretail distribution, import, export, and
international transactions of
pseudoephedrine is 1 kilogram and for
phenylpropanolamine, 2.5 kilograms. A
single transaction or multiple
transactions in a month with a single
customer that equal or exceed the
threshold are considered regulated
transactions and trigger the reporting
and recordkeeping requirements of 21
CFR part 1310. If DEA has not
established a monthly threshold for a
List I chemical, then all transactions
must be reported. DEA has not
established a threshold for ephedrine;
thus all non-retail distribution, import,
and export transactions involving
ephedrine are already subject to
recordkeeping and reporting
requirements.
CMEA mandates that DEA establish
the total annual need for ephedrine,
pseudoephedrine, and
phenylpropanolamine to be
manufactured or imported 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 (21 U.S.C.
826). These requirements apply equally
to products containing these three List
I chemicals as they do to the List I
chemicals themselves. To limit the
supply of the chemicals to the amount
needed to meet the national need,
CMEA requires DEA to establish import
and production quotas for all three
chemicals. DEA published regulations
implementing procedures for import
and production quotas for the List I
chemicals ephedrine, pseudoephedrine,
and phenylpropanolamine on July 10,
2007 (72 FR 37439; Final Rule 73 FR
73549, December 3, 2008). DEA
established the 2008 assessment of
annual national needs for the List I
chemicals ephedrine, pseudoephedrine,
and phenylpropanolamine on December
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26, 2007 (72 FR 73361) and has
established the assessment of annual
national needs every year thereafter.
To obtain the information needed to
assess the national need and set quotas
to limit imports and production to meet
that need, DEA identified two
inadequacies regarding its existing
regulations. First, persons who
manufacture or import prescription
drugs containing the chemicals are not
registered. In a separate rulemaking,
‘‘Registration Requirements for
Importers and Manufacturers of
Prescription Drug Products Containing
Ephedrine, Pseudoephedrine, or
Phenylpropanolamine’’ [Docket No.
DEA–294, RIN 1117–AB09] (73 FR 3432,
January 18, 2008), DEA proposed to
revise its registration requirements to
cover manufacturers and importers of
prescription drugs containing these
chemicals and will issue quotas to them
although the distribution and export of
prescription drugs containing the
chemicals will continue to be exempt
from DEA regulatory control.
The second inadequacy involves the
thresholds that apply to
pseudoephedrine and
phenylpropanolamine. To determine the
annual national need and set quotas,
DEA must obtain information on all
imports and production involving the
chemicals, not just those that exceed the
existing thresholds. The existing
thresholds, although relatively low,
potentially allow a considerable market
in the chemicals to continue
unregulated. For example, under the
current 1 kilogram (2.2 pound)
threshold for pseudoephedrine, a person
could import or distribute more than 2
pounds a month, or approximately 25
pounds a year, of pseudoephedrine
without exceeding the threshold and
triggering DEA’s controls. Assuming a
conservative 50 percent conversion of
pseudoephedrine to methamphetamine,
a person could annually manufacture
approximately 12.5 pounds of
methamphetamine with that total sum
of sub-threshold quantities. DEA trend
reporting for 2008 indicated that the
national price for one pound of
methamphetamine hydrochloride
(powder) ranged from as low as $5,000
per pound in the DEA New Orleans and
Washington DC Field Divisions, to as
much as $26,000 and $27,000 per pound
in the DEA New York and Atlanta Field
Divisions, respectively. To further
implement the CMEA, this rule seeks to
curb the availability of pseudoephedrine
at the wholesale level for illicit
purposes.
Additionally, under the current 2.5
kilogram (5.5 pound) threshold for
phenylpropanolamine, a person could
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import or distribute more than 5 pounds
a month, or approximately 66 pounds a
year of phenylpropanolamine without
exceeding the threshold and triggering
DEA’s controls. Assuming a
conservative 50 percent conversion of
phenylpropanolamine to amphetamine,
a person could annually manufacture
approximately 33 pounds of
amphetamine with that total sum of subthreshold quantities. To the extent that
amphetamine is marketed on the street
as methamphetamine, amphetamine
often has a street value comparable to
methamphetamine. To further
implement the CMEA, this rule seeks to
curb the availability of
phenylpropanolamine at the wholesale
level for illicit purposes.
Currently, DEA is notified of all
imports, exports, and international
transactions of these chemicals which
exceed the established thresholds or for
which no threshold is established. DEA
does not, however, receive import,
export, and international transaction
notifications for imports, exports, and
international transactions of listed
chemicals less than established
thresholds. If DEA does not eliminate
the threshold for imports, exports, and
international transactions of
pseudoephedrine and
phenylpropanolamine, DEA will not
have complete and accurate information
regarding the quantities of these
chemicals imported into, and exported
from, the United States. Further,
manufacturers and distributors are not
required to maintain records of
distributions of listed chemicals at or
below established thresholds. Without
the maintenance of these records, DEA
will not have complete and accurate
information regarding the quantities of
these chemicals being distributed
domestically.
Comments Regarding Removal of
Thresholds for Pseudoephedrine and
Phenylpropanolamine
DEA did not receive any comments
regarding the proposed removal of
thresholds for the List I chemicals
pseudoephedrine and
phenylpropanolamine and therefore, is
finalizing those provisions as proposed.
Thus, to establish the controls that
Congress mandated and limit imports
and production to that needed for
legitimate uses, DEA is eliminating the
thresholds for all transactions involving
the List I chemicals pseudoephedrine
and phenylpropanolamine. As
discussed previously, no threshold
currently exists for transactions
involving the List I chemical ephedrine;
thus, all transactions are regulated. Any
registrant manufacturing, distributing,
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importing, or exporting
pseudoephedrine or
phenylpropanolamine, in any quantity,
either as bulk chemicals or in over-thecounter drug products, will be subject to
the reporting and recordkeeping
requirements. Any manufacturer or
importer of prescription drug products
containing one of the chemicals will
also be subject to reporting and
recordkeeping requirements.
Importation of the chemicals is allowed
only if it is within an import quota that
the importer has applied for and been
granted by DEA. The one exception to
the import limits provided in the CMEA
is that an individual may import not
more than 7.5 grams in any 30-day
period of a scheduled listed chemical
product (i.e., a product containing
ephedrine, pseudoephedrine, or
phenylpropanolamine which may be
marketed or distributed lawfully in the
United States under the Federal Food,
Drug, and Cosmetic Act as a
nonprescription drug) by means of the
U.S. Postal Service or a private or
commercial carrier (21 U.S.C. 844(a)).
The distribution and export of
prescription drug products containing
the chemicals are not covered because
DEA will be able to obtain the
information it needs for the assessment
of annual national needs from importers
and manufacturers of these products.
DEA has not determined that
prescription drug products are being
diverted.
Regulated Transactions
The definition of ‘‘regulated
transaction’’ as amended by CMEA (21
U.S.C. 802(39)(A)(iv)) excludes:
(iv) Any transaction in a listed
chemical that is contained in a drug that
may be marketed or distributed lawfully
in the United States under the Federal
Food, Drug, and Cosmetic Act (21 U.S.C.
301 et seq.), subject to clause (v),
unless—
(I) The Attorney General has
determined under section 204 of the Act
(21 U.S.C. 814) that the drug or group
of drugs is being diverted to obtain the
listed chemical for use in the illicit
production of a controlled substance;
and
(II) The quantity of the listed chemical
contained in the drug included in the
transaction or multiple transactions
equals or exceeds the threshold
established for that chemical by the
Attorney General.
Section 814 (b) states that:
In removing a drug or group of drugs
from exemption * * * the Attorney
General shall consider, with respect to
a drug or group of drugs that is
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proposed to be removed from
exemption—
(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.
DEA in this rule is clarifying that
nonprescription (OTC) drug products
containing ephedrine, pseudoephedrine,
and phenylpropanolamine do not
qualify for the exemption from the
definition of ‘‘regulated transaction’’
based on the three factors listed in 21
U.S.C. 814(b) for the reasons discussed
below.
Evaluation of Statutory Factors for
Removal of Exemption From the
Definition of ‘‘Regulated Transaction’’
Note: For a more detailed discussion of
DEA’s analysis regarding each factor, see the
NPRM preamble (72 FR 65248, November 20,
2007).
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Factor 1: Scope, Duration, and
Significance of Diversion
Current Seizures
Throughout the late 1970s,
methamphetamine was illicitly
produced primarily through the use of
the precursor phenylacetone (phenyl-2propanone (P2P)) by outlaw motorcycle
gangs in the United States. In response
to the use of P2P, DEA controlled P2P
as a schedule II controlled substance in
1980, under the immediate precursor
provisions of the CSA, specifically 21
U.S.C. 811(e). Clandestine laboratory
operators responded by developing a
variety of synthetic methods for
producing P2P and also migrated to the
use of ephedrine as precursor material.
In 1989, DEA control of chemicals
was initiated with passage of the
Chemical Diversion and Trafficking Act
of 1988 (CDTA) (Subtitle A of Title VI
of Pub. L. 100–690). This law placed
recordkeeping and reporting
requirements on a wide variety of
precursors and essential chemicals used
in every aspect of clandestine drug
manufacture, including bulk powder
ephedrine, pseudoephedrine, and
phenylpropanolamine. In response to
the regulations, traffickers moved to the
illicit use of single-entity ephedrine
OTC tablets as an unregulated source of
precursor material for the production of
methamphetamine.
In the early 1990s, a number of wellpublicized seizures of rogue businesses
(and prosecutions of their owners)
began to impact the tablet
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manufacturing industry, and a loophole
allowing the sale of single-entity
ephedrine products was closed in late
1993 with the passage of the Domestic
Chemical Diversion Control Act of 1993
(DCDCA) (Pub. L. 103–200).
In 1996, the existing controls on
precursor and essential chemicals
imposed by the CDTA and DCDCA were
further tightened with the passage of the
Comprehensive Methamphetamine
Control Act of 1996 (MCA) (Pub. L. 104–
237). What followed was a series of
legislative actions on both the Federal
and State levels to tighten controls on
pharmaceutical products that serve as
precursor material for clandestine
methamphetamine laboratories. At the
Federal level, this effort included
passage of the Methamphetamine AntiProliferation Act of 2000 (MAPA) (Title
XXXVI of Pub. L. 106–310). Today,
however, ephedrine and
pseudoephedrine OTC products
continue to serve as the primary
precursor source for the illicit
production of methamphetamine, which
has spread across the entire United
States in epidemic proportions.
As DEA discussed in the NPRM,
methamphetamine remains the primary
drug produced in illicit laboratories
within the United States. Data from the
El Paso Intelligence Center’s (EPIC)
Clandestine Laboratory Database
indicates that 10,022 methamphetamine
laboratories were seized in calendar
year 2004, 6,021 laboratories in calendar
year 2005, 3,977 laboratories in calendar
year 2006, 3,097 laboratories in calendar
year 2007, and 3,924 laboratories in
calendar year 2008 (as reported to EPIC
through November 27, 2009). According
to EPIC, from January 1, 2000, through
December 31, 2008, there were at least
7,385 laboratories reportedly using
ephedrine and 51,102 reportedly using
pseudoephedrine as precursor material
for methamphetamine production.
Additionally EPIC reports the seizure of
48 amphetamine laboratories (using
phenylpropanolamine) during the same
period. The vast majority of these
laboratories used pharmaceutical
products containing pseudoephedrine,
ephedrine, and phenylpropanolamine as
the source of precursor material.
Illicit Uses
Factor 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
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Factor 3: Whether the Listed Chemical
Can Be Readily Recovered From the
Drug or Group of Drugs
As DEA discussed in the NPRM, the
production of methamphetamine from
ephedrine or pseudoephedrine can be
accomplished via a series of reactions
using widely available ‘‘recipes’’ and can
be accomplished with little or no
chemistry expertise. A variety of
different methods exist to convert the
precursor material to
methamphetamine. If very small batches
are made, there is not even a
requirement to heat the reactants. For
example, quantities of ephedrine or
pseudoephedrine, iodine, and red
phosphorous can be reacted with the
addition of water and small quantities of
methamphetamine can be produced. For
larger batches the reactants are
combined and heated for several hours.
A variety of different reagents can be
used to make the conversion to
methamphetamine if the precursors
ephedrine and pseudoephedrine are
obtained. These reactants can also be
used to convert phenylpropanolamine
to amphetamine. Manufacturing
procedures are readily available on the
Internet and even unskilled persons can
obtain a 50–70 percent yield of
methamphetamine or amphetamine.
Pseudoephedrine and ephedrine can
also serve as precursor material for the
manufacture of the schedule I controlled
substance methcathinone. From January
1, 2000, through December 31, 2008,
there were 202 methcathinone
laboratory seizures reported to EPIC.
As DEA discussed in the NPRM, there
is a common misconception in industry
and among some in the public that OTC
drug products, particularly
pseudoephedrine or ephedrine products
in combination with other medically
active ingredients (‘‘combo products’’),
are somehow less likely to be diverted
or are less desirable among clandestine
laboratory operators for the manufacture
of methamphetamine. This is not the
case.
Most of the clandestine laboratories
found in the United States are using
tablets, either single-entity or
combination. In many of the
methamphetamine exhibits analyzed by
DEA analytical laboratories, the
presence of antihistamines is detected,
indicating that combination products
were used in the reactions.
While the vast majority of clandestine
laboratories seized have used tableted
pseudoephedrine and ephedrine
products, gel caps and liquid dosage
form products can easily serve as the
source of precursor material for the
production of methamphetamine. DEA
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scientific studies show that liquid, gel
cap, and combination products are
easily used as the source of precursor
material and the pseudoephedrine/
ephedrine from these products can be
easily extracted with appropriate
reagents/solvents. These reagents/
solvents are all readily available at
hardware and auto parts stores in the
United States.
The controlled substances produced
from these chemicals,
methamphetamine and amphetamine,
have a high abuse potential. The public
health consequences of the
manufacture, trafficking, and abuse of
these two substances are well known
and documented.
Comments Regarding Clarification of
Regulated Transactions
In response to the November 20, 2007,
NPRM (72 FR 65248), DEA received one
comment. The commenter expressed
concerns regarding the findings made by
DEA that concluded that OTC products
containing either pseudoephedrine or
ephedrine (in combination with other
active ingredients) are (1) Easily used in
the illicit production of a controlled
substance (e.g. methamphetamine) and
(2) the listed chemical can be readily
recovered. The commenter further
expressed concerns regarding the
applicability of these findings to
combination products in the form of
liquids, gel caps and solid dosage forms.
The commenter expressed concerns that
the NPRM did not provide sufficient
data to substantiate DEA’s findings,
including OTC combination product
seizures and evidence of diversion of
such materials. Additionally, the
commenter asserted that ephedrine/
guaifenesin combination products
warrant special treatment and should
not be subject to the proposed
rulemaking.
DEA disagrees with the commenter’s
basic premise that ephedrine and
pseudoephedrine combination products
(in liquid, soft-gel capsule, and solid
dosage form) have less utility in
clandestine laboratory processing of
methamphetamine. DEA laboratory
extraction studies have scientifically
demonstrated that such materials are
easily used as precursor material in the
production of methamphetamine.
Additionally, such materials have been
identified at seized clandestine
methamphetamine laboratories, and
contaminants identified in seized
methamphetamine exhibits document
the use of such products as precursor
material. These data demonstrate that
these materials are (1) easily used in the
illicit production of methamphetamine
and (2) the listed chemical can be
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readily recovered. This has been
documented in both DEA laboratory
studies and in actual seizures.
Use of OTC Combination Products as
Precursor Material
DEA’s Office of Forensic Sciences has
performed extraction studies
demonstrating that combination OTC
pseudoephedrine/ephedrine products
(in soft-gel capsules, liquids, and solid
forms, and containing combination
ingredients) can be readily extracted
and utilized as the source of precursor
material for production of
methamphetamine. These studies
illustrated that such extractions were
readily achievable and precursor
materials were readily extractible.
Furthermore, the DEA Special Testing
and Research Laboratory conducts indepth analyses of seized
methamphetamine samples. The
information obtained from these
analyses is derived from samples
obtained and analyzed from a selective
sampling of domestic and foreign
seizures, and is not necessarily
representative of all methamphetamine
samples submitted to the DEA
laboratory system. Among other things,
the in-depth analytical procedures
enable analysts to determine when
combination OTC ephedrine and/or
pseudoephedrine products are used as
the source of precursor chemicals, due
to impurities present in seized
methamphetamine. The crude isolation
procedures used in clandestine
methamphetamine laboratories to
extract l–ephedrine or dpseudoephedrine from OTC products
usually co-extract some of the other
active ingredients commonly found in
combination products. As a result,
methamphetamine samples often
contain one or more of the following coingredients: brompheniramine,
chlorpheniramine, triprolidine,
loratadine, carbinoxamine, and other
common co-ingredients or their
respective reaction by-products.
Between Calendar Year 2005 and
Calendar Year 2007, combination
ephedrine and pseudoephedrine
products were utilized as precursor
material in 760 out of 1343 samples
analyzed. For the reporting period
ending July 2009, 78 out of 145
additional methamphetamine samples
analyzed contained these coingredients, therefore illustrating that 54
percent of these samples were made
using combination ephedrine or
pseudoephedrine products.
Additionally, DEA’s System to
Retrieve Information on Drug Evidence
(STRIDE) indicates that such products
have been utilized as precursor material
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38919
in the manufacture of
methamphetamine. For the period
January 2004 through November 2009,
approximately 725 methamphetamine
exhibits analyzed by DEA laboratories
contained the common OTC
combination product ingredients
chlorpheniramine, diphenhydramine,
guaifenesin or triprolidine. The number
of guaifenesin exhibits accounted for
approximately 5 percent of these
samples. For the period January 2004
through November 2009, approximately
299 additional exhibits were identified
as containing ephedrine and/or
pseudoephedrine in combination with
guaifenesin.
Based upon DEA scientific extraction
studies, actual seizures of OTC
ephedrine and/or pseudoephedrine
combination products (including gel
capsules, liquids and tablets) and the
analysis of seized methamphetamine
containing co-ingredients commonly
found in OTC products, DEA finds that
such materials are (1) Easily used in the
illicit production of a controlled
substance (e.g., methamphetamine) and
(2) the listed chemical can be readily
recovered. DEA therefore finds that
these sources of precursor material
should be subject to regulatory controls
under the CSA.
Findings
Therefore, based on the above
discussion, the Administrator of the
Drug Enforcement Administration,
under the authority delegated by the
Attorney General, finds, after
considering the factors specified in 21
U.S.C. 814(b), that drug products
containing the List I chemicals
ephedrine, pseudoephedrine, and
phenylpropanolamine are being
diverted for the illicit production of
controlled substances, namely
methamphetamine and amphetamine.
As DEA has discussed, these products
have a demonstrated history over the
past 20 years of diversion for illicit
purposes. These List I chemicals are
diverted regardless of formulation—
liquid, nonliquid, gel capsule—and
regardless of dosage strength.
Accordingly, the Administrator of the
Drug Enforcement Administration
removes drug products containing the
List I chemicals ephedrine,
pseudoephedrine, and
phenylpropanolamine from exemption
from the definition of ‘‘regulated
transaction’’ under 21 U.S.C.
802(39)(a)(iv). As such, unless otherwise
exempted, such materials are subject to
the chemical regulatory control
provisions of the CSA. DEA is adding a
new section 1310.14 that removes these
drugs from the exemption.
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The CSA has specifically exempted
retail transactions involving scheduled
listed chemical products from the
definition of regulated transaction (21
U.S.C. 802(39)(a)(v)) and established a
separate set of regulations, 21 CFR part
1314, that control those retail
transactions (71 FR 56008, September
26, 2006; corrected at 71 FR 60609,
October 13, 2006).
Technical Correction
While drafting this rulemaking, DEA
became aware of an inaccurate citation
in 21 CFR 1310.10, the section
paralleling the criteria to be considered
in evaluating the statutory factors for
removal of exemption from the
definition of ‘‘regulated transaction’’ at
21 U.S.C. 814 and discussed above.
Specifically, the definition of ‘‘regulated
transaction’’ cited in 21 CFR 1310.10 is
inaccurate. Therefore, to alleviate any
confusion, DEA is correcting this
citation.
Regulatory Certifications
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Regulatory Flexibility Act
The Deputy Administrator hereby
certifies that this rulemaking has been
drafted in accordance with the
provisions of the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601–612). Without
this rule, DEA would not be able to
effectively implement the quota and
import provisions of CMEA.
As DEA has demonstrated throughout
this document, traffickers and others in
search of the chemicals necessary for
clandestine manufacture of
methamphetamine and amphetamine,
are actively looking to exploit any
loophole in chemical controls.
DEA notes that the effect of
eliminating the thresholds for
pseudoephedrine and
phenylpropanolamine could impose a
minimal burden on regulated entities.
Although it is likely that many of the
registrants who handle the two
chemicals are small businesses under
the Small Business Administration
definition of small entities, the changes
impose virtually no burden on these
entities for three reasons. First, most, if
not all, legitimate transactions at the
import, export, manufacturing, and
distribution level are in excess of the
previous thresholds. Second, although it
is possible that some registrants may
have some transactions that will be
newly regulated, the recordkeeping for
these can be met with standard business
records. The only information required
in records for regulated transactions is
the name and address of the seller and
purchaser (plus their DEA registration
numbers, if applicable); the date of the
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15:15 Jul 06, 2010
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transaction; the name, quantity, and
form of packaging of the listed chemical;
the method of transfer; and the method
of identification used by the customer
and any unique identification number
associated with the identification. This
information is normally included on
purchase orders or invoices and the
shipping papers and is needed to
complete and track the transaction. As
long as the purchaser can extract the
records for examination, if necessary, no
additional effort is needed. Because
almost all business records for
manufacturers, importers, and
distributors are now generated and
transmitted electronically, DEA does not
expect that any registrant will need
additional recordkeeping.
Third, if any person is importing or
exporting in very small quantities, there
may be some additional import/export
declarations required, but these forms
require less than half an hour to
complete and file. The only other
requirement is to report suspicious
transactions. These reports also require
less than a half hour to complete and
file.
As noted above, DEA does not believe
that legitimate importers or exporters
are handling such small quantities. The
purpose of this rule is to close a
loophole that could be exploited by
those seeking the chemicals for illicit
purposes and to ensure that DEA can
accurately assess the legitimate need.
The Deputy Administrator, therefore,
certifies that the rule will not have a
significant economic impact on a
substantial number of small entities.
Executive Order 12866
The Deputy Administrator further
certifies that this rulemaking has been
drafted in accordance with the
principles in Executive Order 12866
section 1(b). It has been determined that
this is ‘‘a significant regulatory action.’’
Therefore, this action has been reviewed
by the Office of Management and
Budget. This rule supports
implementation of provisions of the
CMEA. The CMEA is expansive in its
breadth, essentially reclassifying
ephedrine, pseudoephedrine, and
phenylpropanolamine as schedule II
controlled substances for purposes of
importation and production, imposes
new retail restrictions on these
products, and mandates new domestic
and import quotas. Without this rule,
traffickers could exploit belowthreshold transactions, which are not
reported to DEA and for which records
are not required to be maintained, to
divert valuable quantities of
pseudoephedrine and
phenylpropanolamine for the
PO 00000
Frm 00006
Fmt 4700
Sfmt 4700
clandestine manufacture of
methamphetamine and/or
amphetamine. Further, without this
rule, DEA will not have complete
information on which to base its
assessment of the annual national needs
for the List I chemicals ephedrine,
pseudoephedrine, and
phenylpropanolamine as DEA does not
receive information regarding belowthreshold transactions. This lack of
information would create a loophole in
the quota system, and would prevent
DEA from fulfilling its legislative
mandate that imports of
pseudoephedrine and
phenylpropanolamine be prohibited
except for medical, scientific, or other
legitimate purposes. Without this rule,
DEA will not be able to effectively and
fully implement the quota and import
provisions of the CMEA.
As discussed above, DEA does not
anticipate that this change will impose
more than the minimal costs that would
be associated with reporting
transactions that the registrant thought
suspicious and possibly filing forms for
import and export notifications. The
benefits of the rule are those associated
with controlling access to chemicals
used to manufacture methamphetamine,
and other controlled substances,
illicitly. As has been discussed
extensively throughout this document,
traffickers and others are actively
looking to exploit any loophole in
chemical controls to continue their
operations. As noted previously, the
current thresholds could permit a
person to divert approximately 25
pounds of pseudoephedrine and 66
pounds of phenylpropanolamine
annually, without exceeding existing
thresholds. This rule closes a loophole
that could result in the undocumented
diversion of these chemicals for illicit
production of significant quantities of
methamphetamine and/or
amphetamine. As noted previously in
this rule, below-threshold transactions
are not documented to DEA; the
diversion of below-threshold quantities
of these precursor chemicals could
result in the illicit production of
significant quantities of
methamphetamine and/or
amphetamine.
Executive Order 12988
This regulation meets the applicable
standards set forth in sections 3(a) and
3(b)(2) of Executive Order, 12988 Civil
Justice Reform.
Executive Order 13132
This rulemaking does not impose
enforcement responsibilities on any
State; nor does it diminish the power of
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Federal Register / Vol. 75, No. 129 / Wednesday, July 7, 2010 / Rules and Regulations
any State to enforce its own laws.
Accordingly, this rulemaking does not
have federalism implications warranting
the application of Executive Order
13132.
Unfunded Mandates Reform Act of 1995
This rule will not result in the
expenditure by State, local, and Tribal
governments, in the aggregate, or by the
private sector, of $120,000,000 or more
(adjusted for inflation) in any one year,
and will not significantly or uniquely
affect small governments. Therefore, no
actions were deemed necessary under
the provisions of the Unfunded
Mandates Reform Act of 1995.
Congressional Review Act
This rule is not a major rule as
defined by section 804 of the Small
Business Regulatory Enforcement
Fairness Act of 1996 (Congressional
Review Act). This rule will not result in
an annual effect on the economy of
$100,000,000 or more; a major increase
in costs or prices; or significant adverse
effects on competition, employment,
investment, productivity, innovation, or
on the ability of United States-based
companies to compete with foreignbased companies in domestic and
export markets.
Paperwork Reduction Act
This rule requires that records be
maintained regarding distributions of
the List I chemicals pseudoephedrine
and phenylpropanolamine. These
records are maintained as a normal
course of business.
The rule also reduces the thresholds
for the List I chemicals
pseudoephedrine and
phenylpropanolamine from 1 kilogram
and 2.5 kilograms, respectively, to zero,
thereby requiring that DEA receive
advance notification of all importations
and exportations of these List I
chemicals. DEA notes that it already
receives some Import/Export
Declarations if the cumulative amount
of the transactions exceeds the
thresholds on a monthly basis.
Therefore, DEA does not believe that
this change will significantly increase
the burden associated with this
information collection. Specifically,
DEA estimates that 53 additional export
notifications and 53 additional export
return declarations will be received
annually. Further, DEA estimates that
50 additional import declarations and
55 additional import return declarations
will be received annually. DEA assumes
10 percent of all imports will not be
transferred in the first thirty days and
will necessitate submission of a
subsequent return declaration. The
receipt of these additional forms
increases the hour burden by 55 hours
annually. DEA did not receive any
comments regarding the Paperwork
Reduction Act aspects of the Notice of
Proposed Rulemaking. Therefore, DEA
is revising its existing information
collection [OMB approval number
1117–0023 ‘‘Import/Export Declaration
for List I and List II Chemicals’’, DEA
Form 486] to reflect the increased
burden associated with receipt of these
import/export declarations.
The Department of Justice, Drug
Enforcement Administration, submitted
the following information collection
request to the Office of Management and
Budget for review and clearance in
accordance with review procedures of
the Paperwork Reduction Act of 1995.
The proposed information collections
were published in the NPRM to obtain
comments from the public and affected
agencies
Overview of Information Collection
1117–0023
(1) Type of Information Collection:
Revision of a Currently Approved
Collection.
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Number of
respondents
Number of
responses
38921
(2) Title of the Form/Collection:
Import/Export Declaration for List I and
List II Chemicals.
(3) Agency form number, if any, and
the applicable component of the
Department sponsoring the collection:
Form number: DEA Form 486 and
DEA Form 486A.
Component: Office of Diversion
Control, Drug Enforcement
Administration, U.S. Department of
Justice
(4) Affected public who will be asked
or required to respond, as well as a brief
abstract:
Primary: Business or other for-profit.
Other: None.
Abstract: Persons importing,
exporting, and conducting international
transactions with List I and List II
chemicals must notify DEA of those
transactions in advance of their
occurrence, including information
regarding the person(s) to whom the
chemical will be transferred and the
quantity to be transferred. Persons must
also provide return declarations,
confirming the date of the importation,
exportation, or international transaction
and transfer, and the amounts of the
chemical transferred. For the List I
chemicals ephedrine, pseudoephedrine,
and phenylpropanolamine, importers
must report all information known to
them on the chain of distribution of the
chemical from the foreign manufacturer
to the United States importer. This
information is used to prevent
shipments not intended for legitimate
purposes.
(5) An estimate of the total number of
respondents and the amount of time
estimated for an average respondent to
respond: A respondent may submit
multiple responses. The table below
presents information regarding the
number of respondents, responses, and
associated burden hours.
Average time per response
Total
Form 486 (export) .....................................................................
Form 486 (export Return Declaration) ......................................
Form 486 (import) .....................................................................
Form 486 (import return declaration) * ......................................
Form 486A (import) * .................................................................
Form 486A (import return declaration)* ....................................
Form 486 (international transaction) .........................................
Form 486 (international transaction return declaration) ............
Quarterly reports for imports of acetone, 2-butanone, and toluene.
193
193
120
120
30
30
14
14
110
10,380
10,380
1,268
1,395
400
440
14
14
440
0.283 hour (17 minutes) .........
0.166 hour (10 minutes) .........
0.333 hour (20 minutes) .........
0.2 hour (12 minutes) .............
0.4 hour (24 minutes) .............
0.2 hour (12 minutes) .............
0.2 hour (12 minutes) .............
0.08 hour (5 minutes) .............
0.5 hour (30 minutes) .............
2,941 hours.
1,730 hours.
422.6 hours.
279 hours.
160 hours.
88 hours.
2.8 hours.
1.2 hours.
220 hours.
Total ...................................................................................
193
....................
.................................................
5,844.6 hours.
* DEA assumes 10 percent of all imports will not be transferred in the first 30 days and will necessitate submission of a subsequent return
declaration.
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Federal Register / Vol. 75, No. 129 / Wednesday, July 7, 2010 / Rules and Regulations
(6) An estimate of the total public
burden (in hours) associated with the
collection: 5,845 annual burden hours.
If additional information is required,
contact: Lynn Bryant, Department
Clearance Officer, United States
Department of Justice, Justice
Management Division, Policy and
Planning Staff, Patrick Henry Building,
Suite 1600, 601 D Street, NW.,
Washington, DC 20530.
List of Subjects in 21 CFR Part 1310
Drug traffic control, Exports, Imports,
Reporting and recordkeeping
requirements.
■ For the reasons set forth above, 21
CFR part 1310 is amended as follows:
PART 1310—RECORDS AND
REPORTS OF LISTED CHEMICALS
AND CERTAIN MACHINES
1. The authority citation for part 1310
continues to read as follows:
■
Code
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
6724
8317
8791
2704
8750
8328
8323
cprice-sewell on DSK8KYBLC1PROD with RULES
2. Section 1310.04 is amended by
revising paragraphs (f)(1)(i) table and
(ii), (g)(1)(i) through (vii), and adding
paragraphs (g)(1)(viii) and (ix) to read as
follows:
■
§ 1310.04
Maintenance of records.
*
*
*
*
*
*
(f) * *
(1) * *
(i) * *
Chemical
8522
8530
8256
8735
8675
8676
8678
6695
8704
8520
8502
8115
8119
........................
........................
........................
........................
........................
........................
........................
15:15 Jul 06, 2010
Jkt 220001
(vi) Pseudoephedrine, its salts, optical
isomers, and salts of optical isomers
(vii) Phenylpropanolamine, its salts,
optical isomers, and salts of optical
isomers
(viii) Red phosphorus
(ix) White phosphorus (Other names:
Yellow Phosphorus)
*
*
*
*
*
3. Section 1310.10 is amended by
revising paragraph (a) introductory text
to read as follows:
■
§ 1310.10 Removal of the exemption of
drugs distributed under the Food, Drug and
Cosmetic Act.
(a) The Administrator may remove
from exemption under
§ 1300.02(b)(28)(i)(D) of this chapter any
drug or group of drugs that the
Administrator finds is being diverted to
obtain a listed chemical for use in the
illicit production of a controlled
substance. In removing a drug or group
of drugs from the exemption the
Administrator shall consider:
*
*
*
*
*
2.5 kilograms.
2.5 kilograms.
1 kilogram.
500 grams.
4 kilograms.
1 gram.
4 kilograms.
§ 1310.14 Removal of exemption from
definition of regulated transaction.
The Administrator finds that the
following drugs or groups of drugs are
being diverted to obtain a listed
chemical for use in the illicit production
of a controlled substance and removes
the drugs or groups of drugs from
exemption under § 1300.02(b)(28)(i)(D)
of this chapter pursuant to the criteria
listed in § 1310.10 of this part:
(a) Nonprescription drugs containing
ephedrine, its salts, optical isomers, and
salts of optical isomers.
(b) Nonprescription drugs containing
phenylpropanolamine, its salts, optical
isomers, and salts of optical isomers.
(c) Nonprescription drugs containing
pseudoephedrine, its salts, optical
isomers, and salts of optical isomers.
Dated: June 19, 2010.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 2010–16388 Filed 7–6–10; 8:45 am]
BILLING CODE 4410–09–P
4. Section 1310.14 is added to read as
follows:
Frm 00008
Fmt 4700
*
40 kilograms.
30 kilograms.
4 kilograms.
1 kilogram.
10 grams.
20 grams.
1 kilogram.
1.7 kilograms (or 1 liter by volume).
4 kilograms.
1 kilogram.
4 kilograms.
1 kilogram.
1 kilogram.
■
PO 00000
*
Threshold by base weight
N-Acetylanthranilic acid, its esters, and its salts ...................................................
Anthranilic acid, its esters, and its salts ................................................................
Benzaldehyde ........................................................................................................
Benzyl cyanide .......................................................................................................
Ergonovine and its salts ........................................................................................
Ergotamine and its salts ........................................................................................
Ethylamine and its salts .........................................................................................
Hydriodic acid ........................................................................................................
Isosafrole ................................................................................................................
Methylamine and its salts ......................................................................................
3,4–Methylenedioxyphenyl-2-propanone ...............................................................
N–Methylephedrine, its salts, optical isomers, and salts of optical isomers .........
N–Methylpseudoephedrine, its salts, optical isomers, and salts of optical isomers.
Nitroethane .............................................................................................................
Norpseudoephedrine, its salts, optical isomers, and salts of optical isomers ......
Phenylacetic acid, its esters, and its salts .............................................................
Piperidine and its salts ...........................................................................................
Piperonal (also called heliotropine) .......................................................................
Propionic anhydride ...............................................................................................
Safrole ....................................................................................................................
(ii) For List I chemicals that are
contained in scheduled listed chemical
products as defined in
§ 1300.02(b)(34)(i) of this chapter, the
thresholds established in paragraph (g)
of this section apply only to non-retail
distribution, import, and export. Sales
of these products at retail are subject to
the requirements of part 1314 of this
chapter.
*
*
*
*
*
(g) * * *
(1) * * *
(i) Ephedrine, its salts, optical
isomers, and salts of optical isomers;
(ii) Gamma-Butyrolactone (Other
names include: GBL; Dihydro-2(3H)furanone; 1,2-Butanolide; 1,4Butanolide; 4-Hydroxybutanoic acid
lactone; gamma-hydroxybutyric acid
lactone)
(iii) Hypophosphorous acid and its
salts (including ammonium
hypophosphite, calcium hypophosphite,
iron hypophosphite, potassium
hypophosphite, manganese
hypophosphite, magnesium
hypophosphite, and sodium
hypophosphite)
(iv) Iodine
(v) N-phenethyl-4-piperidone (NPP)
VerDate Mar<15>2010
Authority: 21 U.S.C. 802, 827(h), 830,
871(b), 890.
Sfmt 9990
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Agencies
[Federal Register Volume 75, Number 129 (Wednesday, July 7, 2010)]
[Rules and Regulations]
[Pages 38915-38922]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-16388]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
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Federal Register / Vol. 75, No. 129 / Wednesday, July 7, 2010 / Rules
and Regulations
[[Page 38915]]
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Part 1310
[Docket No. DEA-296F]
RIN 1117-AB10
Removal of Thresholds for the List I Chemicals Pseudoephedrine
and Phenylpropanolamine
AGENCY: Drug Enforcement Administration, Department of Justice.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Drug Enforcement Administration (DEA) is removing the
thresholds for importation, exportation, and domestic distributions of
the List I chemicals pseudoephedrine and phenylpropanolamine. This
rulemaking is being conducted as part of DEA's implementation of the
Combat Methamphetamine Epidemic Act of 2005 and is needed to implement
the Act's requirements for import and production quotas and to address
the potential diversion of these chemicals. DEA is also clarifying that
all transactions of drug products containing ephedrine,
pseudoephedrine, and phenylpropanolamine, except retail transactions,
are considered to be regulated transactions.
DATES: Effective Date: This rule is effective August 6, 2010.
FOR FURTHER INFORMATION CONTACT: Mark W. Caverly, Chief, Liaison and
Policy Section, Office of Diversion Control, Drug Enforcement
Administration, 8701 Morrissette Drive, Springfield, VA 22152, (202)
307-7297.
SUPPLEMENTARY INFORMATION:
DEA's Legal Authority
DEA implements the Comprehensive Drug Abuse Prevention and Control
Act of 1970, often referred to as the Controlled Substances Act (CSA)
and the Controlled Substances Import and Export Act (CSIEA) (21 U.S.C.
801-971), as amended. DEA publishes the implementing regulations for
these statutes in Title 21 of the Code of Federal Regulations (CFR),
parts 1300 to end. These regulations are designed to ensure that there
is a sufficient supply of controlled substances for legitimate medical,
scientific, research, and industrial purposes and deter the diversion
of controlled substances to illegal purposes. The CSA mandates that DEA
establish a closed system of control for manufacturing, distributing,
and dispensing controlled substances. Any person who manufactures,
distributes, dispenses, imports, exports, or conducts research or
chemical analysis with controlled substances must register with DEA
(unless exempt) and comply with the applicable requirements for the
activity. The CSA, as amended, also requires DEA to regulate the
manufacture, distribution, retail sale, import, and export of chemicals
that may be used to manufacture controlled substances illegally. Listed
chemicals that are classified as List I chemicals are important to the
manufacture of controlled substances. Those classified as List II
chemicals may be used to manufacture controlled substances.
Combat Methamphetamine Epidemic Act of 2005
On March 9, 2006, the President signed the Combat Methamphetamine
Epidemic Act of 2005 (CMEA), which is Title VII of the USA PATRIOT
Improvement and Reauthorization Act of 2005 (Pub. L. 109-177). Among
other actions, CMEA imposed new requirements regarding the retail sale
of scheduled listed chemical products (drugs containing ephedrine,
pseudoephedrine, or phenylpropanolamine, that may be marketed or
distributed lawfully in the United States under the Federal Food, Drug
and Cosmetic Act as nonprescription products) (21 U.S.C. 802(45)(A)).
In a separate rulemaking, ``Retail Sales of Scheduled Listed Chemical
Products; Self-Certification of Regulated Sellers of Scheduled Listed
Chemical Products'' [Docket No. DEA-291, RIN 1117-AB05] (71 FR 56008,
September 26, 2006; corrected at 71 FR 60609, October 13, 2006), DEA
promulgated regulations implementing these provisions (21 U.S.C.
830(d), (e); 21 CFR part 1314).
The CMEA also subjects material containing ephedrine,
pseudoephedrine, and phenylpropanolamine to manufacturing and import
restrictions. Specifically, CMEA amended section 1002 of the CSA (21
U.S.C. 952(a)(1)) by adding the List I chemicals ephedrine,
pseudoephedrine, and phenylpropanolamine to those narcotic raw
materials whose importation into the United States is prohibited except
for such amounts as the Attorney General finds to be necessary to
provide for medical, scientific, or other legitimate purposes. CMEA
also amended section 306 of the Act (21 U.S.C. 826) to establish the
total annual needs of ephedrine, pseudoephedrine, and
phenylpropanolamine 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. Individual manufacturing and procurement quotas for ephedrine,
pseudoephedrine, and phenylpropanolamine were also required to be
established for persons conducting manufacturing activities with those
chemicals. In a separate rulemaking, ``Import and Production Quotas for
Certain List I Chemicals'' [Docket No. DEA-293, RIN 1117-AB08] (72 FR
37439, July 10, 2007; Final Rule 73 FR 73549, December 3, 2008), DEA
promulgated regulations to implement these provisions (21 CFR part
1315).
Further, the CMEA requires that importers, exporters, and persons
involved in international transactions of all listed chemicals,
including ephedrine, pseudoephedrine, and phenylpropanolamine, provide
DEA with information regarding the transferee (i.e., the downstream
customer), of the chemical, as well as information regarding the
quantity of the chemical to be transferred. Importers, exporters, and
persons involved in international transactions are further required to
provide DEA with a return declaration regarding each import, export, or
international transaction after the transaction is completed (CMEA
Sec. 716, 21 U.S.C. 971(d) and (g), as amended). In a separate
rulemaking, ``Implementation of the Combat Methamphetamine Epidemic Act
of 2005; Notice of
[[Page 38916]]
Transfers Following Importation or Exportation'' [Docket No. DEA-292,
RIN 1117-AB06] (72 FR 17401, April 9, 2007; Temporary Stay of Certain
Provisions 72 FR 28601, May 22, 2007), DEA promulgated regulations
implementing these provisions (21 CFR 1313.16, 1313.17, 1313.26,
1313.27, 1313.32, 1313.35).
Finally, the CMEA requires that the notice of importation (DEA Form
486) for ephedrine, pseudoephedrine, and phenylpropanolamine ``shall
include all information known to the importer on the chain of
distribution of such chemical from the manufacturer to the importer.''
(CMEA Sec. 721, 21 U.S.C. 971(h) as amended). In a separate
rulemaking, ``Information on Foreign Chain of Distribution for
Ephedrine, Pseudoephedrine, and Phenylpropanolamine'' [Docket No. DEA-
295, RIN 1117-AB07] (73 FR 16793, March 31, 2008), DEA proposed
regulations to implement this provision.
The List I chemicals ephedrine, pseudoephedrine, and
phenylpropanolamine as single entity or combination products all serve
as precursor chemicals for the illicit manufacture of controlled
substances. Ephedrine and pseudoephedrine are the primary precursors
used in the illicit synthesis of methamphetamine, a schedule II
controlled substance, and methcathinone, a schedule I controlled
substance. Phenylpropanolamine is the primary precursor used in the
illicit synthesis of amphetamine, a schedule II controlled substance.
Licit Use
Ephedrine, pseudoephedrine, and phenylpropanolamine all have
therapeutic uses in both over-the-counter and prescription drug
products. Ephedrine is lawfully marketed under the Federal Food, Drug,
and Cosmetic Act as an ingredient in nonprescription (``over-the-
counter'' (OTC)) drugs as a bronchodilator for the treatment of asthma.
Ephedrine is also available as a nonprescription product in combination
with the active ingredient guaifenesin, which is an expectorant.
As a prescription drug, ephedrine is used in parenteral
(injectable) form in hospitals as part of anesthesiology kits.
Ephedrine has the beneficial effect of increasing blood pressure very
rapidly in the event of hypotensive crisis (i.e., sudden loss of blood
pressure sometimes experienced during surgery). Parenteral ephedrine is
also sometimes used to relieve acute bronchospasm. Oral dosage forms of
ephedrine are also available as prescription drugs for the treatment of
asthma. These prescription drug products primarily consist of ephedrine
in combination with other active ingredients such as potassium iodide
(an expectorant) and/or theophylline (a bronchospamolytic).
Pseudoephedrine is lawfully marketed under the Federal Food, Drug,
and Cosmetic Act for over-the-counter use as a decongestant.
Phenylpropanolamine has historically been marketed in the United States
for OTC use as a decongestant and diet aid and there have been many
legend (prescription) drug products that contain pseudoephedrine or
phenylpropanolamine. In the vast majority of these preparations,
pseudoephedrine or phenylpropanolamine were in combination with other
active ingredients, such as antihistamines, expectorants, and/or
antitussives.
In November 2000, the U.S. Food and Drug Administration (FDA)
issued a public health advisory concerning phenylpropanolamine and
requested that all drug companies discontinue marketing products
containing phenylpropanolamine due to risk of hemorrhagic stroke. In
response, many companies have voluntarily reformulated their products
to exclude phenylpropanolamine. Subsequently, on December 22, 2005, the
FDA published a Notice of Proposed Rulemaking (70 FR 75988) proposing
to categorize all over-the-counter nasal decongestants and weight
control drug products containing phenylpropanolamine preparations as
Category II, nonmonograph, i.e., not generally recognized as being safe
for human consumption. Most products containing phenylpropanolamine
intended for humans have been withdrawn from the market, but
phenylpropanolamine is still sold by prescription for veterinary uses.
While ephedrine and pseudoephedrine are pharmacologically different
(and have quite different therapeutic uses), they are directly
substitutable in the production of methamphetamine. This is because of
the similarity of the chemical structures of the two drugs.
Discussion of the NPRM
On November 20, 2007, DEA published a Notice of Proposed Rulemaking
(NPRM) (72 FR 65248) addressing two issues related to CMEA
implementation. First, DEA proposed to eliminate the thresholds for
distribution, importation, and exportation of pseudoephedrine and
phenylpropanolamine; the threshold for distribution, importation, and
exportation of ephedrine was eliminated previously. Limits on retail
transactions are set in the CMEA and were addressed in DEA's Interim
Rule regarding the retail provisions of the CMEA (71 FR 56008,
September 26, 2006; corrected at 71 FR 60609, October 13, 2006).
Second, DEA proposed to clarify that all distribution, importation, and
exportation transactions involving drug products containing ephedrine,
pseudoephedrine, or phenylpropanolamine are regulated transactions.
The comment period for the NPRM closed on January 22, 2008. DEA
received one comment on the NPRM.
Thresholds
Under the existing regulations (21 CFR 1310.04), the threshold for
non-retail distribution, import, export, and international transactions
of pseudoephedrine is 1 kilogram and for phenylpropanolamine, 2.5
kilograms. A single transaction or multiple transactions in a month
with a single customer that equal or exceed the threshold are
considered regulated transactions and trigger the reporting and
recordkeeping requirements of 21 CFR part 1310. If DEA has not
established a monthly threshold for a List I chemical, then all
transactions must be reported. DEA has not established a threshold for
ephedrine; thus all non-retail distribution, import, and export
transactions involving ephedrine are already subject to recordkeeping
and reporting requirements.
CMEA mandates that DEA establish the total annual need for
ephedrine, pseudoephedrine, and phenylpropanolamine to be manufactured
or imported 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 (21 U.S.C. 826). These requirements apply equally to
products containing these three List I chemicals as they do to the List
I chemicals themselves. To limit the supply of the chemicals to the
amount needed to meet the national need, CMEA requires DEA to establish
import and production quotas for all three chemicals. DEA published
regulations implementing procedures for import and production quotas
for the List I chemicals ephedrine, pseudoephedrine, and
phenylpropanolamine on July 10, 2007 (72 FR 37439; Final Rule 73 FR
73549, December 3, 2008). DEA established the 2008 assessment of annual
national needs for the List I chemicals ephedrine, pseudoephedrine, and
phenylpropanolamine on December
[[Page 38917]]
26, 2007 (72 FR 73361) and has established the assessment of annual
national needs every year thereafter.
To obtain the information needed to assess the national need and
set quotas to limit imports and production to meet that need, DEA
identified two inadequacies regarding its existing regulations. First,
persons who manufacture or import prescription drugs containing the
chemicals are not registered. In a separate rulemaking, ``Registration
Requirements for Importers and Manufacturers of Prescription Drug
Products Containing Ephedrine, Pseudoephedrine, or
Phenylpropanolamine'' [Docket No. DEA-294, RIN 1117-AB09] (73 FR 3432,
January 18, 2008), DEA proposed to revise its registration requirements
to cover manufacturers and importers of prescription drugs containing
these chemicals and will issue quotas to them although the distribution
and export of prescription drugs containing the chemicals will continue
to be exempt from DEA regulatory control.
The second inadequacy involves the thresholds that apply to
pseudoephedrine and phenylpropanolamine. To determine the annual
national need and set quotas, DEA must obtain information on all
imports and production involving the chemicals, not just those that
exceed the existing thresholds. The existing thresholds, although
relatively low, potentially allow a considerable market in the
chemicals to continue unregulated. For example, under the current 1
kilogram (2.2 pound) threshold for pseudoephedrine, a person could
import or distribute more than 2 pounds a month, or approximately 25
pounds a year, of pseudoephedrine without exceeding the threshold and
triggering DEA's controls. Assuming a conservative 50 percent
conversion of pseudoephedrine to methamphetamine, a person could
annually manufacture approximately 12.5 pounds of methamphetamine with
that total sum of sub-threshold quantities. DEA trend reporting for
2008 indicated that the national price for one pound of methamphetamine
hydrochloride (powder) ranged from as low as $5,000 per pound in the
DEA New Orleans and Washington DC Field Divisions, to as much as
$26,000 and $27,000 per pound in the DEA New York and Atlanta Field
Divisions, respectively. To further implement the CMEA, this rule seeks
to curb the availability of pseudoephedrine at the wholesale level for
illicit purposes.
Additionally, under the current 2.5 kilogram (5.5 pound) threshold
for phenylpropanolamine, a person could import or distribute more than
5 pounds a month, or approximately 66 pounds a year of
phenylpropanolamine without exceeding the threshold and triggering
DEA's controls. Assuming a conservative 50 percent conversion of
phenylpropanolamine to amphetamine, a person could annually manufacture
approximately 33 pounds of amphetamine with that total sum of sub-
threshold quantities. To the extent that amphetamine is marketed on the
street as methamphetamine, amphetamine often has a street value
comparable to methamphetamine. To further implement the CMEA, this rule
seeks to curb the availability of phenylpropanolamine at the wholesale
level for illicit purposes.
Currently, DEA is notified of all imports, exports, and
international transactions of these chemicals which exceed the
established thresholds or for which no threshold is established. DEA
does not, however, receive import, export, and international
transaction notifications for imports, exports, and international
transactions of listed chemicals less than established thresholds. If
DEA does not eliminate the threshold for imports, exports, and
international transactions of pseudoephedrine and phenylpropanolamine,
DEA will not have complete and accurate information regarding the
quantities of these chemicals imported into, and exported from, the
United States. Further, manufacturers and distributors are not required
to maintain records of distributions of listed chemicals at or below
established thresholds. Without the maintenance of these records, DEA
will not have complete and accurate information regarding the
quantities of these chemicals being distributed domestically.
Comments Regarding Removal of Thresholds for Pseudoephedrine and
Phenylpropanolamine
DEA did not receive any comments regarding the proposed removal of
thresholds for the List I chemicals pseudoephedrine and
phenylpropanolamine and therefore, is finalizing those provisions as
proposed.
Thus, to establish the controls that Congress mandated and limit
imports and production to that needed for legitimate uses, DEA is
eliminating the thresholds for all transactions involving the List I
chemicals pseudoephedrine and phenylpropanolamine. As discussed
previously, no threshold currently exists for transactions involving
the List I chemical ephedrine; thus, all transactions are regulated.
Any registrant manufacturing, distributing, importing, or exporting
pseudoephedrine or phenylpropanolamine, in any quantity, either as bulk
chemicals or in over-the-counter drug products, will be subject to the
reporting and recordkeeping requirements. Any manufacturer or importer
of prescription drug products containing one of the chemicals will also
be subject to reporting and recordkeeping requirements. Importation of
the chemicals is allowed only if it is within an import quota that the
importer has applied for and been granted by DEA. The one exception to
the import limits provided in the CMEA is that an individual may import
not more than 7.5 grams in any 30-day period of a scheduled listed
chemical product (i.e., a product containing ephedrine,
pseudoephedrine, or phenylpropanolamine which may be marketed or
distributed lawfully in the United States under the Federal Food, Drug,
and Cosmetic Act as a nonprescription drug) by means of the U.S. Postal
Service or a private or commercial carrier (21 U.S.C. 844(a)).
The distribution and export of prescription drug products
containing the chemicals are not covered because DEA will be able to
obtain the information it needs for the assessment of annual national
needs from importers and manufacturers of these products. DEA has not
determined that prescription drug products are being diverted.
Regulated Transactions
The definition of ``regulated transaction'' as amended by CMEA (21
U.S.C. 802(39)(A)(iv)) excludes:
(iv) Any transaction in a listed chemical that is contained in a
drug that may be marketed or distributed lawfully in the United States
under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.),
subject to clause (v), unless--
(I) The Attorney General has determined under section 204 of the
Act (21 U.S.C. 814) that the drug or group of drugs is being diverted
to obtain the listed chemical for use in the illicit production of a
controlled substance; and
(II) The quantity of the listed chemical contained in the drug
included in the transaction or multiple transactions equals or exceeds
the threshold established for that chemical by the Attorney General.
Section 814 (b) states that:
In removing a drug or group of drugs from exemption * * * the
Attorney General shall consider, with respect to a drug or group of
drugs that is
[[Page 38918]]
proposed to be removed from exemption--
(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.
DEA in this rule is clarifying that nonprescription (OTC) drug
products containing ephedrine, pseudoephedrine, and phenylpropanolamine
do not qualify for the exemption from the definition of ``regulated
transaction'' based on the three factors listed in 21 U.S.C. 814(b) for
the reasons discussed below.
Evaluation of Statutory Factors for Removal of Exemption From the
Definition of ``Regulated Transaction''
Note: For a more detailed discussion of DEA's analysis regarding
each factor, see the NPRM preamble (72 FR 65248, November 20, 2007).
Factor 1: Scope, Duration, and Significance of Diversion
Throughout the late 1970s, methamphetamine was illicitly produced
primarily through the use of the precursor phenylacetone (phenyl-2-
propanone (P2P)) by outlaw motorcycle gangs in the United States. In
response to the use of P2P, DEA controlled P2P as a schedule II
controlled substance in 1980, under the immediate precursor provisions
of the CSA, specifically 21 U.S.C. 811(e). Clandestine laboratory
operators responded by developing a variety of synthetic methods for
producing P2P and also migrated to the use of ephedrine as precursor
material.
In 1989, DEA control of chemicals was initiated with passage of the
Chemical Diversion and Trafficking Act of 1988 (CDTA) (Subtitle A of
Title VI of Pub. L. 100-690). This law placed recordkeeping and
reporting requirements on a wide variety of precursors and essential
chemicals used in every aspect of clandestine drug manufacture,
including bulk powder ephedrine, pseudoephedrine, and
phenylpropanolamine. In response to the regulations, traffickers moved
to the illicit use of single-entity ephedrine OTC tablets as an
unregulated source of precursor material for the production of
methamphetamine.
In the early 1990s, a number of well-publicized seizures of rogue
businesses (and prosecutions of their owners) began to impact the
tablet manufacturing industry, and a loophole allowing the sale of
single-entity ephedrine products was closed in late 1993 with the
passage of the Domestic Chemical Diversion Control Act of 1993 (DCDCA)
(Pub. L. 103-200).
In 1996, the existing controls on precursor and essential chemicals
imposed by the CDTA and DCDCA were further tightened with the passage
of the Comprehensive Methamphetamine Control Act of 1996 (MCA) (Pub. L.
104-237). What followed was a series of legislative actions on both the
Federal and State levels to tighten controls on pharmaceutical products
that serve as precursor material for clandestine methamphetamine
laboratories. At the Federal level, this effort included passage of the
Methamphetamine Anti-Proliferation Act of 2000 (MAPA) (Title XXXVI of
Pub. L. 106-310). Today, however, ephedrine and pseudoephedrine OTC
products continue to serve as the primary precursor source for the
illicit production of methamphetamine, which has spread across the
entire United States in epidemic proportions.
Current Seizures
As DEA discussed in the NPRM, methamphetamine remains the primary
drug produced in illicit laboratories within the United States. Data
from the El Paso Intelligence Center's (EPIC) Clandestine Laboratory
Database indicates that 10,022 methamphetamine laboratories were seized
in calendar year 2004, 6,021 laboratories in calendar year 2005, 3,977
laboratories in calendar year 2006, 3,097 laboratories in calendar year
2007, and 3,924 laboratories in calendar year 2008 (as reported to EPIC
through November 27, 2009). According to EPIC, from January 1, 2000,
through December 31, 2008, there were at least 7,385 laboratories
reportedly using ephedrine and 51,102 reportedly using pseudoephedrine
as precursor material for methamphetamine production. Additionally EPIC
reports the seizure of 48 amphetamine laboratories (using
phenylpropanolamine) during the same period. The vast majority of these
laboratories used pharmaceutical products containing pseudoephedrine,
ephedrine, and phenylpropanolamine as the source of precursor material.
Illicit Uses
Factor 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
Factor 3: Whether the Listed Chemical Can Be Readily Recovered From the
Drug or Group of Drugs
As DEA discussed in the NPRM, the production of methamphetamine
from ephedrine or pseudoephedrine can be accomplished via a series of
reactions using widely available ``recipes'' and can be accomplished
with little or no chemistry expertise. A variety of different methods
exist to convert the precursor material to methamphetamine. If very
small batches are made, there is not even a requirement to heat the
reactants. For example, quantities of ephedrine or pseudoephedrine,
iodine, and red phosphorous can be reacted with the addition of water
and small quantities of methamphetamine can be produced. For larger
batches the reactants are combined and heated for several hours. A
variety of different reagents can be used to make the conversion to
methamphetamine if the precursors ephedrine and pseudoephedrine are
obtained. These reactants can also be used to convert
phenylpropanolamine to amphetamine. Manufacturing procedures are
readily available on the Internet and even unskilled persons can obtain
a 50-70 percent yield of methamphetamine or amphetamine.
Pseudoephedrine and ephedrine can also serve as precursor material
for the manufacture of the schedule I controlled substance
methcathinone. From January 1, 2000, through December 31, 2008, there
were 202 methcathinone laboratory seizures reported to EPIC.
As DEA discussed in the NPRM, there is a common misconception in
industry and among some in the public that OTC drug products,
particularly pseudoephedrine or ephedrine products in combination with
other medically active ingredients (``combo products''), are somehow
less likely to be diverted or are less desirable among clandestine
laboratory operators for the manufacture of methamphetamine. This is
not the case.
Most of the clandestine laboratories found in the United States are
using tablets, either single-entity or combination. In many of the
methamphetamine exhibits analyzed by DEA analytical laboratories, the
presence of antihistamines is detected, indicating that combination
products were used in the reactions.
While the vast majority of clandestine laboratories seized have
used tableted pseudoephedrine and ephedrine products, gel caps and
liquid dosage form products can easily serve as the source of precursor
material for the production of methamphetamine. DEA
[[Page 38919]]
scientific studies show that liquid, gel cap, and combination products
are easily used as the source of precursor material and the
pseudoephedrine/ephedrine from these products can be easily extracted
with appropriate reagents/solvents. These reagents/solvents are all
readily available at hardware and auto parts stores in the United
States.
The controlled substances produced from these chemicals,
methamphetamine and amphetamine, have a high abuse potential. The
public health consequences of the manufacture, trafficking, and abuse
of these two substances are well known and documented.
Comments Regarding Clarification of Regulated Transactions
In response to the November 20, 2007, NPRM (72 FR 65248), DEA
received one comment. The commenter expressed concerns regarding the
findings made by DEA that concluded that OTC products containing either
pseudoephedrine or ephedrine (in combination with other active
ingredients) are (1) Easily used in the illicit production of a
controlled substance (e.g. methamphetamine) and (2) the listed chemical
can be readily recovered. The commenter further expressed concerns
regarding the applicability of these findings to combination products
in the form of liquids, gel caps and solid dosage forms. The commenter
expressed concerns that the NPRM did not provide sufficient data to
substantiate DEA's findings, including OTC combination product seizures
and evidence of diversion of such materials. Additionally, the
commenter asserted that ephedrine/guaifenesin combination products
warrant special treatment and should not be subject to the proposed
rulemaking.
DEA disagrees with the commenter's basic premise that ephedrine and
pseudoephedrine combination products (in liquid, soft-gel capsule, and
solid dosage form) have less utility in clandestine laboratory
processing of methamphetamine. DEA laboratory extraction studies have
scientifically demonstrated that such materials are easily used as
precursor material in the production of methamphetamine. Additionally,
such materials have been identified at seized clandestine
methamphetamine laboratories, and contaminants identified in seized
methamphetamine exhibits document the use of such products as precursor
material. These data demonstrate that these materials are (1) easily
used in the illicit production of methamphetamine and (2) the listed
chemical can be readily recovered. This has been documented in both DEA
laboratory studies and in actual seizures.
Use of OTC Combination Products as Precursor Material
DEA's Office of Forensic Sciences has performed extraction studies
demonstrating that combination OTC pseudoephedrine/ephedrine products
(in soft-gel capsules, liquids, and solid forms, and containing
combination ingredients) can be readily extracted and utilized as the
source of precursor material for production of methamphetamine. These
studies illustrated that such extractions were readily achievable and
precursor materials were readily extractible.
Furthermore, the DEA Special Testing and Research Laboratory
conducts in-depth analyses of seized methamphetamine samples. The
information obtained from these analyses is derived from samples
obtained and analyzed from a selective sampling of domestic and foreign
seizures, and is not necessarily representative of all methamphetamine
samples submitted to the DEA laboratory system. Among other things, the
in-depth analytical procedures enable analysts to determine when
combination OTC ephedrine and/or pseudoephedrine products are used as
the source of precursor chemicals, due to impurities present in seized
methamphetamine. The crude isolation procedures used in clandestine
methamphetamine laboratories to extract l-ephedrine or d-
pseudoephedrine from OTC products usually co-extract some of the other
active ingredients commonly found in combination products. As a result,
methamphetamine samples often contain one or more of the following co-
ingredients: brompheniramine, chlorpheniramine, triprolidine,
loratadine, carbinoxamine, and other common co-ingredients or their
respective reaction by-products. Between Calendar Year 2005 and
Calendar Year 2007, combination ephedrine and pseudoephedrine products
were utilized as precursor material in 760 out of 1343 samples
analyzed. For the reporting period ending July 2009, 78 out of 145
additional methamphetamine samples analyzed contained these co-
ingredients, therefore illustrating that 54 percent of these samples
were made using combination ephedrine or pseudoephedrine products.
Additionally, DEA's System to Retrieve Information on Drug Evidence
(STRIDE) indicates that such products have been utilized as precursor
material in the manufacture of methamphetamine. For the period January
2004 through November 2009, approximately 725 methamphetamine exhibits
analyzed by DEA laboratories contained the common OTC combination
product ingredients chlorpheniramine, diphenhydramine, guaifenesin or
triprolidine. The number of guaifenesin exhibits accounted for
approximately 5 percent of these samples. For the period January 2004
through November 2009, approximately 299 additional exhibits were
identified as containing ephedrine and/or pseudoephedrine in
combination with guaifenesin.
Based upon DEA scientific extraction studies, actual seizures of
OTC ephedrine and/or pseudoephedrine combination products (including
gel capsules, liquids and tablets) and the analysis of seized
methamphetamine containing co-ingredients commonly found in OTC
products, DEA finds that such materials are (1) Easily used in the
illicit production of a controlled substance (e.g., methamphetamine)
and (2) the listed chemical can be readily recovered. DEA therefore
finds that these sources of precursor material should be subject to
regulatory controls under the CSA.
Findings
Therefore, based on the above discussion, the Administrator of the
Drug Enforcement Administration, under the authority delegated by the
Attorney General, finds, after considering the factors specified in 21
U.S.C. 814(b), that drug products containing the List I chemicals
ephedrine, pseudoephedrine, and phenylpropanolamine are being diverted
for the illicit production of controlled substances, namely
methamphetamine and amphetamine. As DEA has discussed, these products
have a demonstrated history over the past 20 years of diversion for
illicit purposes. These List I chemicals are diverted regardless of
formulation--liquid, nonliquid, gel capsule--and regardless of dosage
strength. Accordingly, the Administrator of the Drug Enforcement
Administration removes drug products containing the List I chemicals
ephedrine, pseudoephedrine, and phenylpropanolamine from exemption from
the definition of ``regulated transaction'' under 21 U.S.C.
802(39)(a)(iv). As such, unless otherwise exempted, such materials are
subject to the chemical regulatory control provisions of the CSA. DEA
is adding a new section 1310.14 that removes these drugs from the
exemption.
[[Page 38920]]
The CSA has specifically exempted retail transactions involving
scheduled listed chemical products from the definition of regulated
transaction (21 U.S.C. 802(39)(a)(v)) and established a separate set of
regulations, 21 CFR part 1314, that control those retail transactions
(71 FR 56008, September 26, 2006; corrected at 71 FR 60609, October 13,
2006).
Technical Correction
While drafting this rulemaking, DEA became aware of an inaccurate
citation in 21 CFR 1310.10, the section paralleling the criteria to be
considered in evaluating the statutory factors for removal of exemption
from the definition of ``regulated transaction'' at 21 U.S.C. 814 and
discussed above. Specifically, the definition of ``regulated
transaction'' cited in 21 CFR 1310.10 is inaccurate. Therefore, to
alleviate any confusion, DEA is correcting this citation.
Regulatory Certifications
Regulatory Flexibility Act
The Deputy Administrator hereby certifies that this rulemaking has
been drafted in accordance with the provisions of the Regulatory
Flexibility Act (RFA) (5 U.S.C. 601-612). Without this rule, DEA would
not be able to effectively implement the quota and import provisions of
CMEA.
As DEA has demonstrated throughout this document, traffickers and
others in search of the chemicals necessary for clandestine manufacture
of methamphetamine and amphetamine, are actively looking to exploit any
loophole in chemical controls.
DEA notes that the effect of eliminating the thresholds for
pseudoephedrine and phenylpropanolamine could impose a minimal burden
on regulated entities. Although it is likely that many of the
registrants who handle the two chemicals are small businesses under the
Small Business Administration definition of small entities, the changes
impose virtually no burden on these entities for three reasons. First,
most, if not all, legitimate transactions at the import, export,
manufacturing, and distribution level are in excess of the previous
thresholds. Second, although it is possible that some registrants may
have some transactions that will be newly regulated, the recordkeeping
for these can be met with standard business records. The only
information required in records for regulated transactions is the name
and address of the seller and purchaser (plus their DEA registration
numbers, if applicable); the date of the transaction; the name,
quantity, and form of packaging of the listed chemical; the method of
transfer; and the method of identification used by the customer and any
unique identification number associated with the identification. This
information is normally included on purchase orders or invoices and the
shipping papers and is needed to complete and track the transaction. As
long as the purchaser can extract the records for examination, if
necessary, no additional effort is needed. Because almost all business
records for manufacturers, importers, and distributors are now
generated and transmitted electronically, DEA does not expect that any
registrant will need additional recordkeeping.
Third, if any person is importing or exporting in very small
quantities, there may be some additional import/export declarations
required, but these forms require less than half an hour to complete
and file. The only other requirement is to report suspicious
transactions. These reports also require less than a half hour to
complete and file.
As noted above, DEA does not believe that legitimate importers or
exporters are handling such small quantities. The purpose of this rule
is to close a loophole that could be exploited by those seeking the
chemicals for illicit purposes and to ensure that DEA can accurately
assess the legitimate need. The Deputy Administrator, therefore,
certifies that the rule will not have a significant economic impact on
a substantial number of small entities.
Executive Order 12866
The Deputy Administrator further certifies that this rulemaking has
been drafted in accordance with the principles in Executive Order 12866
section 1(b). It has been determined that this is ``a significant
regulatory action.'' Therefore, this action has been reviewed by the
Office of Management and Budget. This rule supports implementation of
provisions of the CMEA. The CMEA is expansive in its breadth,
essentially reclassifying ephedrine, pseudoephedrine, and
phenylpropanolamine as schedule II controlled substances for purposes
of importation and production, imposes new retail restrictions on these
products, and mandates new domestic and import quotas. Without this
rule, traffickers could exploit below-threshold transactions, which are
not reported to DEA and for which records are not required to be
maintained, to divert valuable quantities of pseudoephedrine and
phenylpropanolamine for the clandestine manufacture of methamphetamine
and/or amphetamine. Further, without this rule, DEA will not have
complete information on which to base its assessment of the annual
national needs for the List I chemicals ephedrine, pseudoephedrine, and
phenylpropanolamine as DEA does not receive information regarding
below-threshold transactions. This lack of information would create a
loophole in the quota system, and would prevent DEA from fulfilling its
legislative mandate that imports of pseudoephedrine and
phenylpropanolamine be prohibited except for medical, scientific, or
other legitimate purposes. Without this rule, DEA will not be able to
effectively and fully implement the quota and import provisions of the
CMEA.
As discussed above, DEA does not anticipate that this change will
impose more than the minimal costs that would be associated with
reporting transactions that the registrant thought suspicious and
possibly filing forms for import and export notifications. The benefits
of the rule are those associated with controlling access to chemicals
used to manufacture methamphetamine, and other controlled substances,
illicitly. As has been discussed extensively throughout this document,
traffickers and others are actively looking to exploit any loophole in
chemical controls to continue their operations. As noted previously,
the current thresholds could permit a person to divert approximately 25
pounds of pseudoephedrine and 66 pounds of phenylpropanolamine
annually, without exceeding existing thresholds. This rule closes a
loophole that could result in the undocumented diversion of these
chemicals for illicit production of significant quantities of
methamphetamine and/or amphetamine. As noted previously in this rule,
below-threshold transactions are not documented to DEA; the diversion
of below-threshold quantities of these precursor chemicals could result
in the illicit production of significant quantities of methamphetamine
and/or amphetamine.
Executive Order 12988
This regulation meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of Executive Order, 12988 Civil Justice
Reform.
Executive Order 13132
This rulemaking does not impose enforcement responsibilities on any
State; nor does it diminish the power of
[[Page 38921]]
any State to enforce its own laws. Accordingly, this rulemaking does
not have federalism implications warranting the application of
Executive Order 13132.
Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by State, local, and
Tribal governments, in the aggregate, or by the private sector, of
$120,000,000 or more (adjusted for inflation) in any one year, and will
not significantly or uniquely affect small governments. Therefore, no
actions were deemed necessary under the provisions of the Unfunded
Mandates Reform Act of 1995.
Congressional Review Act
This rule is not a major rule as defined by section 804 of the
Small Business Regulatory Enforcement Fairness Act of 1996
(Congressional Review Act). This rule will not result in an annual
effect on the economy of $100,000,000 or more; a major increase in
costs or prices; or significant adverse effects on competition,
employment, investment, productivity, innovation, or on the ability of
United States-based companies to compete with foreign-based companies
in domestic and export markets.
Paperwork Reduction Act
This rule requires that records be maintained regarding
distributions of the List I chemicals pseudoephedrine and
phenylpropanolamine. These records are maintained as a normal course of
business.
The rule also reduces the thresholds for the List I chemicals
pseudoephedrine and phenylpropanolamine from 1 kilogram and 2.5
kilograms, respectively, to zero, thereby requiring that DEA receive
advance notification of all importations and exportations of these List
I chemicals. DEA notes that it already receives some Import/Export
Declarations if the cumulative amount of the transactions exceeds the
thresholds on a monthly basis. Therefore, DEA does not believe that
this change will significantly increase the burden associated with this
information collection. Specifically, DEA estimates that 53 additional
export notifications and 53 additional export return declarations will
be received annually. Further, DEA estimates that 50 additional import
declarations and 55 additional import return declarations will be
received annually. DEA assumes 10 percent of all imports will not be
transferred in the first thirty days and will necessitate submission of
a subsequent return declaration. The receipt of these additional forms
increases the hour burden by 55 hours annually. DEA did not receive any
comments regarding the Paperwork Reduction Act aspects of the Notice of
Proposed Rulemaking. Therefore, DEA is revising its existing
information collection [OMB approval number 1117-0023 ``Import/Export
Declaration for List I and List II Chemicals'', DEA Form 486] to
reflect the increased burden associated with receipt of these import/
export declarations.
The Department of Justice, Drug Enforcement Administration,
submitted the following information collection request to the Office of
Management and Budget for review and clearance in accordance with
review procedures of the Paperwork Reduction Act of 1995. The proposed
information collections were published in the NPRM to obtain comments
from the public and affected agencies
Overview of Information Collection 1117-0023
(1) Type of Information Collection: Revision of a Currently
Approved Collection.
(2) Title of the Form/Collection: Import/Export Declaration for
List I and List II Chemicals.
(3) Agency form number, if any, and the applicable component of the
Department sponsoring the collection:
Form number: DEA Form 486 and DEA Form 486A.
Component: Office of Diversion Control, Drug Enforcement
Administration, U.S. Department of Justice
(4) Affected public who will be asked or required to respond, as
well as a brief abstract:
Primary: Business or other for-profit.
Other: None.
Abstract: Persons importing, exporting, and conducting
international transactions with List I and List II chemicals must
notify DEA of those transactions in advance of their occurrence,
including information regarding the person(s) to whom the chemical will
be transferred and the quantity to be transferred. Persons must also
provide return declarations, confirming the date of the importation,
exportation, or international transaction and transfer, and the amounts
of the chemical transferred. For the List I chemicals ephedrine,
pseudoephedrine, and phenylpropanolamine, importers must report all
information known to them on the chain of distribution of the chemical
from the foreign manufacturer to the United States importer. This
information is used to prevent shipments not intended for legitimate
purposes.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: A respondent
may submit multiple responses. The table below presents information
regarding the number of respondents, responses, and associated burden
hours.
----------------------------------------------------------------------------------------------------------------
Number of Number of Average time per
respondents responses response Total
----------------------------------------------------------------------------------------------------------------
Form 486 (export)................. 193 10,380 0.283 hour (17 2,941 hours.
minutes).
Form 486 (export Return 193 10,380 0.166 hour (10 1,730 hours.
Declaration). minutes).
Form 486 (import)................. 120 1,268 0.333 hour (20 422.6 hours.
minutes).
Form 486 (import return 120 1,395 0.2 hour (12 minutes) 279 hours.
declaration) *.
Form 486A (import) *.............. 30 400 0.4 hour (24 minutes) 160 hours.
Form 486A (import return 30 440 0.2 hour (12 minutes) 88 hours.
declaration)*.
Form 486 (international 14 14 0.2 hour (12 minutes) 2.8 hours.
transaction).
Form 486 (international 14 14 0.08 hour (5 minutes) 1.2 hours.
transaction return declaration).
Quarterly reports for imports of 110 440 0.5 hour (30 minutes) 220 hours.
acetone, 2-butanone, and toluene.
-----------------------------------------------------------------------------
Total......................... 193 ........... ..................... 5,844.6 hours.
----------------------------------------------------------------------------------------------------------------
* DEA assumes 10 percent of all imports will not be transferred in the first 30 days and will necessitate
submission of a subsequent return declaration.
[[Page 38922]]
(6) An estimate of the total public burden (in hours) associated
with the collection: 5,845 annual burden hours.
If additional information is required, contact: Lynn Bryant,
Department Clearance Officer, United States Department of Justice,
Justice Management Division, Policy and Planning Staff, Patrick Henry
Building, Suite 1600, 601 D Street, NW., Washington, DC 20530.
List of Subjects in 21 CFR Part 1310
Drug traffic control, Exports, Imports, Reporting and recordkeeping
requirements.
0
For the reasons set forth above, 21 CFR part 1310 is amended as
follows:
PART 1310--RECORDS AND REPORTS OF LISTED CHEMICALS AND CERTAIN
MACHINES
0
1. The authority citation for part 1310 continues to read as follows:
Authority: 21 U.S.C. 802, 827(h), 830, 871(b), 890.
0
2. Section 1310.04 is amended by revising paragraphs (f)(1)(i) table
and (ii), (g)(1)(i) through (vii), and adding paragraphs (g)(1)(viii)
and (ix) to read as follows:
Sec. 1310.04 Maintenance of records.
* * * * *
(f) * * *
(1) * * *
(i) * * *
------------------------------------------------------------------------
Threshold by
Code Chemical base weight
------------------------------------------------------------------------
8522.......................... N-Acetylanthranilic 40 kilograms.
acid, its esters, and
its salts.
8530.......................... Anthranilic acid, its 30 kilograms.
esters, and its salts.
8256.......................... Benzaldehyde.......... 4 kilograms.
8735.......................... Benzyl cyanide........ 1 kilogram.
8675.......................... Ergonovine and its 10 grams.
salts.
8676.......................... Ergotamine and its 20 grams.
salts.
8678.......................... Ethylamine and its 1 kilogram.
salts.
6695.......................... Hydriodic acid........ 1.7 kilograms
(or 1 liter by
volume).
8704.......................... Isosafrole............ 4 kilograms.
8520.......................... Methylamine and its 1 kilogram.
salts.
8502.......................... 3,4-Methylenedioxyphen 4 kilograms.
yl-2-propanone.
8115.......................... N-Methylephedrine, its 1 kilogram.
salts, optical
isomers, and salts of
optical isomers.
8119.......................... N-Methylpseudoephedrin 1 kilogram.
e, its salts, optical
isomers, and salts of
optical isomers.
6724.......................... Nitroethane........... 2.5 kilograms.
8317.......................... Norpseudoephedrine, 2.5 kilograms.
its salts, optical
isomers, and salts of
optical isomers.
8791.......................... Phenylacetic acid, its 1 kilogram.
esters, and its salts.
2704.......................... Piperidine and its 500 grams.
salts.
8750.......................... Piperonal (also called 4 kilograms.
heliotropine).
8328.......................... Propionic anhydride... 1 gram.
8323.......................... Safrole............... 4 kilograms.
------------------------------------------------------------------------
(ii) For List I chemicals that are contained in scheduled listed
chemical products as defined in Sec. 1300.02(b)(34)(i) of this
chapter, the thresholds established in paragraph (g) of this section
apply only to non-retail distribution, import, and export. Sales of
these products at retail are subject to the requirements of part 1314
of this chapter.
* * * * *
(g) * * *
(1) * * *
(i) Ephedrine, its salts, optical isomers, and salts of optical
isomers;
(ii) Gamma-Butyrolactone (Other names include: GBL; Dihydro-2(3H)-
furanone; 1,2-Butanolide; 1,4-Butanolide; 4-Hydroxybutanoic acid
lactone; gamma-hydroxybutyric acid lactone)
(iii) Hypophosphorous acid and its salts (including ammonium
hypophosphite, calcium hypophosphite, iron hypophosphite, potassium
hypophosphite, manganese hypophosphite, magnesium hypophosphite, and
sodium hypophosphite)
(iv) Iodine
(v) N-phenethyl-4-piperidone (NPP)
(vi) Pseudoephedrine, its salts, optical isomers, and salts of
optical isomers
(vii) Phenylpropanolamine, its salts, optical isomers, and salts of
optical isomers
(viii) Red phosphorus
(ix) White phosphorus (Other names: Yellow Phosphorus)
* * * * *
0
3. Section 1310.10 is amended by revising paragraph (a) introductory
text to read as follows:
Sec. 1310.10 Removal of the exemption of drugs distributed under the
Food, Drug and Cosmetic Act.
(a) The Administrator may remove from exemption under Sec.
1300.02(b)(28)(i)(D) of this chapter any drug or group of drugs that
the Administrator finds is being diverted to obtain a listed chemical
for use in the illicit production of a controlled substance. In
removing a drug or group of drugs from the exemption the Administrator
shall consider:
* * * * *
0
4. Section 1310.14 is added to read as follows:
Sec. 1310.14 Removal of exemption from definition of regulated
transaction.
The Administrator finds that the following drugs or groups of drugs
are being diverted to obtain a listed chemical for use in the illicit
production of a controlled substance and removes the drugs or groups of
drugs from exemption under Sec. 1300.02(b)(28)(i)(D) of this chapter
pursuant to the criteria listed in Sec. 1310.10 of this part:
(a) Nonprescription drugs containing ephedrine, its salts, optical
isomers, and salts of optical isomers.
(b) Nonprescription drugs containing phenylpropanolamine, its
salts, optical isomers, and salts of optical isomers.
(c) Nonprescription drugs containing pseudoephedrine, its salts,
optical isomers, and salts of optical isomers.
Dated: June 19, 2010.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 2010-16388 Filed 7-6-10; 8:45 am]
BILLING CODE 4410-09-P