[Federal Register Volume 68, Number 212 (Monday, November 3, 2003)]
[Proposed Rules]
[Pages 62255-62259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27511]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 68, No. 212 / Monday, November 3, 2003 / 
Proposed Rules  

[[Page 62255]]



DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Parts 1300, 1301, 1304, and 1307

[Docket No. DEA-240P]
RIN 1117-AA75


Preventing the Accumulation of Surplus Controlled Substances at 
Long Term Care Facilities

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: Because long term care facilities (LTCFs) generally do not 
have pharmacies on site and are not registered with DEA, they typically 
receive controlled substances prescribed for specific patients in 30 
day supplies, although smaller supplies are sometimes used. As patients 
leave or their medication needs to be changed, the LTCFs accumulate 
stocks of excess controlled substances. The excess stocks can result in 
significant problems with waste and disposal and present opportunities 
for diversion of controlled substances. DEA is proposing changes to its 
existing regulations to allow, where State laws permit, for pharmacy 
installation of automated dispensing systems (ADSs) at LTCFs. Automated 
dispensing systems would allow dispensing of single dosage units and 
mitigate the problem of excess stocks and disposal.

DATES: Written comments must be postmarked on or before January 2, 
2004.

ADDRESSES: Comments should be submitted to the Deputy Assistant 
Administrator, Office of Diversion Control, Drug Enforcement 
Administration, Washington, DC 20537, Attention: Federal Register 
Representative/CCR.

FOR FURTHER INFORMATION CONTACT: Patricia M. Good, Chief, Liaison and 
Policy Section, Office of Diversion Control, Drug Enforcement 
Administration, Washington, DC 20537, Telephone (202) 307-7297.

SUPPLEMENTARY INFORMATION:

I. Background

Legal Authority

    DEA enforces the Controlled Substances Act (CSA) (21 U.S.C. 801 et 
seq.), as amended. DEA regulations implementing this statute are 
published in Title 21 of the Code of Federal Regulations (CFR), Part 
1300 to end. These regulations are designed to establish a framework 
for the legal distribution of controlled substances to deter their 
diversion to illegal purposes and to ensure that there is a sufficient 
supply of these drugs for legitimate medical purposes. Controlled 
substances are those substances listed in the schedules of the CSA and 
21 CFR 1308.11-1308.15, and generally include narcotics, stimulants, 
depressants, hallucinogens, and anabolic steroids that have a high 
potential for abuse and dependency. DEA's regulations require that 
persons involved in the manufacture, distribution, research, 
dispensing, import, and export of controlled substances register with 
DEA, keep track of all stocks of controlled substances, and maintain 
records to account for all controlled substances received, distributed, 
or otherwise disposed of.

Controlled Substances at Long Term Care Facilities (LTCFs)

    Patients at LTCFs receive numerous medications, including 
controlled substances. Unlike hospitals, LTCFs are rarely DEA 
registrants. Patients at these facilities are usually seen by their 
personal physicians, who prescribe any necessary medication. These 
prescriptions are filled by retail pharmacies and delivered to the 
LTCFs for patients' use. Because LTCFs are not registrants and 
generally do not have physicians or pharmacists on staff, they may not 
order and maintain stocks of controlled substances to be dispensed 
under the order of a practitioner as occurs in hospitals. Instead, the 
LTCF holds the controlled substance medications that are dispensed by 
prescription to the specific patients by a provider pharmacy in a 
custodial manner for administration to the patient. Any controlled 
substance medications that are not ultimately administered to the 
individual specific patient are waste that must be disposed of. 
Although DEA permits pharmacies to dispense a prescription for a LTCF 
patient on a daily or dosage unit basis rather than dispense the entire 
quantity prescribed, reimbursement rules under Medicare and Medicaid 
and other third party payors make daily dispensing financially 
unattractive for pharmacies; pharmacies are allowed a limited number of 
dispensing fees plus the calculated cost of the medication per month. 
As a consequence, pharmacies routinely dispense the entire prescription 
to the patient at once.
    A result of this dispensing practice is that when patients leave 
the facility or their medications change, the LTCF is left with excess 
controlled substances, which must be disposed of to avoid diversion. 
Because they are not registrants, the LTCFs may not transfer the 
substances to either the pharmacy that supplied them or to a reverse 
distributor for disposal. The LTCF must dispose of the excess 
controlled substances directly.

Previous DEA Actions

    DEA has frequently been asked to assist in resolving this matter. 
The principal concern has been to prevent the accumulation of 
controlled substances that are dispensed but not administered to the 
patient. DEA has attempted to address this problem through the 
establishment of partial dispensing provisions for Schedules II-V 
prescriptions (including unit-dose dispensing, if desired), to limit 
the quantity of controlled substances dispensed at one time and avoid 
waste if the treatment was changed or discontinued. According to the 
pharmacy industry, however, dispensing fees, reimbursement practices, 
and difficulties in educating practitioners regarding the need to 
prescribe controlled substances in anticipation of a patient's actual 
need for the controlled substance have, for the most part, precluded 
using that approach.

Current DEA Regulations

    Although most LTCFs are not registered with DEA, DEA regulations 
allow a LTCF to register, if licensed by its State to handle controlled 
substances. DEA issues a registration in one of the following 
categories based upon the type of license/permit issued

[[Page 62256]]

by a State and the authorized activities associated with the license/
permit:
    [sbull] Retail pharmacy--A pharmacy located on-site at the LTCF 
maintains stocks of controlled substances and a pharmacist dispenses 
patient-specific controlled substances to residents of the LTCF who 
have prescriptions for the substances.
    [sbull] Hospital/clinic--The LTCF maintains institutional stocks of 
controlled substances for dispensing by a pharmacist for administration 
to residents under medication orders from a practitioner.
    [sbull] Mid-Level Practitioner--Controlled substance activities are 
limited to those authorized by the individual State.
    [sbull] Practitioner--An individual practitioner, such as the 
Medical Director of the LTCF, registers at the site of the LTCF and is 
responsible for the handling of controlled substances utilized at the 
LTCF.

Request for Information

    On April 25, 2001, DEA published a notice in the Federal Register 
(66 FR 20833) soliciting comments and suggestions on the problem of 
excess controlled substances at LTCFs. Almost two dozen comments were 
received from a range of organizations and individuals, including State 
agencies, automated dispensing system (ADS) manufacturers, trade 
associations, and pharmaceutical providers. Information received in 
response to that notice is discussed below.

II. Discussion of the Proposed Rule

DEA's Proposal

    To further address the issue of excess controlled substances in 
LTCFs, DEA is proposing to allow a provider pharmacy to register at the 
site of the LTCF and store controlled substances in an ADS. An ADS is 
conceptually similar to a vending machine. A pharmacy stores bulk drugs 
in the ADS in separate bins or containers and programs and controls the 
ADS remotely. Only authorized staff at the LTCF would have access to 
its contents, which are dispensed on a single-dose basis at the time of 
administration pursuant to a prescription. The ADS electronically 
records each dispensing, thus maintaining dispensing records for the 
pharmacy. Because the drugs would not be considered dispensed until the 
system provided them, drugs in the ADS would be pharmacy stock, not 
waste.
    Specifically, DEA is proposing the definition of ``automated 
dispensing system'' as follows: ``a mechanical system that performs 
operations or activities, other than compounding or administration, 
relative to the storage, packaging, counting, labeling, and dispensing 
of medications, and which collects, controls, and maintains all 
transaction information.''
    The key elements of an automated dispensing system would be the 
following:
    [sbull] State authorization for pharmacies to locate stock in the 
automated dispensing systems at the LTCF.
    [sbull] Establishment through State regulation of the necessary and 
appropriate policies and protocols with respect to access to pharmacy 
stock by LTCF nursing personnel, ensuring secure storage of the 
controlled substances, transfer of the controlled substances from the 
primary pharmacy location to the LTCF site, and related issues.
    [sbull] Issuance of a DEA registration to the provider pharmacy at 
the LTCF as a separate location, based on its current DEA registration 
and without additional application fees.
    DEA is proposing to allow the use of automated dispensing systems 
as an option, not a requirement. DEA recognizes that there are reasons 
why ADSs may not work in many circumstances, but believes that some 
LTCFs will find ADSs a viable solution for preventing accumulation of 
excess controlled substances. This technology has a number of 
advantages, including the following:
    [sbull] It can substantially reduce controlled substance waste, 
thereby providing significant cost savings to purchasers of controlled 
substances. It also can significantly reduce the time and other costs 
associated with maintaining patient medication stocks and disposal of 
excess stocks for LTCFs.
    [sbull] With single-dose dispensing, secure storage, and controlled 
access, it can help to control drug inventory and increase 
accountability.
    [sbull] With an increasing amount of controlled substances in use 
as the LTCF population grows, it can help control the opportunities for 
drug diversion.
    [sbull] It recognizes advancements made in technology and provides 
the option of using the most current technology in a broader array of 
circumstances.
    [sbull] With the current pharmacist shortage, it relieves 
dispensing pharmacists of a number of manual steps involved in drug 
handling.
    [sbull] For consulting pharmacists in their responsibilities for 
drug regimen review, it provides enhanced tools with a full range of 
accurate data available online because the data are captured 
automatically.

III. Use of Automated Dispensing Systems

Existing State Laws and Regulations

    To implement this solution, States would need to grant approval 
(i.e., a license, permit, or other authorization) for the provider 
pharmacy to function at the location of the LTCF using an ADS, and 
establish policies and procedures regarding system security, access, 
and the like. States could define such an operation so as to avoid the 
many peripheral requirements of traditional pharmacies such as sinks, 
reference books, etc.

Other Options DEA Considered

    As solicited by the April 25, 2001, request for information, one 
commenter suggested that LTCFs should be able to obtain a limited 
registration for purposes of contracting with reverse distributors for 
waste disposal. DEA believes that, while this option has merit on the 
issue of disposal, it does not address control of waste and it 
potentially imposes additional disposal costs on LTCFs. Further, LTCFs 
would need state authorization to handle controlled substances in the 
manner envisioned here before DEA could issue them a DEA registration. 
In addition, LTCFs would be required to comply with DEA recordkeeping 
and reporting requirements.
    Another suggestion was to address directly the problem of excess 
medications being sent to facilities in the first place. Specifically, 
the commenter suggested that practitioners' routine medication orders 
not be sent to the LTCF unless actually necessitated by the patient. A 
related suggestion was to change reimbursement standards that are, at 
least in part, responsible for the current situation. Unfortunately, 
these are not issues that DEA is empowered to address.
    Yet another suggestion was to authorize limited permit pharmacies 
at LTCFs 2-3 days per week. It is unclear to DEA how this option of a 
``part-time'' pharmacy resolves the current problems.
    Finally, there were various suggestions about a pharmacy 
maintaining controlled substances as floor stock at LTCFs as an 
alternative to an ADS. DEA notes that this option would still require 
someone to be registered at the LTCF (either the pharmacy or the LTCF 
itself). The significant concern with this option is the need to 
maintain accountability and security for the controlled substances, 
which DEA believes is much easier to do with an ADS.

[[Page 62257]]

    DEA is not opposed to making other options available to LTCFs and 
pharmacies, as long as they address the problems discussed in this 
proposal, maintain strict levels of security and accountability, and 
comply with Federal and State regulatory requirements.

Other Comments on the April 25, 2001 Notice

    A number of commenters, including current ADS users, supported the 
option of using ADSs for controlled substances at LTCFs, believing they 
can reduce waste and disposal problems, eliminate opportunities for 
medication errors, improve patient care, and/or reduce diversion of 
controlled substances.
    A number of commenters also suggested this was not a good idea, 
citing primarily one or more of the following reasons:
    [sbull] ADSs are expensive to finance and maintain.
    [sbull] State laws and regulations will need to be changed.
    [sbull] Registration at each location would be burdensome and 
expensive.
    [sbull] The logistics associated with use and maintenance of the 
systems are complicated.
    [sbull] There are substantial security concerns. Commenters 
provided examples of where security issues (e.g., diversion, 
misdispensing) have arisen.
    [sbull] ADSs do not represent a total solution to waste/disposal 
problems.
    Several of these concerns are addressed elsewhere in this preamble. 
To the extent DEA does not specifically address some of these issues, 
DEA would reiterate that it recognizes this option will not work in all 
situations. However, DEA believes that ADS systems should be an option 
to be used where it does make sense and is otherwise permissible.

Medication Delivery Systems Currently Used by LTCFs

    DEA is not suggesting that unit-dose delivery systems or other 
medication delivery systems that most LTCFs use be replaced. DEA 
recognizes that the cost of an automated dispensing system as well as 
other requirements associated with its use at a LTCF may not be 
warranted in many cases. Therefore, the use of an automated dispensing 
system for storage and dispensing of controlled substances to residents 
of LTCFs would be an option available to the provider pharmacy.

Specific Proposed Regulatory Changes

    Current Federal law does not prohibit the use of ADSs for storage 
and dispensing of controlled substances at LTCFs where the LTCF itself 
is a DEA registrant. However, to successfully implement the approach 
being proposed here requires several regulatory revisions:
    [sbull] Section 1300.01 would be modified to include a definition 
of automated dispensing system.
    [sbull] Section 1301.17 would be modified to incorporate an 
additional ``special procedure'' for the type of registrations that are 
the subject of this notice. Specifically, retail pharmacies applying 
for a separate registration to operate an ADS at a LTCF will need to 
provide as part of their registration application an affidavit 
attesting to the existence of a State license, permit, or other 
authorization for activities at the LTCF.
    [sbull] Section 1301.27 would be added to indicate that only retail 
pharmacies may operate automated dispensing systems at long term care 
facilities. The section would further indicate that a retail pharmacy 
must maintain a separate registration at each long term care facility 
location at which automated dispensing systems are installed and 
operated, and that if more than one retail pharmacy operates an 
automated dispensing system at a long term care facility, each retail 
pharmacy must maintain its own separate registration at that facility. 
Finally, this section indicates that retail pharmacies applying for 
separate registrations to install and operate automated dispensing 
systems at long term care facilities would be exempt from application 
fees for those separate registrations.
    [sbull] Section 1304.04 would be revised to permit a registered 
retail pharmacy with one or more associated registrations at LTCFs to 
keep all records for those LTCF locations at the retail pharmacy site 
or other approved central location.
    [sbull] Since the provider pharmacy would likely be ordering 
controlled substances for multiple LTCFs that it services, Sec.  
1307.11(b) which limits total distribution by a practitioner to 5 
percent of all controlled substances dispensed in the course of a year 
would be amended to provide an exemption for this activity.

Regulatory Certifications

Regulatory Flexibility Act

    The Deputy Assistant Administrator, Office of Diversion Control, 
hereby certifies that this rulemaking has been drafted in accordance 
with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed 
this regulation, and by approving it certifies that this regulation 
will not have a significant economic impact on a substantial number of 
small business entities. This proposed rule provides the option of 
using an automated dispensing system to dispense controlled substances 
to patients at long term care facilities. Facilities which currently 
use automated dispensing systems for the dispensing of noncontrolled 
substances and, where permitted by DEA registration, for controlled 
substances report in industry literature that, while there are costs 
associated with the lease or purchase of an automated dispensing 
system, automated dispensing systems have the following benefits:
    [sbull] Significantly reduce drug waste. Various studies over the 
past ten years have indicated that between 4 and 10 percent of 
medications at long term care facilities are wasted. Additional reports 
indicate that the use of an automated dispensing system reduces this 
waste by 90 percent.
    [sbull] Significant cost savings for payors. As noted previously, 
automated dispensing systems have the potential to reduce the cost of 
medications dispensed because medications are dispensed in a ``just in 
time'' manner for administration rather than dispensing a larger 
quantity of medication less frequently, which can create waste.
    [sbull] Reduce nursing and pharmacy labor costs. Nurses and 
pharmacy personnel no longer must prepare medications for dispensing to 
individual patients. Time is also saved by nursing staff due to the 
fact that medication administration records are now maintained 
electronically. Often, this time is then redirected to providing 
patient care.
    [sbull] Reduce the potential for medication dispensing and 
administration errors. Automated dispensing systems provide greater 
accuracy in the dispensing and administration of medications.
    Because the proposed rule does not require the use of automated 
dispensing systems, DEA believes that only pharmacies and LTCFs which 
find use of these systems cost-effective will adopt this approach.

Executive Order 12866

    The Deputy Assistant Administrator, Office of Diversion Control, 
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 not a significant regulatory action because it 
does not impose costs above $100 million a year or raise novel issues. 
Therefore, this action has not been reviewed by the Office of 
Management and Budget. Rather, this NPRM proposes to permit the 
installation of automated dispensing systems at long term care 
facilities by provider pharmacies, so long as state

[[Page 62258]]

regulations permit such installation. The use of automated dispensing 
systems by long term care facilities provides another alternative to 
address the problem of accumulation of surplus controlled substances at 
long term care facilities. DEA believes that persons choosing to 
utilize this method of dispensing controlled substances to patients at 
long term care facilities may realize cost savings. More importantly to 
DEA, the use of such systems should reduce the accumulation of excess 
controlled substances at these facilities, thereby reducing the 
potential for diversion of these controlled substances.

Paperwork Reduction Act

    This rule proposes that a retail pharmacy currently registered with 
DEA would be required to apply for separate registration at the 
location of the long term care facility at which it intends to install 
and operate an automated dispensing system. Application for 
registration is made using currently existing DEA registration forms 
(DEA Form 224 for registration and 224A for registration renewal). DEA 
estimates that approximately 100 persons per year will apply for 
registration to operate automated dispensing systems at long term care 
facilities. Therefore, DEA is revising its OMB-approved information 
collection (OMB 1117-0014) to reflect this increased burden due to this 
program change.
    Further, within this rulemaking DEA is proposing that at the time 
of application for this separate registration at the long term care 
facility by the retail pharmacy, the applicant must include with their 
application for registration (DEA Form 224) an affidavit as to the 
existence of State authorization to operate the automated dispensing 
system at the long term care facility. DEA has provided a format for 
the affidavit as part of its proposed regulations. This affidavit is 
exempt from the requirements of the Paperwork Reduction Act (5 CFR 
1320.3(h)(1)).

Executive Order 12988

    This proposed rule meets the applicable standards set forth in 
Sections 3(a) and 3(b)(2) of Executive Order 12988.

Executive Order 13132

    This rule does not preempt or modify any provision of State law; 
nor does it impose enforcement responsibilities on any State; nor does 
it diminish the power of any State to enforce its own laws. 
Accordingly, this 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 
$113,000,000 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.

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule as defined by Section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996. This rule 
will not result in an annual effect on the economy of $100,000,000 or 
more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based companies to 
compete with foreign-based companies in domestic and export markets.

List of Subjects

21 CFR Part 1300

    Definitions, Drug traffic control.

21 CFR Part 1301

    Administrative practice and procedure, Drug traffic control, 
Security measures.

21 CFR Part 1304

    Drug traffic control, Prescription drugs.

21 CFR Part 1307

    Drug traffic control.

    For the reasons set out above, 21 CFR parts 1300, 1301, 1304, and 
1307 are proposed to be amended as follows:

PART 1300--DEFINITIONS [AMENDED]

    1. The authority citation for Part 1300 continues to read as 
follows:

    Authority: 21 U.S.C. 802, 871(b), 951, 958(f).

    2. Section 1300.01 is proposed to be amended by adding a new 
paragraph (b)(45) to read as follows:


Sec.  1300.01  Definitions relating to controlled substances.

* * * * *
    (b) * * *
    (45) The term automated dispensing system means a mechanical system 
that performs operations or activities, other than compounding or 
administration, relative to the storage, packaging, counting, labeling, 
and dispensing of medications, and which collects, controls, and 
maintains all transaction information.

PART 1301--REGISTRATION OF MANUFACTURERS, DISTRIBUTORS, AND 
DISPENSERS OF CONTROLLED SUBSTANCES [AMENDED]

    3. The authority citation for part 1301 continues to read as 
follows:

    Authority: 21 U.S.C. 821, 822, 823, 824, 871(b), 875, 877, 956.

    4. Sec.  1301.17 is proposed to be revised by redesignating 
paragraph (c) as paragraph (d) and adding new paragraph (c) to read as 
follows:


Sec.  1301.17  Special procedures for certain applications.

* * * * *
    (c) If at the time of application for a separate registration at a 
long term care facility, the retail pharmacy has been issued a license, 
permit, or other form of authorization from the appropriate State 
agency to install and operate an automated dispensing system for the 
dispensing of controlled substances at the long term care facility, the 
applicant must include with his/her application for registration (DEA 
Form 224) an affidavit as to the existence of the State authorization. 
Exact language for this affidavit may be found at the DEA Diversion 
Control Program web site. The affidavit must include the following 
information:
    (1) The name and title of the corporate officer or official signing 
the affidavit;
    (2) The name of the corporation, partnership or sole proprietorship 
operating the retail pharmacy;
    (3) The name and complete address (including city, state, and Zip 
code) of the retail pharmacy;
    (4) The name and complete address (including city, state, and Zip 
code) of the long term care facility for which DEA registration is 
sought;
    (5) Certification that the named retail pharmacy has been 
authorized by the state Board of Pharmacy or licensing agency to 
install and operate an automated dispensing system for the dispensing 
of controlled substances at the named long term care facility 
(including the license or permit number, if applicable);
    (6) The date on which the authorization was issued;
    (7) Statements attesting to the following:
    (i) The affidavit is submitted to obtain a Drug Enforcement 
Administration registration number;
    (ii) If any information is false, the Administration may 
immediately suspend the registration for this activity

[[Page 62259]]

and commence proceedings to revoke under 21 U.S.C. 824(a) because of 
the danger to public health and safety;
    (iii) Any false information contained in this affidavit may subject 
the person signing this affidavit and the above-named corporation/
partnership/business to prosecution under 21 U.S.C. 843, the penalties 
for conviction of which include imprisonment for up to 4 years, a fine 
of not more than $30,000 or both;
    (8) Signature of the person authorized to sign the Application for 
Registration for the named retail pharmacy;
    (9) Notarization of the affidavit.
* * * * *
    5. Sec.  1301.27 is proposed to be added to read as follows:


Sec.  1301.27  Separate registration by retail pharmacies for 
installation and operation of automated dispensing systems at long term 
care facilities.

    (a) A retail pharmacy may install and operate automated dispensing 
systems, as defined in Sec.  1300.01 of this chapter, at long term care 
facilities, pursuant to the requirements of Sec.  1301.17 of this part. 
No person other than a retail pharmacy may install and operate an 
automated dispensing system at a long term care facility.
    (b) Retail pharmacies installing and operating automated dispensing 
systems at long term care facilities must maintain a separate 
registration at the location of each long term care facility at which 
automated dispensing systems are located. If more than one retail 
pharmacy operates automated dispensing systems at the same long term 
care facility, each retail pharmacy must maintain a registration at the 
long term care facility.
    (c) A registered retail pharmacy applying for a separate 
registration to operate an automated dispensing system for the 
dispensing of controlled substances at a long term care facility is 
exempt from application fees for any such additional registrations.

PART 1304--RECORDS AND REPORTS OF REGISTRANTS [AMENDED]

    6. The authority citation for part 1304 continues to read as 
follows:

    Authority: 21 U.S.C. 821, 827, 871(b), 958(e), 965.

    7. Sec.  1304.04 is proposed to be amended by revising paragraph 
(a) to read as follows:


Sec.  1304.04  Maintenance of records and inventories.

    (a) Except as provided in paragraphs (a)(1) and (a)(2) of this 
section, every inventory and other record required to be kept under 
this part shall be kept by the registrant and be available, for at 
least 2 years from the date of such inventory or records, for 
inspection and copying by authorized employees of the Administration.
    (1) Financial and shipping records (such as invoices and packing 
slips but not executed order forms subject to Sec.  1305.13 of this 
chapter) may be kept at a central location, rather than at the 
registered location, if the registrant has notified the Administration 
of his intention to keep central records. Written notification must be 
submitted by registered or certified mail, return receipt requested, in 
triplicate, to the Special Agent in Charge of the Administration in the 
area in which the registrant is located. Unless the registrant is 
informed by the Special Agent in Charge that permission to keep central 
records is denied, the registrant may maintain central records 
commencing 14 days after receipt of his notification by the Special 
Agent in Charge. All notifications must include the following:
    (i) The nature of the records to be kept centrally.
    (ii) The exact location where the records will be kept.
    (iii) The name, address, DEA registration number and type of DEA 
registration of the registrant whose records are being maintained 
centrally.
    (iv) Whether central records will be maintained in a manual or 
computer readable form.
    (2) A registered retail pharmacy that possesses additional 
registrations for automated dispensing systems at long term care 
facilities may keep all records required by this part for those 
additional registered sites at the retail pharmacy or other approved 
central location.
* * * * *

PART 1307--MISCELLANEOUS [AMENDED]

    8. The authority citation for Part 1307 continues to read as 
follows:

    Authority: 21 U.S.C. 821, 822(d), 871(b).

    9. Sec.  1307.11 is proposed to be amended by adding a new 
paragraph (c) to read as follows:


Sec.  1307.11  Distribution by dispenser to another practitioner or 
reverse distributor.

* * * * *
    (c) The distributions that a registered retail pharmacy makes to 
automated dispensing systems at long term care facilities for which the 
pharmacy also holds registrations do not count toward the 5 percent 
limit in paragraphs (a)(4) and (b) of this section.

    Dated: October 24, 2003.
Laura M. Nagel,
Deputy Assistant Administrator, Office of Diversion Control.
[FR Doc. 03-27511 Filed 10-31-03; 8:45 am]
BILLING CODE 4410-09-P