[Federal Register Volume 71, Number 167 (Tuesday, August 29, 2006)]
[Rules and Regulations]
[Pages 51105-51115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-14286]



[[Page 51105]]

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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Parts 1301 and 1309

[Docket No. DEA-266F]
RIN 1117-AA96


Controlled Substances and List I Chemical Registration and 
Reregistration Application Fees

AGENCY: Drug Enforcement Administration (DEA), Department of Justice.

ACTION: Final Rule.

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SUMMARY: This final rule establishes the fee schedule for DEA 
registration and reregistration fees relating to the registration and 
control of the manufacture, distribution and dispensing of controlled 
substances and listed chemicals to appropriately reflect all costs 
associated with its Diversion Control Program for the conduct of 
activities as mandated by 21 U.S.C. 822 and 958. Specifically, this 
final rule revises the fee schedule for controlled substances and List 
I chemical handlers so that all manufacturers, distributors, importers, 
exporters, and dispensers of controlled substances and of List I 
chemicals pay an annual fee, by registrant category, irrespective of 
whether they handle controlled substances or List I chemicals. In doing 
so, this rule implements clarifications to the Diversion Control 
Program and the Diversion Control Fee Account made by Congress in the 
Consolidated Appropriations Act of 2005 (Pub. L. 108-447) that amended 
21 U.S.C. 886a.

EFFECTIVE DATE: This rule is effective November 1, 2006. The new fee 
schedule will be in effect for all new applications postmarked on or 
after November 1, 2006 and for all renewal applications postmarked on 
or after November 1, 2006.

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

SUPPLEMENTARY INFORMATION:

I. Background and Statutory Authority

    The Drug Enforcement Administration published a Notice of Proposed 
Rulemaking in the Federal Register on November 16, 2005 (70 FR 69474) 
to adjust the registration and reregistration fees for controlled 
substances and List I chemical handlers.
    The Controlled Substances Act (CSA) requires that all 
manufacturers, distributors, dispensers, importers and exporters of 
controlled substances and List I chemicals obtain an annual 
registration with DEA (21 U.S.C. 822 and 958(f)). In addition, the CSA, 
as codified in 21 U.S.C. 821, authorizes the Attorney General, who in 
turn redelegates this authority to the Administrator of DEA, to 
``promulgate rules and regulations and to charge reasonable fees 
relating to the registration and control of the manufacture, 
distribution, and dispensing of controlled substances and listed 
chemicals'' (21 U.S.C. 821 as amended by Pub. L. 108-447).
    In October 1992, Congress passed the Departments of Commerce, 
Justice and State, the Judiciary and Related Agencies Appropriations 
Act of 1993 which changed the source of funding for DEA's Diversion 
Control Program (DCP) from being part of DEA's Congressional 
appropriation to full funding by registration and reregistration fees 
through the establishment of the Diversion Control Fee Account (DCFA). 
The Appropriations Act of 1993 required that ``[f]ees charged by the 
Drug Enforcement Administration under its diversion control program 
shall be set at a level that ensures the recovery of the full costs of 
operating the various aspects of that program.'' The legislation did 
not, however, provide clarification on what constituted the ``Diversion 
Control Program,'' thus leaving open the issue as to what fee-setting 
criteria should be used to determine which costs could be reimbursed 
from the DCFA.
    In response to the Appropriations Act of 1993, DEA published a 
Notice of Proposed Rulemaking (NPRM) in December 1992 to adjust the 
registration and reregistration fees for controlled substance 
registrants (57 FR 60148, December 18, 1992). In the absence of 
guidelines from Congress regarding the specific criteria to be followed 
in identifying costs and setting the fees, DEA relied on the plain 
language of the Appropriations Act of 1993 and proposed fees necessary 
to cover the costs of the activities that were identified within the 
budget decision unit known as the ``Diversion Control Program.''
    At the time that the Appropriations Act of 1993 was passed, 21 
U.S.C. 821 did not extend to chemical control activities; accordingly, 
there were no registration or fee requirements for handlers of listed 
chemicals. DEA therefore excluded chemical control costs from its Final 
Rule implementing the requirements of the Appropriations Act of 1993 
(58 FR 15272, March 22, 1993). Congress amended 21 U.S.C. 821 on 
December 17, 1993 to require reasonable fees relating to ``the 
registration and control of regulated persons and of regulated 
transactions'' (Domestic Chemical Diversion Control Act of 1993, 3(a), 
Pub. L. 103-200, 107 Stat. 2333); however, despite this amendment, DEA 
continued to endeavor to maintain separate funding for its controlled 
substances diversion control and its chemical diversion control 
activities. That is, DEA has paid for its controlled substance 
diversion control activities through the Diversion Control Fee Account 
and registration fees and its chemical diversion control activities 
through appropriated funds.
    Following publication of DEA's Final Rule, the American Medical 
Association (AMA) and others filed a lawsuit objecting to the increase 
in registration and reregistration fees on the grounds that DEA had 
failed to provide adequate information as to what activities were 
covered by the fees and how they were justified. Upon appeal, the 
United States Court of Appeals for the District of Columbia Circuit 
remanded, without vacating, the rule to DEA, requiring the agency to 
provide an opportunity for meaningful notice and comment on the fee-
funded components of the DCP. In doing so, the court confirmed the 
boundaries of the DCP that DEA can fund by registration fees, finding 
that the current statutory scheme (21 U.S.C. 821 and 958) required DEA 
to set reasonable registration fees to recover the full costs of the 
DCP. (AMA v. Reno, 57 F.3d 1129, 1135 (DC Cir. 1995)).
    Thus, in the absence of a simple, objective measure by which DCP 
costs could be identified and the appropriate fees calculated, both DEA 
and the courts have looked to 21 U.S.C. 821 and 958 to define the 
guidelines for determining what costs should be included in the 
calculation of the fees and from whom the fees might be collected.
    On November 20, 2004, Congress passed the Departments of Commerce, 
Justice, and State, the Judiciary, and Related Agencies Appropriations 
Act of 2005 which provided clarification as to the activities 
constituting the DCP. This Act was included in the Consolidated 
Appropriations Act of 2005, which was signed into law by the President 
on December 8, 2004 (Pub. L. 108-447). The Act amended 21 U.S.C. 886a 
to define the Diversion Control Program as ``the controlled substance 
and chemical diversion control activities of the Drug Enforcement 
Administration,'' which are further defined as the ``activities related 
to the registration and control of the manufacture, distribution and 
dispensing, importation and exportation of controlled substances and 
listed

[[Page 51106]]

chemicals.'' It also amended the section to provide that reimbursements 
from the DCFA ``* * * shall be made without distinguishing between 
expenses related to controlled substances activities and expenses 
related to chemical activities.'' Finally, the Act amended 21 U.S.C. 
821 and 958(f) to make the language of those sections consistent with 
the definition of the DCP (Pub. L. 108-447). The net effect of the 
amendments is to allow DEA to deposit all registration and 
reregistration fees (controlled substance and chemical) into the Fee 
Account and fund all controlled substance and chemical diversion 
control activities from the account without distinguishing as to the 
type of activity (controlled substance or chemical) being funded.
    While the comingling of controlled substances diversion control and 
chemical diversion control fees and activities might seem initially to 
be incongruous, there is, in fact, a significant amount of overlap, 
both in terms of activities and registrant populations. While it is 
easy to distinguish between handlers of controlled substances and the 
handlers of commodity chemicals such as red phosphorous, hydriotic 
acid, acetic anhydride and nitroethane, the line between handlers of 
controlled substances and handlers of drug products that contain listed 
chemicals is blurred considerably. Not only are the drug products that 
contain List I chemicals often manufactured by controlled substances 
manufacturers, they are commonly distributed by controlled substances 
distributors and routinely sold or dispensed by pharmacies, hospitals, 
and individual practitioners. In calendar year 2004, there were over 30 
million prescriptions filled for drug products containing the List I 
chemicals ephedrine, pseudoephedrine, and phenylpropanolamine, which is 
still routinely used in veterinary products. There are undoubtedly many 
instances in which practitioners also provided their patients with free 
samples of allergy and cough and cold preparations that contain those 
chemicals. Within this general environment, the use of a single, 
unified account to fund the controlled substances and chemical 
diversion control activities of DEA is consistent with the mandates of 
the law.
    DEA is bound by all of the above-referenced statutory requirements 
in setting fees that recover the ``full cost'' of the Diversion Control 
Program and its activities, as defined in the most recent lawmaking 
action. Therefore, DEA has developed this rulemaking according to these 
legislative mandates.

II. Comments Received

    Following publication of the Notice of Proposed Rulemaking on 
November 16, 2005, DEA received 12 comments to the notice. Three 
comments were received from practitioners (one physician, one physician 
assistant, and one dentist); three comments were received from 
manufacturers or distributors; five comments were received from 
organizations representing different registrant groups; and one comment 
was submitted anonymously.
    Most commenters raised concern about the increase in fees, 
particularly for chemical registrants. Two commenters in particular 
wrote that the increase in fees will have a significant impact on 
chemical registrants compared to current fee rates and proposed an 
alternative fee increase. One commenter wrote that programs within DEA 
should be downsized or eliminated to maintain a ``neutral budget'' and 
keep costs lower. Three commenters expressed concern that the fee 
increase is coming at a time when Congress and other entities are re-
evaluating medical reimbursements; one physician commented that he 
would pay the new fee as soon as his reimbursements increased by the 
same percentage. Another expressed concern that the cost of the 
increased fees would discourage physicians from registering with DEA 
and using controlled substances, thus affecting patient care.
    Five commenters objected to the removal of the waiver of the 
chemical registration requirement for controlled substances registrants 
that handle drug products that are regulated as List I chemicals. The 
commenters wrote that they believed removal of this waiver would damage 
the ability of affected registrants to service their customer base and 
posed an unreasonable hardship. Two commenters also noted that removal 
of the waiver could create expensive administrative burdens for both 
registrants and for DEA.
    Two registrants objected to the existing fee exemption for certain 
entities such as some Federal agencies, certain charitable 
organizations, law enforcement entities, and military personnel. 
Commenters noted that exempting these organizations results in larger 
fees for fee-paying registrants and requested reevaluation of this 
policy by DEA.
    Two commenters raised the issue of performance standards tied to 
the increase in fees and requested clarification on DEA's expected 
outcomes as a result of the increased fees and the performance measures 
and metrics DEA has established to assess these outcomes.
    One commenter wrote that the required $15 million annual transfer 
to the U.S. Treasury out of collected fee funds was a significant 
percentage of the total fees collected, and the commenter urged DEA to 
request that Congress resume its annual $15 million appropriation to 
offset this transfer. The commenter wrote that it, too, would work to 
see this appropriation restored.
    One anonymous commenter wrote that medical marijuana is ``most 
popular in California especially with grayhaired men and women.'' 
Marijuana is not a licit controlled substance or listed chemical 
covered by this rulemaking and is not affected by this final rule; 
accordingly, this comment is not further addressed in this section. 
Another commenter, a practitioner, submitted a request for 
reregistration materials through the comment response vehicle. These 
materials were provided to the commenter, and this matter is not 
addressed further in this rulemaking.
    Three commenters requested that DEA extend implementation of the 
final rule, noting that the rule comes in the middle of budget cycles 
for many registrants who had not planned for increased fees as part of 
their budgets and that it also comes at a time of statutory and other 
change for the industry. Each of these comments is addressed below.

III. Objection to Fee Increase

    Nine of the twelve comments received by DEA expressed opposition to 
the increase in fees. As described above, 21 U.S.C. 821 (as amended by 
Pub. L. 108-447) authorizes DEA to collect reasonable fees relating to 
the registration and control of the manufacture, distribution and 
dispensing of controlled substances and listed chemicals. In addition, 
the 1993 Departments of Commerce, Justice, and State, the Judiciary, 
and Related Agencies Appropriations Act that established the Diversion 
Control Fee Account (DCFA) specifically mandated that fees ``shall be 
set at a level that ensures the recovery of the full costs of operating 
the various aspects of that program'' (21 U.S.C. 886a(3)). Congress, in 
using the mandatory term ``shall'' as opposed to the discretionary 
``may,'' unambiguously required DEA to increase its then-existing 
registration fees resulting in registrants fully funding DCP expenses. 
DEA, therefore, lacks discretion in this matter and must fund the DCP 
totally from registration fees (that is, not from fines, Congressional 
appropriations or other potential sources).

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    Accordingly, while DEA recognizes the economic pressures facing 
practitioners, such as declining Medicaid reimbursements and increasing 
operating, equipment, and insurance costs, the current statutory scheme 
requires DEA to set registration fees to recover the full costs of the 
DCP, while limiting DEA to charge ``reasonable'' fees relating to the 
registration and control of the manufacture, distribution and 
dispensing of controlled substances and listed chemicals. DEA does not 
have the discretion to partially fund the DCP or to find alternative 
sources of funding for the program. Rather DEA is mandated by law to 
fund the DCP fully through registration fees. The registration fees 
outlined below are set at a level to support the full costs of the DCP 
as mandated by law.
    With clarification of the activities constituting the DCP in the 
Appropriations Act of 2005, DEA is now required to evaluate the ``full 
costs'' of the DCP to include all controlled substances and all listed 
chemical diversion control activities; whereas, previously the only DCP 
costs supported through registrant fees were controlled substances 
diversion control costs, and listed chemical diversion control 
activities were supported through appropriated funds. (See the Notice 
of Proposed Rulemaking published on November 17, 2005, 70 FR 69474) for 
additional discussion on this separation of activities.) In fact, 
operating the DCP as a cohesive whole, that is without distinction in 
activities between controlled substances and chemical diversion control 
activities, offers scale efficiencies and ultimately cost savings and 
improved services for registrants.
    The fees set forth in this final rule reflect calculation of the 
full costs of both the controlled substances and chemical diversion 
control activities of the DCP. The revised fee structure contained in 
this final rule includes annual fees (or fee equivalent) ranging from 
$184 to $2,293. DEA recognizes that the increase in fees may represent 
a budgeting challenge for registrants, particularly registrants with 
multiple sites requiring separate registrations (e.g., chain drug 
stores), however, because the fees do not represent a significant 
financial burden on registrants, DEA has determined that the fees 
contained in this final rule are reasonable. DEA expects that among all 
registrants, mid-level practitioners and chemical distributors may feel 
the greatest impact of the new fees (see discussion in Section XII). 
However, for most registrants qualifying as small businesses the 
revised fee will have a minimal impact, representing from 0.28 percent 
to as little as 0.01 percent of average annual sales (or income). For 
registrants that are large businesses with higher annual sales, the 
impact of the fee is far less.

A. Differences in Fee Increase Among Registrant Categories

    Two commenters expressed concern that the fees for chemical 
registrants under this final rule reflect a higher percentage increase 
than the change in fees for controlled substances registrants. 
Commenters noted that fees for chemical manufacturers will increase by 
approximately 300 percent and that fees for chemical distributors will 
increase by about 100 percent compared to the current fee structure for 
these chemical registrants. Commenters proposed an alternative fee 
increase for these categories based on the same percentage increase as 
controlled substances manufacturers and distributors.
    Currently, chemical handlers pay a user fee that supports only the 
costs of registration/reregistration and some administrative 
oversight--not the operating costs of the DEA's chemical diversion 
control program. With the transfer of DEA's chemical control program 
costs to the DCFA, chemical registrants must, together with controlled 
substances registrants, pay a fee to cover the full costs of the DCP. 
The same circumstance occurred in 1993 with the establishment of the 
DCFA; controlled substances registrants were faced with a substantial 
increase in their fees as they transferred from a similar user fee that 
supported registration costs only to a fee schedule to cover the full 
costs of DEA's controlled substances diversion control activities. With 
the transfer of the chemical control program costs to the DCFA and the 
amendments to the law that reimbursements shall be made without 
distinguishing between chemical and controlled substances activities, 
chemical registrants must now be included in the DCFA population and 
pay the fees necessary to sustain that account.
    DEA does not have the discretion to adjust fees according to 
percentages, such as was proposed by the commenters, as it is required 
to fully fund the DCP through fees paid by the registrants while also 
maintaining reasonable fees.

B. Program Costs

    One commenter suggested that DEA downsize or eliminate programs to 
maintain a neutral budget and keep fees low. DEA works diligently to 
achieve administrative efficiencies in all of its programs, including 
the Diversion Control Program. Through a scheduled, periodic review 
process, virtually all aspects of the DCP are inspected to detect any 
waste, fraud or abuse. All expenditures charged to the DCFA also are 
reviewed and approved by an independent unit within DEA that reviews, 
approves, and audits fee-funded expenditures.
    Moreover, each of DEA's annual budget requests to Congress, which 
contain all components of each DEA program, including the DCP, is 
available for public review. Each budget request is examined and 
approved by both the Department of Justice and the Office of Management 
and Budget.
    DEA has undertaken several initiatives to streamline aspects of the 
DCP both for DEA and for registrants. For example, DEA is developing a 
system to permit the electronic transmission of controlled substances 
prescriptions through electronic creation, signature and record 
retention, which will significantly increase the efficiency by which 
prescriptions are transmitted from prescriber to pharmacy; however, it 
will not reduce the review requirements of DEA employees that monitor 
the prescription process for controlled substances. DEA has developed a 
system that permits the electronic transmission of controlled 
substances orders which provides increased efficiencies for industry. 
Moreover, in 2005, DEA underwent an internal reorganization to increase 
operational efficiencies and keep costs as low as possible. This 
reorganization shifted the focus from business decision units to 
activities that support the registration and control of the 
manufacture, distribution, and dispensing of controlled substances and 
listed chemicals. However, DEA is also subject to costs related to 
inflation and additional costs of ``doing business'' that face all 
organizations despite its best efforts to keep these expenses 
reasonable.

C. Effect of Fee Increase on Practitioner Registration

    One practitioner commenter noted concern that increases to annual 
registrant fees could reduce the number of physicians registering with 
DEA and using controlled substances as part of patient care. The 
Controlled Substances Act requires that every person who manufactures, 
distributes or dispenses any controlled substance or who proposes to 
engage in the manufacture, distribution or dispensing of any controlled 
substance obtain an annual

[[Page 51108]]

registration (21 U.S.C. 822(a)(1) and 822(a)(2)).
    DEA notes that the impact of the annual registration fee on 
practitioners ($184 annual equivalent) is not significant, ranging from 
a high of 0.28% to a low of 0.13% based on annual income for this 
registrant category (see discussion below on small business impacts). 
The majority of registered practitioners (71 percent) are physicians 
whose annual income averages more than $140,000 and for whom the $184 
annual fee equivalent represents approximately 0.13 percent of annual 
income. Other large practitioner groups in this category include 
dentists (16 percent of practitioners) for whom the annual fee 
equivalent represents about 0.14 percent of their average annual income 
of $133,000 and veterinarians (5 percent of practitioners) for whom the 
annual fee equivalent equates to 0.25 percent of their average annual 
income of $76,000. The revised fee will have greater impacts on other 
types of practitioners (less than 5 percent of all registered 
practitioners) with lower annual incomes, including nurse 
practitioners, physician assistants, optometrists, and others for whom 
the annual fee equivalent has an average impact of approximately 0.16-
0.28 percent.

IV. Removal of Waiver for Chemical Registrants Holding an Existing 
Controlled Substances Registration

    Four commenters objected to the removal of the waiver of the 
registration requirement for persons who distribute, import or export a 
drug product containing a List I chemical if that person is already 
registered with DEA to manufacture, distribute or dispense, import or 
export a controlled substance. Commenters noted that removal of this 
waiver could dramatically increase the annual registration fees for 
affected registrants and would damage their ability to service their 
customers, would pose an ``unreasonable hardship,'' and could adversely 
affect the List I chemical supply chain since many affected registrants 
also hold a controlled substances registration. One commenter also 
noted that removal of this waiver could require significant changes to 
internal operations for affected registrants who would have to maintain 
two DEA registrations, imposing significant paperwork, technological 
and operational burdens. The commenter also suggested removal of the 
waiver could result in increased operational burdens for DEA.
    After careful review of these comments and consideration of the 
benefits compared to the drawbacks associated with removal of this 
waiver, DEA has decided to retain the current registration waiver for 
persons who distribute, import, or export a product containing a List I 
chemical who already hold a valid DEA registration to manufacture, 
distribute or dispense, import, or export a controlled substance.
    Accordingly, the proposed changes to the waiver provision are 
removed.
    DEA will address registration issues created by passage of the 
Combat Methamphetamine Epidemic Act of 2005, included in the USA 
PATRIOT Improvement and Reauthorization Act of 2005 (Pub. L. 109-177) 
as part of the Act's implementing regulations.

V. Registration Fee Waivers for Certain Organizations and Persons

    Two commenters objected to DEA's fee exemption for certain entities 
and persons. Currently, government institutions, law enforcement 
agencies, and military personnel are exempt from fees. In addition, DEA 
waives fees for some charitable organizations. The commenters objected 
to these fee waivers suggesting that the process is inequitable and 
that the net result is higher fees for fee-paying registrants than if 
these organizations were also required to pay annual registration and 
reregistration fees. The commenters also asserted that fee-paying 
registrants are paying a ``hidden contribution'' or ``forced donation'' 
to charitable organizations, without tax relief, by partially 
subsidizing their fee requirements.
    DEA appreciates these comments. DEA recognizes that exempting 
certain entities from paying annual fees provides a benefit to some at 
the expense of others and is evaluating its current practice of 
exempting certain organizations and persons from annual registration 
fees. Any changes to this practice will require a separate regulatory 
process, including notice and comment.

VI. Performance Standards

    Two commenters objected to the omission of anticipated outcomes or 
results expected by DEA as a result of the increased fees. The 
commenters requested detail on how DEA will track such results and 
correlate them to the higher fees while recommending the development of 
a system of metrics, accountability and reporting for the DCP.
    The Government Performance and Results Act (GPRA) and the 
President's Management Agenda (PMA), requires DEA, like all other 
agencies and components, to provide a budget summary that incorporates 
performance information on a quarterly basis. In response to these 
requirements, DEA already integrates budget and performance in order to 
evaluate the effectiveness of programs relative to long-term, 
measurable outcome goals.
    More specifically, in response to GPRA and the PMA, the DCP's 
budgetary reporting on outlays from the DCFA includes performance 
measures that are consistent with DEA's Strategic Plan and that reflect 
the effectiveness of programmatic activities funded by registrant fees. 
Among the objectives included in DEA Strategic Plan is continued 
support to the registrant population through improved technology, 
including E-commerce and customer support, while maintaining 
cooperation, support, and assistance from the regulated industry. These 
efforts, funded through registration fees, are intended to provide 
benefits to the registrant population such as streamlined processing 
and improved access to information. They are also intended to reduce 
the paperwork burden on small businesses; reduce forged or stolen 
prescriptions; improve authentication and verification of the 
prescribing or ordering party and reduce processing time; increase 
overall security; and improve DEA's data quality, agency efficiency and 
responsiveness in carrying out its mission.
    All budget submissions for the Diversion Control Program, like 
submissions for all programs across DEA, are subject to multiple levels 
of scrutiny and review within DEA, the Department of Justice, and the 
Office of Management and Budget before being included in the 
President's annual Budget Request to Congress.

VII. $15 Million Treasury Transfer

    One commenter urged DEA to request that Congress resume the annual 
$15 million appropriation to offset the requirement that the first $15 
million in fee collections be transferred to the Treasury, so that all 
fee funds may be used for DCP activities. The commenter noted that the 
annual $15 million transfer represents a ``significant component'' of 
the amounts to be collected each year.
    The Appropriations Act of 1993 requires that DEA transfer the first 
$15 million of fee revenue to the General Fund of the Treasury each 
year (21 U.S.C. 886a(1)). For each fiscal year from Fiscal Year 1993 
through Fiscal Year 1998, Congress appropriated an additional $15 
million to offset this requirement (a total infusion to the DCFA of $90 
million). However, beginning in Fiscal Year 1999, Congress

[[Page 51109]]

discontinued this additional appropriation. Accordingly, since Fiscal 
Year 1999, DEA has to include the annual $15 million transfer for fee 
calculations; that is, DEA must pay for all operational costs of the 
DCP plus the $15 million transfer out of fee funds collected from 
registrants.

VIII. Extension of Implementation of the Final Rule

    Three commenters requested delay of implementation of the final 
rule to Fiscal Year 2007 or later. Two commenters requested the delay 
because of the potential effects of removal of the registration waiver 
for chemical handlers holding a current controlled substance 
registration. Following careful review of comments, DEA has decided to 
keep this waiver intact (see discussion above).
    Three commenters requested the delay because of ongoing changes in 
the industry, including pending state and Federal legislation affecting 
over-the-counter products containing listed chemicals (such as products 
containing pseudoephedrine and ephedrine). One commenter noted that 
such pending legislation could affect distributors carrying these 
products and therefore DEA registrations and revenue projections. The 
commenters also noted that the fee modifications are coming at a time 
when Congress, Federal agencies, and private party payers are exploring 
methods for reducing reimbursement for prescription drugs. Two 
commenters wrote that implementation of the final rule would come in 
the middle of budget cycles for affected registrants and would, 
therefore, impose financial challenges because of the unanticipated 
additional expenses in the annual fees, particularly for chain drug 
stores with many separately registered sites. DEA notes that very few 
chain registrants have registrations expiring during the current 
calendar year, thus limiting the potential impact of the fee increase 
in the current budget cycle. With respect to pending legislation and 
its possible effect on DEA registrations, DEA takes into account the 
potential ebb and flow of the registrant population through the 
retirement of old registrations and new applications for registration 
when calculating the fees. DEA cannot delay implementation of the new 
fee schedule as the agency is required, by statute, to recover the full 
costs of the diversion control program through registration fees.

IX. Overview of Diversion Control Program Responsibilities

    The mission of DEA's Diversion Control Program (DCP) is to enforce 
the provisions of the Controlled Substances Act as they pertain to 
ensuring the availability of controlled substances and listed chemicals 
for legitimate uses in the United States while exercising controls to 
prevent the diversion of these substances and chemicals for illegal 
uses.
    DCP activities include: Program priorities and field management 
oversight; coordination of major investigations; drafting and 
promulgating of regulations relating to the enforcement of the CSA and 
other legislation; establishment of national policy on diversion; 
fulfillment of U.S. obligations under drug control treaties; advice and 
leadership on state legislation/regulation; legal control of drugs and 
chemicals not previously under Federal control; control of imports and 
exports of licit controlled substances and chemicals; and program 
resource planning and allocation, among other activities.
    As was outlined in the Notice of Proposed Rulemaking, DCP 
activities funded to date out of the DCFA have been limited to 
controlled substances diversion control activities, including 
controlled substances scheduling, registration, investigation, 
inspection, data collection and analysis, training, establishing 
production quotas, cooperative efforts with state, local and other 
Federal agencies, cooperative efforts with the regulated industry, 
international activities relating to the registration and control of 
the manufacture, distribution and dispensing of controlled substances, 
and attendant management, personnel, administrative and clerical 
oversight for the DCP. Fee-fundable activities also have included 
travel, rent, utilities, supplies, equipment, and services associated 
with the above-listed activities and activities related to the control 
of licit controlled substances in the U.S. in which the initial source 
is foreign. One commenter wrote that administrative expenses should not 
be paid for out of the DCFA and fee funds; however, the courts have 
found that all activities and expenses that are directly related to 
diversion control may be funded with registration and reregistration 
fees (AMA v. Reno, 57 F.3d 1129, 1135 (DC Cir. 1995)). Administrative 
and other operational costs are directly related to the ongoing 
diversion control efforts of the DCP.
    With the inclusion of the chemical diversion control activities in 
the DCFA and registrant fees by the Appropriations Act, activities 
related to the overall control of listed chemicals, registration, 
investigation, inspection, data collection and analysis, cooperative 
efforts with the regulated industry, related management and 
administrative positions devoted to diversion control activities, other 
personnel, and administrative and clerical oversight have been included 
in the budget calculations that are used to determined the registration 
fees.
    For detail on the specific DCP components to be funded through the 
DCFA and their associated costs for the Fiscal Year 2006-2008 period 
covered by this rulemaking, please see DEA's Notice of Proposed 
Rulemaking, published in the Federal Register on November 16, 2005 (70 
FR 69474).

X. Budget Changes

    In calculating the registration and reregistration fees contained 
in this Final Rule, DEA has included all DCP activities associated with 
the ``registration and control of the manufacture, distribution and 
dispensing, importation and exportation of controlled substances and 
listed chemicals'' (Pub. L. 108-447).
    As discussed in detail in the Notice of Proposed Rulemaking (70 FR 
69474), beginning in Fiscal Year 2006, both controlled substance and 
chemical diversion control costs must be included in the calculation of 
DCFA registration and reregistration fees. Among the chemical diversion 
control costs to be included among the ``full costs'' of operating the 
DCP are a portion of the Office of Training (TR) that specifically 
supports the activities of the DCP by providing training, guidance and 
instruction for Diversion Investigators, Diversion Task Force Officers, 
regulatory agencies, state and local law enforcement, and DCP personnel 
on controlled substances and chemical diversion control, advanced 
skills and technical knowledge, and systems applications. Also included 
are 188 chemical diversion control positions; 12 overseas diversion 
investigators dedicated to the DCP; and costs associated with the 
chemical transaction system (CTRANS).
    The chemical diversion control costs that will be supported through 
the DCFA total $24,499,000 for Fiscal Year 2006, $24,880,000 for Fiscal 
Year 2007, and $25,235,000 for Fiscal Year 2008, accounting for salary 
growth and inflation.
    In addition to the chemical control costs, DEA is including among 
fee-fundable activities certain other internal resources that support 
the DEA's diversion control activities, but that, as was discussed more 
fully in previous rulemakings regarding the DCFA, had previously been 
supported through appropriated funds despite their direct

[[Page 51110]]

relationship to and support of the DCP. These activities include 
portions of the Office of Chief Counsel, the Office of Forensic 
Sciences Special Testing Laboratory, and the Special Operations 
Division; and additional special agent and intelligence analyst costs 
not previously supported through the DCFA. These components and 
associated costs are described below. A portion of DEA's internal 
computer system, Firebird, which already is supported through the DCFA, 
is included in the fee-fundable cost. The total cost of these non-
chemical additions for Fiscal Year 2006 is $26,996,000; for Fiscal Year 
2007 is $31,198,000; and for Fiscal Year 2008 is $34,736,000.
    In calculating the revised fee schedule, DEA used the Fiscal Year 
2006 enacted Appropriation, the President's Budget Request for Fiscal 
Year 2007, the expected Budget Request for Fiscal Year 2008, and the 
annual $15 million transfer to the U.S. Treasury as mandated by the CSA 
(21 U.S.C. 886a). In addition to fee funding all program elements and 
activities related to the registration and control of the manufacture, 
distribution, dispensing, importation, and exportation of controlled 
substances and listed chemicals, DEA must transfer the first $15 
million of fee revenue to the General Fund of the Treasury each year as 
described above (21 U.S.C. 886a(1)).
    The Fiscal Year 2006 cost of the DCP is $201,673,000, including a 
base of $150,178,000 for controlled substances diversion control 
activities, $24,499,000 in chemical diversion control activities, and 
$26,996,000 for the additional non-chemical DCP support activities 
outlined above and described in detail in the November 16, 2005 Notice 
of Proposed Rulemaking (70 FR 69474), including 52 additional special 
agent positions; a portion of the Forensic Sciences Special Testing 
Laboratory; a portion of the Office of Chief Counsel that directly 
supports diversion control activities; 34 of the 67 field intelligence 
analysts to be phased in between Fiscal Year 2006-2007 and 6 
Headquarters intelligence analysts to support domestic and 
international diversion control investigations (the remaining 33 field 
intelligence analysts will be phased in during Fiscal Year 2007); a 
portion of the Special Operations Division directly related to 
diversion control efforts; and Firebird operations costs to support 
communication and infrastructure of the diversion control program.
    With the addition of the required $15 million transfer to the U.S. 
Treasury, the total amount necessary to collect through registrant fees 
in Fiscal Year 2006 is $216,673,000.
    The DCP cost for Fiscal Year 2007, including all activities 
relating to the registration and control of the manufacture, 
distribution and dispensing of controlled substances and listed 
chemicals, is $212,078,000, as reflected in the President's Budget 
Request to Congress. Including the required $15 million transfer to the 
U.S. Treasury, the total amount necessary to collect through registrant 
fees in Fiscal Year 2007 is $227,078,000. The anticipated costs of the 
DCP for Fiscal Year 2008, including all activities relating to the 
registration and control of the manufacture, distribution and 
dispensing of controlled substances and listed chemicals, is 
$218,669,000. Including the required $15 million transfer to the U.S. 
Treasury, the total amount necessary to collect through registrant fees 
in Fiscal Year 2008 is $233,669,000.
    The total amount that must be collected through fee funds for the 
Fiscal Year 2006-2008 period to fully fund the DCP as mandated by 
statute is $677,420,000. Without an increase in fees, DEA would fall 
short by $185,475,536 in funds to support the operations of the DCP. 
The new fee structure contained in this final rule, therefore, provides 
the necessary additional funds to ensure that the operational costs of 
the DCP are fully funded through registrant fees as mandated by 
statute. As explained above, DEA is required by statute to collect the 
``full costs'' associated with operating the DCP.

XI. Calculation of Fees

    Based on the total amount necessary to collect for Fiscal Years 
2006-2008, DEA developed the specific fee levels for each registrant 
category according to its current fee structure and the fee-paying 
ratios that have been in existence since the inception of registrant 
fees. New fees are shown in the table below. For discussion on DEA's 
analysis of alternative fee schedules and approaches to calculating 
registrant fees, please see DEA's 2002 Final Rule (67 FR 51988, August 
9, 2002) and its 1996 Final Rule (61 FR 68624, December 30, 1996).
    In developing the fee schedule, DEA opted to set the fee level for 
a three-year period (FY 2006-2008) for two reasons. First, the vast 
majority of registrants are practitioners who pay a three-year 
registration fee. These registrants are divided into roughly three 
separate groups who pay their three-year registration fees on alternate 
year cycles. Accordingly, the fees below reflect the total amount 
necessary to be collected for the full three-year period (FY 2006-
2008), divided by projected registrants and accounting for projected 
registrant growth by category for each fiscal year. Because different 
categories of registrants pay different amounts, DEA weighted the 
number of registrants in each category to ensure the appropriate 
reflection in the fee schedule. In calculating the final fee schedule 
reflected below, DEA relied on the latest and current registrant 
population figures, which have fluctuated since the proposed fees 
contained in the Notice of Proposed Rulemaking. Because the fees 
reflect the total amount necessary for collection over a three-year 
period (Fiscal Years 2006-2008) and because the type and number of 
registrants varies from year to year, the total amount of fees 
collected may not equal the requested budget level for any given year. 
Surplus fees collected in one year are used to offset fee collection 
shortfalls in another year. In no case are fees spent in excess of the 
levels enacted by Congress.
    In evaluating options to structure the fee schedule, DEA opted to 
remain with the current fee structure to reduce reporting burdens on 
registrants and operational costs associated with the DCP which would 
then be passed on to registrants through annual fees.
    To recover the full costs of the DCP as required by statute and as 
outlined in the preceding sections, DEA is adjusting the fees in 
accordance with its existing fee structure as shown in the following 
table. Under this fee schedule, controlled substances registrants and 
chemical registrants in the same registrant category (e.g., 
manufacturers) pay the same fee regardless of the substance or chemical 
being handled. The table also includes the current fees paid by each 
category.

------------------------------------------------------------------------
                                                          Current annual
            Registrant class              New annual fee        fee
------------------------------------------------------------------------
Manufacturers (controlled substances)...          $2,293          $1,625

[[Page 51111]]

 
Manufacturers (chemical)................           2,293             595
                                                          (registration)
Distributors, Importers/Exporters                  1,147             813
 (controlled substances), including
 reverse distributors...................
Distributors, Importers/Exporters                  1,147             595
 (chemical).............................                  (registration)
Chemical Retail Distributors............           1,147             255
                                                          (registration)
Dispensers/Practitioners *..............             184             130
Researchers, Narcotic Treatment Programs             184            130
------------------------------------------------------------------------
* Practitioners, mid-level practitioners, pharmacies, hospitals/clinics,
  and teaching institutions will pay a fee of $551 for a three-year
  registration period.

    The fee structure above supplants the current fee structure for 
controlled substances and for chemical registrants. These fees go into 
effect November 1, 2006.

XI. Related Issues and Waivers

    Also by this Notice, DEA is removing differentiation between retail 
and non-retail distributors of List I chemicals. As of the effective 
date of this final rule, both retail and non-retail distributors must 
pay the same fee as described above.
    DEA also is withdrawing, by this notice, its Notice of Proposed 
Rulemaking issued on December 1, 1999, which proposed changes in 
registration and reregistration fees for manufacturers, distributors, 
importers, exporters and retail distributors of List I chemicals (64 FR 
67216, December 1, 1999).
    DEA also is rescinding the 1997 Notice of Fee Waiver published on 
October 17, 1997 (62 FR 53958) which had waived a portion of the 
registration fee for non-retail distributors of pseudoephedrine, 
phenylpropanolamine, and combination ephedrine drug products.

XII. Effects on Small Businesses

    The new registrant fees range from $184 to $2,293 annually per 
location and per registered business activity. To assess whether the 
fees could impose a significant economic impact on a small entity, DEA 
considered whether the fees represent more than one percent of annual 
revenues for the registrant groups that qualify as small entities under 
the Small Business Administration (SBA) standards. As discussed below, 
DEA does not anticipate that the increase in fees will have a 
significant impact on a substantial number of small entities.
    Most DEA registrants qualify as small entities under the SBA 
standards. Almost all practitioners, who compose 85 percent of all 
registrants affected by this rulemaking, would be considered small. For 
practitioners and dispensers, the annual revenues would have to be 
below $18,400 to have the annual registration fee or equivalent 
represent more than one percent of revenues. Medical practitioners who 
are granted authority to handle controlled substances have annual 
incomes well above that level. Eighty-six percent of all practitioners 
have annual incomes in excess of $133,000 (Bureau of Labor Statistics 
salary information). For these practitioners, the new annual fee 
equivalent of $184 represents less than 0.14 percent of annual income. 
Physician assistants, the mid-level practitioner with the lowest 
average salary, have annual salaries of about $65,000 (ibid.). For this 
practitioner group, which represents about 2 percent of registered 
practitioners, the annual fee equivalent equates to 0.28 percent of 
annual income.
    The higher fees also will not impose a significant burden on 
dispensers. The average independent pharmacy has sales of almost $2 
million according to the National Association of Chain Drug Stores. The 
smallest clinics have revenue streams higher than $18,400. Among 
dispensers, the greatest impact of this regulatory fee change will be 
on chain pharmacies which must hold a registration for each of their 
locations. The largest chain holds retail pharmacy registrations for 
more than 5,000 locations as well as almost 40 registrations for its 
distribution centers. However, these businesses do not qualify as small 
entities; moreover, for the annual fee to have a significant economic 
impact, annual revenues would have to be less than $18,400.
    DEA acknowledges the concerns of one commenter that fee increases 
going into effect in the middle of a budget cycle represent a non-
controllable and, perhaps, unanticipated, expense for large chain drug 
stores and chain pharmacy distribution centers; however, as discussed 
above, only a small fraction of registered chain drug stores must renew 
their DEA registration in the second half of Calendar Year 2006 and are 
thus affected by the budgetary implications of the fee increase.
    For manufacturers, the 2002 Census data indicate that the value of 
shipments for the smallest chemical manufacturers (including drugs) 
ranged from $477,000 to $1.1 million per location (establishment). For 
this registrant group, therefore, the fee of $2,293 does not represent 
more than one percent of revenues and will not impose a significant 
burden.
    The one registrant group for which the fees could exceed one 
percent of revenues and have a significant economic impact is chemical 
distributors. According to 2004 Duns data, between one percent and 11 
percent of the wholesale sectors handling listed chemicals have 
revenues below $100,000. DEA does not collect financial data on its 
registrants, but it is possible that some chemical distributor 
registrants have revenues below $100,000. The increase in the annual 
reregistration fee for chemical distributors (from $477 to $1,147) may 
impose a significant burden on these registrants. The increase in the 
initial registration fee (from a subsidized $116 for certain entities 
to $1,147 annually) also could be a barrier to entrance for these very 
small firms. Based on its experience, however, DEA considers it 
unlikely that any firm that lacked the resources to pay the initial 
registration fee would be granted a registration because it would be 
unlikely to have the resources necessary to prevent diversion of the 
products. Moreover, the new registration fees for all wholesale level 
activities are far less than the estimated annual fee of $6,400 that 
chemical registrants would be charged if they were required to 
independently fund the chemical portion of the diversion control 
program, as previously discussed in the Notice of Proposed Rulemaking 
(70 FR 69474, November 16, 2005).
    In short, combining all diversion control activities into a single 
Diversion Control Program, as mandated by the Consolidated 
Appropriations Act of

[[Page 51112]]

2005, results in scale efficiencies and overall reduced costs to all 
registrants.

XIII. Regulatory Analysis

Regulatory Flexibility Act

    The Deputy Administrator hereby certifies that this rulemaking has 
been drafted in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) and has provided above detailed regulatory analysis on 
the effects of this rulemaking on small entities. The rule will not 
have a significant economic impact on a substantial number of small 
entities as discussed in Section XII. While DEA recognizes that this 
regulation will have a financial effect on registrants, the change in 
fees is necessary to fully comply with 21 U.S.C. 886a and related 
statutes, which mandate that DEA establish the fees at a level 
necessary to recover the full costs of the Diversion Control Program.

Executive Order 12866

    The Deputy Administrator certifies that this rulemaking has been 
drafted in accordance with the principles in Executive Order 12866 
Sec.  1(b). DEA has determined that, because the increased fees will 
result in a total increase of less than $70 million annually to be 
collected through fees (that is the difference between the amount 
collected annually under the previous fee structure and the amount to 
be collected under the new fee structure), this is not a significant 
regulatory action; however, it was reviewed by the Office of Management 
and Budget. The fees to be collected represent an increase of less than 
$70 million each year for the Fiscal Year 2006-2008 period (based on 
estimated fee collection figures and compared to the previous fee 
schedule) and are required to fully support the President's budget for 
the DCP, as approved by Congress through the appropriations process. 
Therefore, DEA has no discretion in the establishment of the new fees 
and is required by law to collect registration and reregistration fees 
of sufficient amount to fully support the DCP.

Executive Order 12988

    This regulation meets the applicable standards set forth in 
Sec. Sec.  3(a) and 3(b)(2) of Executive Order 12988 Civil Justice 
Reform.

Executive Order 13132

    This rulemaking 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 of $118,000,000 or more in any one 
year, and will not significantly or uniquely affect small governments. 
The increase in fees for private sector entities and individuals will 
result in a total increase of less than $70 million annually to be 
collected through fees (that is the difference between the amount 
collected annually under the prior fee structure and the amount to be 
collected under the new fee structure). Moreover, the effect on 
individual entities and practitioners is minimal. The majority of the 
affected entities will pay a fee of $551 for a three year registration 
period (the equivalent of $184 per year) which equates to about 0.13 
percent of annual income for most practitioners (the vast majority of 
all registrants). This rule is promulgated in compliance with 21 U.S.C. 
886a that the full cost of operating the DCP be collected through 
registrant fees.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by Sec.  804 of the Small 
Business Regulatory Enforcement Fairness Act of 1996. While this rule 
will result in an annual effect on the economy of $100,000,000 or more, 
in that it will result in the collection of approximately $216-$234 
million annually, the increase in fees (that is, the difference between 
the amount collected annually under the previous fee structure compared 
to the new fee structure) will result in a total increase of less than 
$70 million annually. Moreover, it will not result in a major increase 
in costs or prices or cause significant adverse effects on competition, 
employment, investment, productivity, innovation, or on the ability of 
U.S.-based companies to compete with foreign-based companies in 
domestic and export markets. This rule is not a discretionary action 
but rather responds to statutory clarification as to the activities 
constituting the DCP which, by law, must be fully funded through 
registrant fees (21 U.S.C. 821 and 958 and 21 U.S.C. 886a, 
respectively). Moreover, the individual effect on small business 
registrants is minimal. The majority of registrants considered to be 
small businesses are practitioners who will pay a three-year 
registration fee of $551 or the equivalent of $184 per year. For the 
majority of these practitioners, who compose the vast majority of 
registrants and registrants qualifying as small businesses, this annual 
fee equivalent represents about 0.13 percent of their annual mean 
salary. The impact on other small business entities is described in 
greater detail in the preceding regulatory analysis.

List of Subjects

21 CFR Part 1301

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

21 CFR Part 1309

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


0
For the reasons set out above, 21 CFR parts 1301 and 1309 are amended 
as follows:

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

0
1. The authority citation for part 1301 is revised to read as follows:

    Authority: 21 U.S.C. 821, 822, 823, 824, 871(b), 875, 877, 886a, 
951, 952, 953, 956, 957.


0
2. Section1301.13 is amended by revising paragraph (e)(1) to read as 
follows:


Sec.  1301.13  Application for registration; time for application; 
expiration date; registration for independent activities; application 
forms, fees, contents and signature; coincident activities.

* * * * *
    (e) * * *
    (1)

[[Page 51113]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Application  Registration
        Business activity            Controlled  substances           DEA application forms             fee         period       Coincident activities
                                                                                                     (dollars)      (years)             allowed
--------------------------------------------------------------------------------------------------------------------------------------------------------
(i) Manufacturing................  Schedules I-V.............  New--225...........................        2,293             1  Schedules I-V: May
                                                               Renewal--225a......................        2,293                 distribute that
                                                                                                                                substance or class for
                                                                                                                                which registration was
                                                                                                                                issued; may not
                                                                                                                                distribute or dispose
                                                                                                                                any substance or class
                                                                                                                                for which not
                                                                                                                                registered. Schedules II-
                                                                                                                                V: except a person
                                                                                                                                registered to dispose of
                                                                                                                                any controlled substance
                                                                                                                                may conduct chemical
                                                                                                                                analysis and preclinical
                                                                                                                                research (including
                                                                                                                                quality control
                                                                                                                                analysis) with
                                                                                                                                substances listed in
                                                                                                                                those schedules for
                                                                                                                                which authorization as a
                                                                                                                                mfg. was issued.
(ii) Distributing................  Schedules I-V.............  New--225...........................        1,147             1  .........................
                                                               Renewal--225a......................        1,147
(iii) Reverse distributing.......  Schedules I-V.............  New--225...........................        1,147             1  .........................
                                                               Renewal--225a......................        1,147
(iv) Dispensing or instructing     Schedules II-V............  New--224...........................          551             3  May conduct research and
 (includes Practitioner, Hospital/                             Renewal--224a......................          551                 instructional activities
 Clinic, Retail Pharmacy, Central                                                                                               with those substances
 fill pharmacy, Teaching                                                                                                        for which registration
 Institution).                                                                                                                  was granted, except that
                                                                                                                                a mid-level practitioner
                                                                                                                                may conduct such
                                                                                                                                research only to the
                                                                                                                                extent expressly
                                                                                                                                authorized under state
                                                                                                                                statute. A pharmacist
                                                                                                                                may manufacture an
                                                                                                                                aqueous or oleaginous
                                                                                                                                solution or solid dosage
                                                                                                                                form containing a
                                                                                                                                narcotic controlled
                                                                                                                                substance in Schedule II-
                                                                                                                                V in a proportion not
                                                                                                                                exceeding 20% of the
                                                                                                                                complete solution,
                                                                                                                                compound or mixture. A
                                                                                                                                retail pharmacy may
                                                                                                                                perform central fill
                                                                                                                                pharmacy activities.
(v) Research.....................  Schedule I................  New--225...........................          184             1  A researcher may
                                                               Renewal--225a......................          184                 manufacture or import
                                                                                                                                the basic class of
                                                                                                                                substance or substances
                                                                                                                                for which registration
                                                                                                                                was issued, provided
                                                                                                                                that such manufacture or
                                                                                                                                import is set forth in
                                                                                                                                the protocol required in
                                                                                                                                Sec.   1301.18 and to
                                                                                                                                distribute such class to
                                                                                                                                persons registered or
                                                                                                                                authorized to conduct
                                                                                                                                research with such class
                                                                                                                                of substance or
                                                                                                                                registered or authorized
                                                                                                                                to conduct chemical
                                                                                                                                analysis with controlled
                                                                                                                                substances.

[[Page 51114]]

 
(vi) Research....................  Schedules II-V............  New--225...........................          184             1  May conduct chemical
                                                               Renewal--225a......................          184                 analysis with controlled
                                                                                                                                substances in those
                                                                                                                                schedules for which
                                                                                                                                registration was issued;
                                                                                                                                manufacture such
                                                                                                                                substances if and to the
                                                                                                                                extent that such
                                                                                                                                manufacture is set forth
                                                                                                                                in a statement filed
                                                                                                                                with the application for
                                                                                                                                registration or
                                                                                                                                reregistration and
                                                                                                                                provided that the
                                                                                                                                manufacture is not for
                                                                                                                                the purposes of dosage
                                                                                                                                form development; import
                                                                                                                                such substances for
                                                                                                                                research purposes;
                                                                                                                                distribute such
                                                                                                                                substances to persons
                                                                                                                                registered or authorized
                                                                                                                                to conduct chemical
                                                                                                                                analysis, instructional
                                                                                                                                activities or research
                                                                                                                                with such substances,
                                                                                                                                and to persons exempted
                                                                                                                                from registration
                                                                                                                                pursuant to Sec.
                                                                                                                                1301.24; and conduct
                                                                                                                                instructional activities
                                                                                                                                with controlled
                                                                                                                                substances.
(vii) Narcotic Treatment Program   Narcotic Drugs in           New--363...........................          184             1  .........................
 (including compounder).            Schedules II-V.            Renewal--363a......................          184
(viii) Importing.................  Schedules I-V.............  New--225...........................        1,147             1  May distribute that
                                                               Renewal--225a......................        1,147                 substance or class for
                                                                                                                                which registration was
                                                                                                                                issued; may not
                                                                                                                                distribute any substance
                                                                                                                                or class for which not
                                                                                                                                registered.
(ix) Exporting...................  Schedules I-V.............  New--225...........................        1,147             1
                                                               Renewal--225a......................        1,147
(x) Chemical Analysis............  Schedules I-V.............  New--225...........................          184             1  May manufacture and
                                                               Renewal--225a......................          184                 import controlled
                                                                                                                                substances for
                                                                                                                                analytical or
                                                                                                                                instructional
                                                                                                                                activities; may
                                                                                                                                distribute such
                                                                                                                                substances to persons
                                                                                                                                registered or authorized
                                                                                                                                to conduct chemical
                                                                                                                                analysis, instructional
                                                                                                                                activities, or research
                                                                                                                                with such substances and
                                                                                                                                to persons exempted from
                                                                                                                                registration pursuant to
                                                                                                                                Sec.   1301.24; may
                                                                                                                                export such substances
                                                                                                                                to persons in other
                                                                                                                                countries performing
                                                                                                                                chemical analysis or
                                                                                                                                enforcing laws related
                                                                                                                                to controlled substances
                                                                                                                                or drugs in those
                                                                                                                                countries; and may
                                                                                                                                conduct instructional
                                                                                                                                activities with
                                                                                                                                controlled substances.
--------------------------------------------------------------------------------------------------------------------------------------------------------

* * * * *

PART 1309--REGISTRATION OF MANUFACTURERS, DISTRIBUTORS, IMPORTERS, 
AND EXPORTERS OF LIST I CHEMICALS

0
3. The authority citation for part 1309 is amended to read as follows:

    Authority: 21 U.S.C. 821, 822, 823, 824, 830, 871(b), 875, 877, 
886a, 958.


0
4. Section 1309.11 is revised to read as follows:


Sec.  1309.11  Fee amounts.

    (a) For each application for registration or reregistration to 
manufacture for distribution the applicant shall pay an annual fee of 
$2,293.
    (b) For each application for registration or reregistration to 
distribute (either retail distribution or non-retail distribution), 
import, or export a List I chemical, the applicant shall pay an annual 
fee of $1,147.

0
5. Section 1309.12 is revised to read as follows:


Sec.  1309.12  Time and method of payment; refund.

    (a) For each application for registration or reregistration to 
manufacture for distribution, distribute (either retail distribution or 
non-retail distribution), import, or export a List I chemical, the 
applicant shall pay the fee when the application for registration or 
reregistration is submitted for filing.

[[Page 51115]]

    (b) Payment should be made in the form of a personal, certified, or 
cashier's check or money order made payable to ``Drug Enforcement 
Administration.'' Payments made in the form of stamps, foreign 
currency, or third party endorsed checks will not be accepted. These 
application fees are not refundable.

    Dated: August 22, 2006.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E6-14286 Filed 8-28-06; 8:45 am]
BILLING CODE 4410-09-P