[Federal Register Volume 71, Number 202 (Thursday, October 19, 2006)]
[Notices]
[Pages 61801-61803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-17526]


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

DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. DEA-300P]


Assessment of Annual Needs for the List I Chemicals Ephedrine, 
Pseudoephedrine, and Phenylpropanolamine for 2007: Proposed

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION: Notice of proposed year 2007 assessment of annual needs.

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

SUMMARY: This notice proposes initial year 2007 assessment of annual 
needs for certain List I chemicals in accordance with the Combat 
Methamphetamine Epidemic Act of 2005 (CMEA), enacted on March 9, 2006. 
The Act required DEA to establish production quotas and import quotas 
for ephedrine, pseudoephedrine, and phenylpropanolamine. This effort 
was done in order to prevent the illicit use of these three chemicals 
in the clandestine manufacture of methamphetamine. The enactment of the 
CMEA places additional regulatory controls upon the manufacture, 
distribution, importation and exportation of the three List I 
chemicals.

DATES: Comments or objections must be received on or before December 4, 
2006.

ADDRESSES: To ensure proper handling of comments, please reference 
``Docket No. DEA-300P'' on all written and electronic correspondence. 
Written comments being sent via regular mail should be sent to the 
Deputy Assistant Administrator, Office of Diversion Control, Drug 
Enforcement Administration, Washington, DC 20537, Attention: DEA 
Federal Register Representative/ODL. Written comments sent via express 
mail should be sent to DEA Headquarters, Attention: DEA Federal 
Register Representative/ODL, 2401 Jefferson Davis Highway, Alexandria, 
VA 22301. Comments may be directly sent to DEA electronically by 
sending an electronic message to [email protected]. DEA 
will accept attachments to electronic comments in Microsoft Word, 
WordPerfect, Adobe PDF, or Excel file formats only. DEA will not accept 
any file format other than those specifically listed here.

FOR FURTHER INFORMATION CONTACT: Christine A. Sannerud, PhD, Chief, 
Drug and Chemical Evaluation Section, Drug Enforcement Administration, 
Washington, DC 20537, by e-mail, [email protected] or by fax, (202) 
353-1263.

SUPPLEMENTARY INFORMATION: Section 713 of the Combat Methamphetamine 
Epidemic Act of 2005 (Title VII of Pub. L. 109-177) (CMEA) amended 
section 306 of the Controlled Substances Act (CSA) (Title 21 United 
States Code (U.S.C.) Sec.  826 ``Production quotas for controlled 
substances'') by adding ephedrine, pseudoephedrine, and 
phenylpropanolamine to existing language to read as follows: ``The 
Attorney General shall determine the total quantity and establish 
production quotas for each basic class of controlled substance in 
schedules I and II and for ephedrine, pseudoephedrine, and 
phenylpropanolamine to be manufactured each calendar year to provide 
for the estimated medical, scientific, research, and industrial needs 
of the United States, for lawful export requirements, and for the 
establishment and maintenance of reserve stocks.'' Further, Sec.  715 
of CMEA amended 21 U.S.C. Sec.  952 ``Importation of controlled 
substances'' by adding the same List I chemicals to the existing 
language in paragraph (a), and by adding a new paragraph (d) to read as 
follows:

    (a) Controlled substances in schedule I or II and narcotic drugs 
in schedule III, IV, or V; exceptions:

It shall be unlawful to import into the customs territory of the 
United States from any place outside thereof (but within the United 
States), or to import into the United States from any place outside 
thereof, any controlled substance in schedule I or II of subchapter 
I of this chapter, or any narcotic drug in schedule III, IV, or V of 
subchapter I of this chapter, or ephedrine, pseudoephedrine, and 
phenylpropanolamine, except that--
    (1) such amounts of crude opium, poppy straw, concentrate of 
poppy straw, and coca leaves, and of ephedrine, pseudoephedrine, and 
phenylpropanolamine, as the Attorney General finds to be necessary 
to provide for medical, scientific, or other legitimate purposes, 
and * * *
    (d)(1) With respect to a registrant under section 958 who is 
authorized under subsection (a)(1) to import ephedrine, 
pseudoephedrine, or phenylpropanolamine, at any time during the year 
the registrant may apply for an increase in the amount of such 
chemical that the registrant is authorized to import, and the 
Attorney General may approve the application if the Attorney General 
determines that the approval is necessary to provide for medical, 
scientific, or other legitimate purposes regarding the chemical.

    Note: This excerpt of the amendment is published for the 
convenience of the reader. The official text is published at 21 
U.S.C. 952(a) and (d)(1).

    The responsibility for establishing the assessment of annual needs 
has been delegated to the Administrator of the DEA by Sec.  0.100 of 
Title 28 of the Code of Federal Regulations. The Administrator, in 
turn, has redelegated this function to the Deputy Administrator, 
pursuant to the Code of Federal Regulations Title 28 Sec.  0.104.
    The proposed year 2007 assessment of annual needs represents those 
quantities of ephedrine, pseudoephedrine, and phenylpropanolamine which 
may be manufactured domestically and/or imported into the United States 
to provide adequate supplies of each substance for: The estimated 
medical, scientific, research, and industrial needs of the United 
States; lawful export requirements; and the establishment and 
maintenance of reserve stocks.

Calculation of the Assessment: Medical Needs of the United States for 
Ephedrine and Pseudoephedrine

    Since the manufacture and importation of ephedrine, 
pseudoephedrine, and phenylpropanolamine have not been previously 
regulated through the establishment of an assessment of annual needs, 
the Drug Enforcement Administration obtained assistance from a private 
independent contractor, IMS Health Government Solutions (IMS), to 
develop the proposed initial estimate of the medical needs of the 
United States of ephedrine and pseudoephedrine.
    IMS' estimates of medical needs for ephedrine and pseudoephedrine 
were derived from 2005 data that the company routinely collects and 
offers to customers in order to understand the pharmaceutical market. 
For this analysis, IMS utilized the following types of data: (1) Sales 
to retail establishments (including pharmacies), (2) sales by retail 
establishments to patients, and (3) medical insurance claims. IMS' 
estimates of medical needs were intended to encompass only those 
products containing either ephedrine or pseudoephedrine, whether 
requiring a

[[Page 61802]]

prescription or available over-the-counter (OTC). Its estimates of use 
encompassed those products containing ephedrine and pseudoephedrine 
which are lawfully marketed under the Food, Drug and Cosmetic Act.
    Although no direct estimates for the assessment of annual needs are 
currently available, IMS utilized information from a variety of data 
sources to develop three independent measures (as described in the next 
paragraph). After each of the three independent measures were 
calculated for ephedrine and pseudoephedrine, IMS then took a weighted 
average of the three individual estimates in order to derive its final 
estimate which was then considered by DEA. The weighted average was 
determined based on IMS' confidence in each individual estimate such 
that estimates with less confidence were given less weight.
    The first estimate was based upon product sales to retail outlets, 
from IMS' National Sales Perspective (NSP) service. This estimate was 
supplemented with information from: IMS' Drug Distribution Database 
(DDD) and National Prescription Audit (NPA), ACNielsen's Scantrack (ST) 
and Homescan (HS) services. The second estimate was based upon product 
sales to customers, from NPA, ST, and HS services, supplemented with 
information from DDD and NSP services. The third estimate was based 
upon patient prescription claims data from IMS' ReferencePoint (RP) 
database, supplemented with information from United States Census 
Bureau population estimates and IMS' National Disease and Therapeutic 
Index (NDTI), NSP, DDD, ST, and HS services. A copy of the IMS report 
may be obtained from DEA Diversion Web site at: http://www.deadiversion.usdoj.gov.
    Based on the IMS report, DEA concluded that 3,800 kg of ephedrine 
and 350,700 kg of pseudoephedrine were required to meet the medical 
needs of the United States.

Calculation of the Assessment: Medical Needs of the United States for 
Phenylpropanolamine

    DEA did not request that IMS determine the medical needs for 
phenylpropanolamine. In November 2000, the Food and Drug Administration 
(FDA) issued a public health warning for phenylpropanolamine and 
requested that all drug companies discontinue marketing products 
containing phenylpropanolamine due to the drug's association with risk 
for hemorrhagic stroke. In response to the FDA's warning, many 
companies voluntarily reformulated their products to exclude 
phenylpropanolamine. Subsequently, on December 22, 2005, FDA published 
a Notice of Proposed Rulemaking (70 FR 75988) to reclassify all over-
the-counter nasal decongestants and weight control drug products 
containing phenylpropanolamine preparations from their previously 
proposed monograph status (Category 1) to nonmonograph (Category II). 
FDA concluded that drug products containing phenylpropanolamine cannot 
be generally recognized as safe and should no longer be available for 
over-the-counter use in humans. Therefore, for purposes of calculating 
the medical needs of the United States for phenylpropanolamine, DEA 
considered the drug's use in veterinary products only.
    DEA obtained from the FDA a list of all companies that manufacture 
veterinary products containing phenylpropanolamine. DEA contacted each 
company and requested information relating to sales of their 
phenylpropanolamine-containing products. Based on this review, DEA 
concluded that 4,354 kg were required to meet the medical needs of the 
United States.

Calculation of the Assessment: Industrial Needs, Export and Inventory 
Requirements

    After DEA considered the medical needs for ephedrine, 
pseudoephedrine and phenylpropanolamine (veterinary products), it then 
considered: (1) Industrial needs of the United States, (2) lawful 
export requirements, and (3) maintenance of reserve stocks to determine 
the assessment of annual needs for ephedrine, pseudoephedrine, and 
phenylpropanolamine.
    In consideration of the industrial needs of the United States for 
these three chemicals, DEA considered the use of ephedrine for the 
domestic manufacture of pseudoephedrine in 2005 and the amount of 
phenylpropanolamine used for the domestic manufacture of amphetamine in 
2005.
    In consideration of the requirements for lawful export purposes for 
these three chemicals, DEA considered total 2005 exports as provided on 
the DEA-Form 486 entitled ``Import/Export Declaration--Precursors and 
Essential Chemicals.'' Exports reported on the DEA-486 were as follows:

------------------------------------------------------------------------
                                                            2005 export
                    List I chemicals                      quantity  (kg)
------------------------------------------------------------------------
Ephedrine...............................................           2,540
Pseudoephedrine.........................................          90,260
Phenylpropanolamine.....................................             320
------------------------------------------------------------------------

    In consideration of the amounts required for the maintenance of 
reserve stocks, DEA considered 20% of the estimated medical and 
industrial requirements.
    Based on this information, the Deputy Administrator hereby proposes 
that the year 2007 assessment of annual needs for the following List I 
chemicals, expressed in kilograms of anhydrous base or acid, be 
established as follows:

------------------------------------------------------------------------
                                                               Proposed
                                                               year 2007
                      List I chemicals                          quotas
                                                                 (kg)
------------------------------------------------------------------------
Ephedrine (for sale)........................................    7,100 kg
Ephedrine (for conversion)..................................  128,760 kg
Pseudoephedrine (for sale)..................................  511,100 kg
Phenylpropanolamine (for sale)..............................    5,545 kg
Phenylpropanolamine (for conversion)........................    6,240 kg
------------------------------------------------------------------------

    Ephedrine (for conversion) refers to the industrial use of 
ephedrine, i.e., that which will be converted to pseudoephedrine. 
Phenylpropanolamine (for conversion) refers to the industrial use of 
phenylpropanolamine, i.e., that which will be converted to amphetamine 
by the pharmaceutical industry. The ``for sale'' quotas refer to the 
amount of ephedrine, pseudoephedrine, and phenylpropanolamine used for 
purposes outside of the above-mentioned conversions.
    All interested persons are invited to submit their comments in 
writing or electronically regarding this proposal following the 
procedures in the ADDRESSES section of this document. A person may 
object to or comment on the proposal relating to any of the above-
mentioned chemicals without filing comments or objections regarding the 
others. If a person believes that one or more of these issues warrant a 
hearing, the individual should so state and summarize the reasons for 
this belief.
    In the event that comments or objections to this proposal raise one 
or more issues which the Deputy Administrator finds warrant a hearing, 
the Deputy Administrator shall order a public hearing by notice in the 
Federal Register, summarizing the issues to be heard and setting the 
time for the hearing.
    The Office of Management and Budget has determined that notices of 
quotas are not subject to centralized review under Executive Order 
12866.

[[Page 61803]]

    This action does not preempt or modify any provision of State law; 
nor does it impose enforcement responsibilities on any State; nor does 
it diminish the power of any State to enforce its own laws. 
Accordingly, this action does not have any federalism implications 
warranting the application of Executive Order 13132.
    The Deputy Administrator hereby certifies that this action will 
have no significant impact upon small entities whose interests must be 
considered under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. 
The establishment of quotas for ephedrine, pseudoephedrine, and 
phenylpropanolamine is mandated by law. The quotas are necessary to 
provide for the estimated medical, scientific, research and industrial 
needs of the United States, for export requirements and the 
establishment and maintenance of reserve stocks. While quotas are of 
primary importance to large manufacturers, their impact upon small 
entities is neither negative nor beneficial. Accordingly, the Deputy 
Administrator has determined that this action does not require a 
regulatory flexibility analysis.
    This action meets the applicable standards set forth in Sec. Sec.  
3(a) and 3(b)(2) of Executive Order 12988 Civil Justice Reform.
    This action will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of 
$118,000,000 or more in any one year, and will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.
    This action is not a major rule as defined by Sec.  804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996 
(Congressional Review Act). This action will not result in an annual 
effect on the economy of $100,000,000 or more; a major increase in 
costs or prices; or significant adverse effects on competition, 
employment, investment, productivity, innovation, or on the ability of 
United States-based companies to compete with foreign-based companies 
in domestic and export markets.

    Dated: October 13, 2006.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E6-17526 Filed 10-18-06; 8:45 am]
BILLING CODE 4410-09-P