[Federal Register Volume 73, Number 249 (Monday, December 29, 2008)]
[Notices]
[Pages 79508-79514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-30808]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. DEA-314I]
Assessment of Annual Needs for the List I Chemicals Ephedrine,
Pseudoephedrine, and Phenylpropanolamine for 2009
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Interim Established Assessment of Annual Needs with Request for
Comment.
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SUMMARY: This notice establishes, on an interim basis, the Assessment
of Annual Needs for the List I chemicals ephedrine, pseudoephedrine,
and phenylpropanolamine. DEA seeks comment regarding the Assessment of
Annual Needs for those List I chemicals. The Assessment of Annual Needs
for these chemicals will be proposed to be revised, pursuant to DEA
regulations, during calendar year 2009. After consideration of the
comments received, DEA will finalize the assessment for those
chemicals, prior to proposing the revision of the assessment for those
chemicals during calendar year 2009.
DATES: This notice is effective January 1, 2009. Written comments must
be postmarked, and electronic comments must be sent, on or before
January 28, 2009.
ADDRESSES: To ensure proper handling of comments, please reference
``Docket No. DEA-314I'' on all written and electronic correspondence.
Written comments being sent via regular or express mail should be sent
to the Deputy Assistant Administrator, Office of Diversion Control,
Drug Enforcement Administration, 8701 Morrissette Drive, Springfield,
Virginia 22152, Attention: DEA Federal Register Representative/ODL.
Comments may be sent to DEA 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,
8701 Morrissette Drive, Springfield, Virginia 22152, Telephone: (202)
307-7183.
SUPPLEMENTARY INFORMATION: Section 713 of the Combat Methamphetamine
Epidemic Act (CMEA) of 2005 (Title VII of Pub. L. 109-177) (CMEA)
amended Section 306 of the Controlled Substances Act (CSA) (21 U.S.C.
826) by adding ephedrine, pseudoephedrine, and phenylpropanolamine to
existing language to read as follows: ``The Attorney General shall
determine the total quantity and establish production quotas for each
basic class of controlled substance in schedules I and II and for
ephedrine, pseudoephedrine, and phenylpropanolamine to be manufactured
each calendar year to provide for the estimated medical, scientific,
research, and industrial needs of the U.S., for lawful export
requirements, and for the establishment and maintenance of reserve
stocks.'' Further, section 715 of CMEA amended 21 U.S.C. 952
``Importation of controlled substances'' by adding the same List I
chemicals to the existing language in paragraph (a), and by adding a
new paragraph (d) to read as follows:
(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
U.S. from any place outside thereof (but within the U.S.), or to
import into the U.S. 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 * *
* may be so imported under such regulations as the Attorney General
shall prescribe.
* * * * *
(d)(1) With respect to a registrant under section 958 who is
authorized under subsection (a)(1) to import ephedrine,
pseudoephedrine, or phenylpropanolamine, at any time during the year
the registrant may apply for an increase in the amount of such
chemical that the registrant is authorized to import, and the
Attorney General may approve the application if the Attorney General
determines that the approval is necessary to provide for medical,
scientific, or other legitimate purposes regarding the chemical.
Editor's Note: This excerpt of the amendment is published for
the convenience of the reader. The official text is published at 21
U.S.C. 952(a) and (d)(1).
Background and Legal Authority
Section 713 of the CMEA (Title VII of Pub. L. 109-177) amended
section 306 of the CSA (21 U.S.C. 826) to require that the Attorney
General establish quotas to provide for the annual needs for ephedrine,
pseudoephedrine, and phenylpropanolamine. Section 715 of the CMEA
amended 21 U.S.C. 952 by adding ephedrine, pseudoephedrine, and
phenylpropanolamine to the existing language concerning importation of
controlled substances.
The 2009 Assessment of Annual Needs represents those quantities of
ephedrine, pseudoephedrine, and phenylpropanolamine which may be
manufactured domestically and/or imported into the U.S. in 2009 to
provide adequate supplies of each chemical for: the estimated medical,
scientific, research, and industrial needs of the U.S.; lawful export
requirements; and the establishment and maintenance of reserve stocks.
The responsibility for establishing the assessment has been
delegated to the Administrator of the DEA by 28 CFR 0.100. The
Administrator, in turn, has redelegated this function to the Deputy
Administrator, pursuant to 28 CFR 0.104.
On September 19, 2008, a notice entitled, ``Assessment of Annual
Needs for the List I Chemicals Ephedrine, Pseudoephedrine, and
Phenylpropanolamine for 2009: Proposed'' was published in the Federal
Register (73 FR 54431). That notice proposed the initial 2009
Assessment of Annual Needs for ephedrine (for sale), ephedrine (for
conversion), pseudoephedrine (for sale), phenylpropanolamine (for sale)
and phenylpropanolamine (for conversion). All interested persons were
invited to comment on or object to the proposed assessments on or
before October 20, 2008.
DEA received a total of two comments, one of which was from a law
firm representing an industry group comprised of distributors and
retailers of over-the-counter (OTC) medications. In that comment, the
law firm requested that DEA ``indicate what data it reviewed and relied
on to estimate trends and projected demands'' of
[[Page 79509]]
ephedrine. After consideration of this comment, DEA is providing the
data used in developing the proposed assessment for each of the listed
chemicals and is making additional information available in the
administrative record.
As discussed below, it is necessary to implement this notice on an
interim basis so that DEA can issue individual import, manufacturing,
and procurement quotas to DEA registered importers and manufacturers.
It is necessary to issue these quotas, for import and manufacturing of
pharmaceutical products containing ephedrine, pseudoephedrine, and
phenylpropanolamine in a timely manner to provide for an uninterrupted
supply of these materials that are important to the public health.
Comments Received
The first comment received in response to the September 19, 2008,
rulemaking was from a law firm representing an industry group comprised
of distributors and retailers of OTC medications. This commenter raised
concerns regarding the assessment for ephedrine (for sale).
The second comment was from a DEA registered chemical manufacturer.
The second commenter requested that DEA consider its individual
requirement for phenylpropanolamine (for conversion) in fixing the
final assessment of annual needs.
In response to these comments, the assessments for
phenylpropanolamine (for conversion) and ephedrine (for sale) are
discussed below within the context of the comments received.
DEA did not receive any comments on its proposed Assessment of
Annual Needs for ephedrine (for conversion), phenylpropanolamine (for
sale), and pseudoephedrine (for sale). While no comments were received
regarding the assessment of annual needs for these materials, this
notice also provides the underlying data which was used in determining
the assessments for these List I chemicals, to allow for additional
comment. Additional information is available in the docket.
Comment Regarding DEA's Proposed Assessment for Ephedrine (for Sale)
The commenter, a law firm representing an industry group comprised
of distributors and retailers of OTC medications indicated its belief
that the proposed 2009 ephedrine assessment was ``both unsupported and
insufficient to meet legitimate medical needs.'' The commenter
recommended that the 2009 ephedrine assessment be the same as the 2008
ephedrine (for sale) assessment (i.e., 11,500 kg). In its September 19,
2008, proposed Assessment, DEA proposed an assessment of 2,500 kg of
ephedrine (for sale) for 2009. The commenter stated that DEA provided
no actual data or support for its 80% reduction in the 2009 ephedrine
(for sale) assessment and that DEA failed to indicate what data it
reviewed and relied upon in making its proposal, and for that reason
requested that DEA publish the factual basis for the 2009 proposed
assessment for ephedrine (for sale). The commenter also stated its
belief that DEA failed to provide any indication that it considered
medical factors before it proposed the 2009 assessment.
DEA Response
In its proposal, DEA published the substance of the proposed
Assessment of Annual Needs and provided a description of the subjects
and issues involved, specifically:
To develop the 2009 assessment of annual needs for the U.S., DEA
considered applications for 2009 import, manufacturing, and
procurement quotas received from DEA registered manufacturers and
importers. DEA further considered information contained in import
and export declarations (DEA-486) along with information relating to
trends in the national rate of disposals, actual and estimated
inventories, and projected demand for the List I chemicals
ephedrine, pseudoephedrine and phenylpropanolamine in accordance
with 21 CFR 1315.11. (73 FR 54432, September 19, 2008)
In response to this comment, this notice further details the
underlying data summarized from quota applications, from import/export
documents, and data from a third party vendor, IMS Health Inc. DEA
notes that the information sources used for the 2009 assessment are
different from the data sources considered by DEA in establishing the
2007 and 2008 assessments. Specifically, DEA was able to consider
information obtained from applications for 2009 quotas. In contrast,
when the 2007 and 2008 assessments were proposed, on October 19, 2006,
and September 20, 2007, respectively, DEA either lacked quota
applications altogether or believed that it did not have a sufficient
number of applications from which to draw meaningful conclusions. With
the absence of quota applications from DEA registered importers and
manufacturers in those years (2006 and 2007), DEA relied on a report
prepared by IMS Health Inc.\1\ The report was commissioned by DEA
specifically for that purpose. This year, however, DEA is able to use
the data from quota applications and from information as specified in
21 CFR 1315.11.
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\1\ 2005 Ephedrine/Pseudoephedrine Legitimate Medical Use
Methodology and Final Report http://www.deadiversion.usdoj.gov/meth/dea_ims_study_070307.pdf.
\2\ 2008 data represents estimated sales, imports, and
inventories as reported on applications for quotas.
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A summary of the underlying data from quota applications and other
sources, as well as DEA's analysis of that data, are provided below.
Ephedrine Data
Ephedrine (for Sale) Data for 2009 Assessment of Annual Needs
[Kilograms]
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2009
Ephedrine 2006 2007 2008 \2\ Request
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Sales* (DEA 250)............................................ 1,993 2,840 1,291 921
Imports** (DEA 488)......................................... 5,627 1,337 1,179 44
Export Declarations (DEA 486)............................... 313 168 16 n/a
Inventory* (DEA 250)........................................ 856 1,795 468 n/a
IMS *** (NSP)............................................... 1,256 1,267 n/a n/a
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* Reported sales and inventory from applications for 2009 procurement quotas (DEA 250) received as of July 15,
2008.
** Reported imports from applications for 2009 import quotas (DEA 488) received as of July 15, 2008.
*** IMS Health, IMS National Sales Perspectives\TM\, January 2006 to December 2007, Retail and Non-Retail
Channels, Data Extracted July 15, 2008.
[[Page 79510]]
Underlying Data and DEA's Analysis
The DEA considered total net disposals (i.e., sales) of ephedrine
for the current and preceding two years, actual and estimated
inventories, projected demand (2009), industrial use, and export
requirements from data provided by DEA registered manufacturers and
importers in procurement quota applications (DEA 250), from
manufacturing quota applications (DEA 189), and from import quota
applications (DEA 488).\3\ The net disposals (i.e., sales) figures
provided by DEA registered manufacturers on quota applications include
the sales of ephedrine-based products that are used to treat asthma. In
this regard, DEA considered ``medical factors'' in its assessment. For
industrial use, ephedrine may be used as a chiral compound for the
manufacture of non-controlled non-scheduled drug products. DEA did not
receive requests for 2009 ephedrine for this industrial application.
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\3\ Applications and instructions for procurement, import and
manufacturing quotas can be found at http://www.deadiversion.usdoj.gov/quotas/quota_apps.htm.
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Additionally, DEA considered data on trends in the national rate of
net disposals from sales data provided by IMS Health's National Sales
Perspective\TM\ (NSP) database. Export data was provided from import
and export declarations (DEA 486).
At the time DEA drafted the 2009 proposed assessment (i.e., July
15, 2008), DEA considered applications for procurement quotas from DEA
registered manufacturers of ephedrine. These applications were due on
or before April 1, 2008. These firms requested authority to purchase a
total of 921 kg of ephedrine (for sale) in 2009. Additionally DEA
considered import quota applications from DEA registered importers
requesting authority to import a total of 44 kg of ephedrine (for
sale). DEA had not received any requests to synthesize ephedrine in
2009.
DEA further considered information on trends in the national rate
of net disposals from sales data provided by IMS Health's National
Sales Perspective\TM\ (NSP) database. IMS Health's NSP data provides
national level monthly estimates of pharmaceutical product purchases by
those that distribute/sell drug products to patients (retail
pharmacies, hospitals, clinics, food chain stores, and etc.) and
includes both prescription and OTC products. A detailed description of
the methodology that IMS Health Inc. continues to use in assembling the
NSP data can be found in IMS's publication, ``2005 Ephedrine/
Pseudoephedrine Legitimate Medical Use Methodology and Final Report.''
\4\ IMS NSP data reported the average sales volume of ephedrine for the
calendar years 2006 and 2007 to be approximately 1,261 kg.
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\4\ 2005 Ephedrine/Pseudoephedrine Legitimate Medical Use
Methodology and Final Report http://www.deadiversion.usdoj.gov/meth/dea_ims_study_070307.pdf.
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DEA further considered trends as derived from information provided
in applications for import, manufacturing, and procurement quotas and
in import and export declarations. Based on an analysis of the
inventory, acquisitions (purchases) and disposition (sales) data
provided by DEA registered manufacturers and importers on individual
quota applications received as of July 15, 2008, for the 2009 quota
year, manufacturers of dosage form products containing ephedrine
reported sales totaling approximately 2,840 kg in 2007 and 1,291 kg in
2008; this represents a 55 percent decrease from sales reported by
these firms from 2007 to 2008. During the same period, exports of
ephedrine products from the U.S. as reported on export declarations
(DEA 486), totaled 168 kg in 2007 and 16 kg in 2008; this represents a
90 percent decrease from levels observed in 2007. DEA notes that the
import requirements are considered in respect to the sales of those
substances or products produced there from. DEA notes for 2009 that DEA
registered dosage form manufacturers requested authority to purchase a
total of 921 kg of ephedrine which suggests that demand is expected to
decrease again in 2009.
Ephedrine Calculation
DEA calculated the 2009 Assessment of Annual Needs for ephedrine as
follows. DEA developed a calculation that considers the criteria
defined in 21 U.S.C. 826: estimated medical, scientific, research, and
industrial needs of the U.S.; lawful export requirements; and the
establishment and maintenance of reserve stocks.
In determining the needs of the U.S., DEA noted that the estimated
2008 sales of ephedrine of 1,291 kg are consistent with the IMS NSP-
reported average sales of ephedrine of 1,261 kg. DEA thus believes that
1,291 kg fairly represents the U.S. needs for 2009. For the
establishment and maintenance of reserve stocks, DEA notes that 21 CFR
1315.24 allows for an inventory allowance (reserve stock) of 50% of a
manufacturer's estimated sales. In determining the inventory allowance,
however, DEA also considered the anticipated 2008 year end inventory as
reported by DEA registrants.
DEA calculated the ephedrine (for sale) assessment by the following
methodology:
2008 sales + reserve stock + export requirement - existing inventory =
AAN 1,291 + (50%*1,291) + 16 - 468 = 1,485 kg ephedrine (for sale) for
2009
This calculation suggests that DEA's Assessment of Annual Needs for
ephedrine should have been proposed to be 1,500 kg rather than the
2,500 kg actually proposed. Although DEA will revise the assessment of
annual needs at least once during the 2009 calendar year, DEA's
experience in the establishment of quotas has been to build a safety
reserve into the assessment in the event that a DEA registered
manufacturer failed to provide a timely quota application for DEA's
consideration. As this notice provides for an opportunity to comment
DEA is not including this safety reserve for those applicants who have
failed to provide a timely application. DEA notes in its calculated
assessment DEA provides for 50% reserve stock. All interested parties
are invited to comment on the assessment.
Accordingly, DEA is establishing on an interim basis the Assessment
of Annual Needs for ephedrine (for sale) as 1,500 kg.
Comment Regarding DEA's Proposed Assessment for Phenylpropanolamine
(for conversion)
The commenter, a manufacturer that converts phenylpropanolamine to
amphetamine requested DEA to consider its individual requirement for
phenylpropanolamine (for conversion) in fixing the final assessment of
annual needs.
DEA Response
A summary of the underlying data from quota applications and other
sources, as well as DEA's analysis of that data, are provided below in
response to this commenter's request for consideration of its revised
requirements in determining the phenylpropanolamine (for conversion)
assessment.
Phenylpropanolamine (for conversion) data
[[Page 79511]]
Phenylpropanolamine (for Conversion) Data for 2009 Assessment of Annual Needs
[Kilograms]
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2009
Phenylpropanolamine (for conversion) 2006 2007 2008 \5\ Request
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Sales* (DEA 250)............................................ 8,004 13,712 16,923 16,522
Imports** (DEA 488)......................................... 15,594 7,731 16,367 2,525
Export Declarations (DEA 486)............................... 0 0 0 n/a
Inventory* (DEA 250)........................................ 4,863 3,021 4,566 n/a
APQ Amphetamine***.......................................... 17,000 22,000 22,000 n/a
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* Reported sales and inventory from applications for 2009 procurement quotas (DEA 250) received as of July 15,
2008.
** Reported imports from applications for 2009 import quotas (DEA 488) received as of July 15, 2008.
*** Amphetamine Aggregate Production Quota History http://www.deadiversion.usdoj.gov/quotas/quota_history.htm
At the time \5\ DEA drafted the 2009 proposed assessment (i.e.,
July 15, 2008), DEA reviewed procurement quota applications received
from DEA registered manufacturers of phenylpropanolamine (for
conversion). These firms requested the authority to purchase a total of
16,522 kg phenylpropanolamine (for conversion). Additionally DEA
reviewed import quota applications from DEA registered importers
requesting the authority to import a total of 2,525 kg of
phenylpropanolamine (for conversion). DEA had not received any requests
to synthesize phenylpropanolamine in 2009.
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\5\ 2008 data represents estimated sales, imports, and
inventories as reported on applications for quotas.
\6\ 2008 data represents estimated sales, imports, and
inventories as reported on applications for quotas.
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The commenter requested DEA to consider the commenter's increased
revised requirements of 1,894 kg. DEA in its proposal considered the
commenter's initial quota request in its original assessment for
phenylpropanolamine (for conversion). Based on the upward revised
requirements of the commenter, DEA registered manufacturers have
requested the authority to purchase a total of 18,416 kg (16,522 kg +
1,894 kg) phenylpropanolamine (for conversion).
DEA determined that 18,416 kg of phenylpropanolamine (for
conversion) would be insufficient to meet the historical requirements
of phenylpropanolamine for the production of amphetamine as established
by DEA as the Aggregate Production Quota (APQ) for amphetamine (i.e.,
22,000 kg for 2008). This amount 18,416 kg would be sufficient to
manufacture 30% of the APQ of amphetamine (i.e., 22,000 kg for 2008).
DEA further considered manufacturer's conversion yields of
phenylpropanolamine to amphetamine of 50% in its calculation of the
phenylpropanolamine assessment. DEA calculated the phenylpropanolamine
(for conversion) assessment by the following methodology:
(2008 APQ / 50% yield) + reserve stock-inventory = AAN
(22,000 / 50% yield) + 50%*(22,000 / 50% yield)-4,566 = 61,434 kg
PPA (for conversion) for 2009
This calculation suggests that DEA's Assessment of Annual Needs for
phenylpropanolamine (for conversion) should have been proposed as
62,000 kg rather than the 50,000 kg actually proposed. This upwards
revision of the phenylpropanolamine assessment provides for a 50%
inventory allowance which was not considered in DEA's original
assessment.
After consideration of this comment, DEA is establishing, on an
interim basis the Assessment of Annual Needs for phenylpropanolamine
(for conversion) as 62,000 kg.
Pseudoephedrine, Ephedrine (for conversion), and Phenylpropanolamine
for Sale
DEA did not receive any comments on its proposed Assessment of
Annual Needs for ephedrine (for conversion), phenylpropanolamine (for
sale), and pseudoephedrine (for sale). However, DEA is providing the
underlying data and methodologies used in determining the assessment
for these list I chemicals. In determining the assessments for
pseudoephedrine (for sale) and phenylpropanolamine (for sale), DEA
utilized the same general methodology and calculation as was described
for the assessment of ephedrine (for sale), above. For ephedrine (for
conversion), DEA utilized the same general methodology and calculation
as was described for the assessment of phenylpropanolamine (for
conversion), above. DEA is providing an additional opportunity for
comments regarding these assessments.
Pseudoephedrine (for Sale) Data
Pseudoephedrine (for Sale) Data for 2009 Assessment of Annual Needs
[Kilograms]
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2009
Pseudoephedrine (for sale) 2006 2007 2008 \6\ Request
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Sales* (DEA 250)............................................ 157,205 242,043 225,898 148,992
Sales* (DEA 189)............................................ 56,563 99,902 65,650 105,967
Imports** (DEA 488)......................................... 125,269 241,264 235,682 27,905
Export Declarations (DEA 486)............................... 37,069 42,142 41,459 n/a
Inventory* (DEA 250)........................................ 84,937 65,148 4,566 n/a
IMS*** (NSP)................................................ 207,499 183,333 n/a n/a
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* Reported sales and inventory from applications for 2009 procurement quotas (DEA 250) and manufacturing quotas
(DEA 189) received as of July 15, 2008.
** Reported imports from applications for 2009 import quotas (DEA 488) received as of July 15, 2008.
*** IMS Health, IMS National Sales PerspectivesTM, January 2006 to December 2007, Retail and Non-Retail
Channels, Data Extracted July 15, 2008.
[[Page 79512]]
Pseudoephedrine (for sale) Analysis
DEA utilized the same general methodology and calculation to
establish the assessment for pseudoephedrine (for sale) as was
described for the assessment of ephedrine (for sale), above.
At the time DEA drafted the 2009 proposed assessments (i.e., July
15, 2008), DEA registered manufacturers dosage form products containing
pseudoephedrine reported sales totaling approximately 242,043 kg in
2007 and 225,898 kg in 2008; this represents a seven percent decrease
from sales reported by these firms from 2007 to 2008. During the same
period exports of pseudoephedrine products from the U.S. as reported on
export declarations (DEA 486), totaled 42,142 kg in 2007 and 41,459 kg
in 2008; this represents a two percent decrease from levels observed in
2007. Additionally, DEA considered information on trends in the
national rate of net disposals from sales data provided by IMS Health's
National Sales PerspectiveTM (NSP) database. IMS NSP data
reported the average sales volume of pseudoephedrine for the calendar
years 2006 and 2007 to be approximately 195,416 kg. DEA in considering
the manufacturers reported sales thus believes that 225,898 kg fairly
represents the U.S. sales of pseudoephedrine for 2009 and that 41,459
kg fairly represents the export requirements of pseudoephedrine.
DEA calculated the pseudoephedrine (for sale) assessment by the
following methodology:
2008 sales + reserve stock + export requirement-existing inventory =
AAN
225,898 + (50%*225,898) + 41,459 - 4,566 = 375,740 kg pseudoephedrine
(for sale) for 2009
This calculation suggests that DEA's Assessment of Annual Needs for
pseudoephedrine (for sale) should have been proposed to be 380,000 kg
rather than the 415,000 kg actually proposed in the September 19, 2008,
notice. Under this rulemaking DEA is establishing, on an interim basis,
the Assessment of Annual Needs for pseudoephedrine (for sale) as
380,000 kg.
Ephedrine (for Conversion) Data
Ephedrine (for Conversion) Data for 2009 Assessment of Annual Needs
[Kilograms]
----------------------------------------------------------------------------------------------------------------
2009
Ephedrine (for conversion) 2006 2007 2008 \7\ Request
----------------------------------------------------------------------------------------------------------------
Sales* (DEA 250)............................................ 50,107 100,256 69,576 111,282
Imports** (DEA 488)......................................... 297,941 112,302 81,897 110,382
Inventory* (DEA 250)........................................ 5,605 135 10,913 n/a
APQ Methamphetamine***...................................... 3,130 3,130 3,130 n/a
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* Reported sales and inventory from applications for 2009 procurement quotas (DEA 250) and manufacturing quotas
(DEA 189) received as of July 15, 2008.
** Reported imports from applications for 2009 import quotas (DEA 488) received as of July 15, 2008.
*** Methamphetamine Aggregate Production Quota History http://www.deadiversion.usdoj.gov/quotas/quota_history.htm
Ephedrine (for Conversion) Analysis
For ephedrine (for conversion), DEA utilized the same general
methodology and calculation as was described for the assessment of
phenylpropanolamine (for conversion), above.
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\7\ 2008 data represents estimated sales, imports, and
inventories as reported on applications for quotas.
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At the time DEA drafted the 2009 proposed assessment (i.e., July
15, 2008), DEA considered applications for procurement quotas from DEA
registered manufacturers of ephedrine (for conversion). These firms
requested the authority to purchase a total of 111,282 kg ephedrine
(for conversion) for the manufacture of two substances: Methamphetamine
and pseudoephedrine.
The assessment of need for these two substances (methamphetamine
and pseudoephedrine) are determined by DEA as the Aggregate Production
Quota (APQ) for methamphetamine and as the estimated sales of
pseudoephedrine as referenced in the 2008 Annual Assessment of Need
(AAN) for pseudoephedrine. DEA in its methodology considered the
ephedrine (for conversion) requirements for the manufacture of these
two substances: methamphetamine and pseudoephedrine. DEA further
considered the reported conversion yields of these substances. These
firms reported a conversion yield of 39% for the synthesis of
methamphetamine. DEA cannot disclose the conversion yield for the
synthesis of pseudoephedrine because this information is proprietary to
the one manufacturer involved in this type of manufacturing.
The sum total of these manufacturing requirements therefore is the
ephedrine (for conversion) assessment. DEA determined these established
assessments for the manufacture of these two substances are the best
indicators of ephedrine (for conversion). Reported sales of ephedrine
(for conversion) are included as reference to DEA's proposed
methodology.
DEA calculated the ephedrine (for conversion) assessment by the
following methodology:
methamphetamine requirement + pseudoephedrine requirement = AAN
The calculation for the ephedrine (for conversion) requirements for
the manufacture of methamphetamine are as follows:
(2008 APQ methamphetamine/39% yield) + reserve stock - inventory =
ephedrine (for manufacture of methamphetamine) (3,130/39% yield) +
50%*(3,130/39% yield) - 10,913 = 1,125 kg
The calculation for the ephedrine (for conversion) requirements for
the manufacture of pseudoephedrine leads to a result of 106,424 kg. DEA
cannot provide the details of the calculation because this would reveal
the conversion yield for the synthesis of pseudoephedrine, which is
proprietary to the one manufacturer involved in this type of
manufacturing.
Therefore, the assessment for ephedrine was determined by the sum
total of the ephedrine (for conversion) requirements as described by
the following methodology:
methamphetamine requirement + pseudoephedrine requirement = AAN
1,125 + 106,424 = 107,549 kg ephedrine (for conversion) for 2009
DEA is establishing, on an interim basis, the Assessment of Annual
Needs for ephedrine (for conversion) as 110,000 kg, as originally
proposed. DEA will revise the assessment of annual needs at least once
during the 2009 calendar year.
[[Page 79513]]
Phenylpropanolamine (for Sale) Data
Phenylpropanolamine (for Sale) Data for 2009 Assessment of Annual Needs
[Kilograms]
----------------------------------------------------------------------------------------------------------------
2009
Phenylpropanolamine (for sale) 2006 2007 2008 \8\ Request
----------------------------------------------------------------------------------------------------------------
Sales* (DEA 250)............................................ 4,718 5,502 3,938 6,721
Imports** (DEA 488)......................................... 5,751 5,714 4,400 7,532
Export Declarations (DEA 486)............................... 0 1,002 0 n/a
Inventory* (DEA 250)........................................ 3,617 4,439 1,405 n/a
----------------------------------------------------------------------------------------------------------------
* Reported sales and inventory from applications for 2009 procurement quotas (DEA 250) and manufacturing quotas
(DEA 189) received as of July 15, 2008.
** Reported imports from applications for 2009 import quotas (DEA 488) received as of July 15, 2008.
Phenylpropanolamine (for Sale) Analysis
DEA utilized the same general methodology and calculation to
establish the assessment for phenylpropanolamine (for sale) as was
described for the assessment\8\ of ephedrine (for sale), above.
---------------------------------------------------------------------------
\8\ 2008 data represents estimated sales, imports, and
inventories as reported on applications for quotas. Import and
export declarations data extracted July 15, 2008.
---------------------------------------------------------------------------
At the time DEA drafted the 2009 proposed assessments (i.e., July
15, 2008), DEA registered manufacturers dosage form products containing
phenylpropanolamine reported sales totaling approximately 4,718 in 2006
and 5,502 kg in 2007 and 3,938 kg in 2008; this represents a 28 percent
decrease from sales reported by these firms from 2007 to 2008 and a 17%
decrease from 2006 to 2008. DEA notes phenylpropanolamine is sold
primarily as a veterinary product for the treatment for canine
incontinence and is not FDA approved for human consumption. IMS NSP
Health Data does not capture sales of phenylpropanolamine to these
channels and is therefore not included. DEA in considering the
manufacturers reported sales thus believes that 3,983 kg fairly
represents the U.S. sales of phenylpropanolamine for 2009.
DEA calculated the phenylpropanolamine (for sale) assessment by the
following methodology:
2008 sales + reserve stock + export requirement - existing inventory =
AAN
3,938 + (50%*3,938) + 0 - 1,405 = 4,502 kg phenylpropanolamine (for
sale) for 2009
This calculation suggests that DEA's Assessment of Annual Needs for
phenylpropanolamine (for sale) should have been proposed to be 4,500 kg
rather than the 7,500 kg actually proposed. As noted above, DEA is no
longer including a safety reserve into the assessment because DEA
clearly demonstrates the data and methodology with which DEA calculated
the assessment. Further, this notice provides for an opportunity to
comment.
DEA is establishing, on an interim basis the Assessment of Annual
Needs for phenylpropanolamine (for sale) as 4,500 kg. For each of the
established assessments, DEA will revise the assessment of annual needs
at least once during the 2009 calendar year.
Conclusion
Based on information provided in the comments, along with
information provided by DEA-registered manufacturers and importers of
these List I chemicals on applications for individual import,
manufacturing, and procurement quotas pursuant to DEA regulations, DEA
is publishing this notice establishing the assessment of annual needs
effective January 1, 2009, on an interim basis. DEA believes that
without the publication of this notice on an interim basis, DEA would
be unable to issue quotas for the import and manufacture of the List I
chemicals ephedrine, pseudoephedrine, and phenylpropanolamine. Without
such quotas, regulated industry would be prevented from importing and
manufacturing activities involving these chemicals.
Therefore, under the authority vested in the Attorney General by
Section 306 of the CSA (21 U.S.C. 826), and delegated to the
Administrator of the DEA by 28 CFR 0.100, and redelegated to the Deputy
Administrator pursuant to 28 CFR 0.104, the Deputy Administrator hereby
orders that the 2009 Assessment of Annual Needs for ephedrine,
pseudoephedrine, and phenylpropanolamine, expressed in kilograms of
anhydrous acid or base, be established as follows:
------------------------------------------------------------------------
Established 2009
List I chemical assessment of
annual needs
------------------------------------------------------------------------
Ephedrine (for sale)................................. 1,500
Ephedrine (for conversion)........................... 110,000
Pseudoephedrine (for sale)........................... 380,000
Phenylpropanolamine (for sale)....................... 4,500
Phenylpropanolamine (for conversion)................. 62,000
------------------------------------------------------------------------
Regulatory Certifications
Administrative Procedure Act (5 U.S.C. 553)
The Administrative Procedure Act (APA) generally requires that
agencies, prior to issuing a new rule, publish a notice of proposed
rulemaking in the Federal Register. The APA also allows exceptions from
this requirement when ``the agency for good cause finds (and
incorporates the finding and a brief statement of reasons therefore in
the rules issued) that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest.'' 5
U.S.C. 553(b)(B).
The CMEA of 2005 specifically amended 21 U.S.C. 826 to mandate the
establishment of production quotas for the List I chemicals ephedrine,
pseudoephedrine, and phenylpropanolamine. DEA has no discretion in this
requirement and has established the same system of production quotas
for these three List I chemicals as is currently established for
controlled substances in Schedules I and II. Further, the CMEA amended
21 U.S.C. 952 to prohibit all importation of ephedrine,
pseudoephedrine, and phenylpropanolamine except such amounts as the
Attorney General finds to be necessary for medical, scientific, or
other legitimate purposes. The Act further amended Sec. 952 regarding
import quotas for these three List I chemicals.
Taken together, Sec. Sec. 826 and 952 require that DEA establish
aggregate production quotas, herein referred to as an Assessment of
Annual Needs, for these List I chemicals. Further, taken
[[Page 79514]]
together, Sec. Sec. 826 and 952 require that DEA issue individual
import and manufacturing quotas to registrants registered to import or
manufacture ephedrine, pseudoephedrine, and phenylpropanolamine who
apply for, and are granted, such individual quotas. As section 826
indicates, the Assessment of Annual Needs is established for each
calendar year (21 U.S.C. 826(a)). The Attorney General, DEA by
delegation, is required ``to limit or reduce individual production
quotas to the extent necessary to prevent the aggregate of individual
quotas from exceeding the amount determined necessary each year by the
Attorney General,'' i.e., the Assessment of Annual Needs (21 U.S.C.
826(b)). Thus, individual manufacturing and import quotas for
ephedrine, pseudoephedrine, and phenylpropanolamine cannot be
calculated without the establishment of the Assessment of Annual Needs.
If DEA were not to establish the initial Assessment of Annual
Needs, while seeking additional comment, DEA would be unable to issue
individual quotas to importers and manufacturers who had applied for,
and were to be granted, such quotas. If DEA cannot issue such
individual quotas prior to January 1, 2009, importers and manufacturers
will have no means by which to acquire the List I chemicals ephedrine,
pseudoephedrine, or phenylpropanolamine necessary for them to conduct
business.
DEA believes that it is in the public interest to ensure that
importers and manufacturers of products containing ephedrine,
pseudoephedrine, and phenylpropanolamine be able to obtain these List I
chemicals on and after January 1, 2009. DEA wishes to ensure that
products containing these List I chemicals remain available to the
public while interested parties are provided with further opportunity
to comment on DEA's Assessment of Annual Needs. To ensure availability
of these products, and to ensure continued legitimate commerce,
including the importation and manufacture of products containing these
List I chemicals, DEA finds good cause to publish this Assessment of
Annual Needs on an interim basis while seeking additional comment. In
so doing, DEA recognizes that exceptions to the APA's notice and
comment procedures are to be ``narrowly construed and only reluctantly
countenanced.'' Am. Fed'n of Gov't Employees v. Block, 655 F2d 1153,
1156 (D.C. Cir. 1981) (quoting New Jersey Dep't of Envtl. Prot. v. EPA,
626 F.2d 1038, 1045 (D.C. Cir. 1980)).
Under 5 U.S.C. 553(d), DEA must generally provide a 30-day delayed
effective date for final rules. DEA may dispense with the 30-day
delayed effective date requirement ``for good cause found and published
with the rule.'' DEA believes that good cause exists to make this
Interim Assessment of Annual Needs with Request for Comment effective
January 1, 2009. As DEA noted previously, the 2009 Assessment of Annual
Needs must be established, and individual quotas issued, on January 1,
2009, so as not to impede legitimate commerce in these List I chemicals
during the calendar year. DEA believes that good cause exists not to
delay the effective date of this notice by 30 days to ensure that the
Assessment of Annual Needs may be established, and individual import
and manufacturing quotas issued, by January 1, 2009.
Finally, DEA notes that the CSA and its implementing regulations
allow registrants who have applied for or received a manufacturing
quota to apply for an increase in that quota to meet the registrant's
estimated disposal, inventory, or other requirements during the
remainder of the year (21 U.S.C. 826(e), 21 CFR 1315.25(a),
1315.32(g)). Further, the CSA and its implementing regulations allow
registrants who are authorized to import ephedrine, pseudoephedrine, or
phenylpropanolamine to apply for an increase in the amount of the
chemical the registrant is authorized to import (21 U.S.C. 952(d), 21
CFR 1315.36(b)). DEA notes that registrants may use these provisions to
request increases in individual manufacturing and import quotas,
respectively, pending any revisions of this Interim Assessment.
Regulatory Flexibility Act
The Deputy Administrator hereby certifies that this action will not
have a significant economic impact on a substantial number of small
entities whose interests must be considered under the Regulatory
Flexibility Act, 5 U.S.C. 601-612. The establishment of the assessment
of annual needs for ephedrine, pseudoephedrine, and phenylpropanolamine
is mandated by law. The assessments are necessary to provide for the
estimated medical, scientific, research, and industrial needs of the
U.S., for lawful export requirements, and the establishment and
maintenance of reserve stocks. Accordingly, the Deputy Administrator
has determined that this action does not require a regulatory
flexibility analysis.
Executive Order 12866
The Office of Management and Budget has determined that notices of
assessment of annual needs are not subject to centralized review under
Executive Order 12866.
Executive Order 13132
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 federalism implications
warranting the application of Executive Order 13132.
Executive Order 12988
This action meets the applicable standards set forth in Sections
3(a) and 3(b)(2) of Executive Order 12988 Civil Justice Reform.
Unfunded Mandates Reform Act of 1995
This action will not result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of
$120,000,000 or more (adjusted for inflation) in any one year, and will
not significantly or uniquely affect small governments. Therefore, no
actions were deemed necessary under the provisions of the Unfunded
Mandates Reform Act of 1995.
Congressional Review Act
This action is not a major rule as defined by Section 804 of the
Small Business Regulatory Enforcement Fairness Act of 1996. 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 U.S.-based companies to compete with
foreign-based companies in domestic and export markets.
Dated: December 19, 2008.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E8-30808 Filed 12-24-08; 8:45 am]
BILLING CODE 4410-09-P