[Federal Register Volume 85, Number 146 (Wednesday, July 29, 2020)]
[Proposed Rules]
[Pages 45547-45551]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15635]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1301

[Docket No. DEA-574]
RIN 1117-AB57


Reporting of Theft or Significant Loss of Controlled Substances

AGENCY: Drug Enforcement Administration, Department of Justice.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule would amend Drug Enforcement Administration 
(DEA) regulations regarding DEA Form 106, used by DEA registrants to 
report thefts or significant losses of controlled substances, to 
clarify that all such forms must be submitted electronically. In 
addition, the proposed rule would add new requirements for the form to 
be submitted accurately and within a 15-day time period. This proposed 
rule will

[[Page 45548]]

not change the requirement that registrants notify the DEA Field 
Division Office in their area, in writing, of the theft or significant 
loss of any controlled substances within one business day of discovery 
of such loss or theft.

DATES: Comments must be submitted electronically or postmarked on or 
before September 28, 2020. Commenters should be aware that the 
electronic Federal Docket Management System will not accept any 
comments after 11:59 p.m. Eastern Time on the last day of the comment 
period.
    All comments concerning collection of information under the 
Paperwork Reduction Act must be submitted to the Office of Management 
and Budget (OMB) on or before September 28, 2020.

ADDRESSES: To ensure proper handling of comments, please reference 
``Docket No. DEA-574'' on all electronic and written correspondence, 
including any attachments.
     Electronic comments: The Drug Enforcement Administration 
encourages that all comments be submitted electronically through the 
Federal eRulemaking Portal, which provides the ability to type short 
comments directly into the comment field on the web page or attach a 
file for lengthier comments. Please go to http://www.regulations.gov 
and follow the online instructions at that site for submitting 
comments. Upon completion of your submission, you will receive a 
Comment Tracking Number for your comment. Please be aware that 
submitted comments are not instantaneously available for public view on 
Regulations.gov. If you have received a Comment Tracking Number, your 
comment has been successfully submitted and there is no need to 
resubmit the same comment.
     Paper comments: Paper comments that duplicate electronic 
submissions are not necessary. Should you wish to mail a paper comment, 
in lieu of an electronic comment, it should be sent via regular or 
express mail to: Drug Enforcement Administration, Attn: DEA Federal 
Register Representative/DPW, 8701 Morrissette Drive, Springfield, 
Virginia 22152.
     Paperwork Reduction Act Comments: All comments concerning 
collections of information under the Paperwork Reduction Act must be 
submitted to the Office of Information and Regulatory Affairs, OMB, 
Attention: Desk Officer for DOJ, 725 17th Street NW, Washington, DC 
20503. Please state that your comment refers to RIN 1117-AB57/Docket 
No. DEA-547.

FOR FURTHER INFORMATION CONTACT: Scott A. Brinks, Regulatory Drafting 
and Policy Support Section (DPW), Diversion Control Division, Drug 
Enforcement Administration; Mailing Address: 8701 Morrissette Drive, 
Springfield, Virginia 22152; Telephone: (571) 362-3261.

SUPPLEMENTARY INFORMATION: 

Posting of Public Comments

    Please note that all comments received in response to this docket 
are considered part of the public record. They will, unless reasonable 
cause is given, be made available by the Drug Enforcement 
Administration (DEA) for public inspection online at http://www.regulations.gov. Such information includes personal identifying 
information (such as your name, address, etc.) voluntarily submitted by 
the commenter. The Freedom of Information Act applies to all comments 
received. If you want to submit personal identifying information (such 
as your name, address, etc.) as part of your comment, but do not want 
it to be made publicly available, you must include the phrase 
``PERSONAL IDENTIFYING INFORMATION'' in the first paragraph of your 
comment. You must also place all of the personal identifying 
information you do not want made publicly available in the first 
paragraph of your comment and identify what information you want 
redacted.
    If you want to submit confidential business information as part of 
your comment, but do not want it to be made publicly available, you 
must include the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the 
first paragraph of your comment. You must also prominently identify the 
confidential business information to be redacted within the comment.
    Comments containing personal identifying information or 
confidential business information identified as directed above will be 
made publicly available in redacted form. If a comment has so much 
confidential business information that it cannot be effectively 
redacted, all or part of that comment may not be made publicly 
available. Comments posted to http://www.regulations.gov may include 
any personal identifying information (such as name, address, and phone 
number) included in the text of your electronic submission that is not 
identified as directed above as confidential.
    An electronic copy of this proposed rule is available at http://www.regulations.gov for easy reference.

Background and Legal Authority

    The Controlled Substances Act (CSA) authorizes the Administrator of 
DEA (by delegation from the Attorney General) to promulgate rules and 
regulations relating to the registration and control of the 
manufacture, distribution, and dispensing of controlled substances; 
maintenance and submission of records and reports; and for the 
efficient execution of his statutory functions. 21 U.S.C. 821, 827, 
871(b). Currently, 21 CFR 1301.74(c) requires a non-practitioner 
registrant to notify DEA's Field Division Office in his or her area, in 
writing, of any theft or significant loss of any controlled substances 
within one business day upon discovery of such theft or loss. The 
provision stipulates this same notification requirement and one-day 
time period regarding in-transit losses of controlled substances for 
suppliers, importers, and exporters with certain exceptions. In 
addition to the requirement to notify DEA within one business day of 
the discovery of a theft or loss, this provision requires a non-
practitioner registrant to complete and submit to the same field 
division office a DEA Form 106 regarding the theft or loss. This 
provision is silent as to the actual submission method of the DEA Form 
106 (e.g., mail, hand delivery, electronic) and the time period in 
which these reports are due. This proposed rule will not change the 
requirement that registrants notify the Field Division Office of the 
Administration in their area, in writing, of the theft or significant 
loss of any controlled substances within one business day of discovery 
of such loss or theft.
    Similarly, 21 CFR 1301.76(b) currently requires practitioner 
registrants to notify DEA's Field Division Office in his area, in 
writing, of the theft or significant loss of any controlled substances 
within one business day upon discovery of the theft or loss; and to 
complete and submit DEA Form 106 to the same Field Division Office. 
Again, this provision is silent as to the actual submission method of 
DEA Form 106 and the due date for this report.
    This proposed rule will not change the requirement under 21 CFR 
1301.74(c) and 1301.76(b), respectively, that non-practitioner and 
practitioner registrants notify DEA's Field Division Office in their 
area, in writing, of the theft or significant loss of any controlled 
substances within one business day of discovery of such loss or theft.
    Currently, 99.5 percent of all DEA Form 106 submissions are 
completed electronically via DEA's secure website. The remaining 0.5 
percent of form submissions are completed by paper. See Regulatory 
Analyses section for additional information.

[[Page 45549]]

Amendments To Revise Submission Process for DEA Form 106

    This proposed rule would set a 15-day calendar period for 
submitting a complete and accurate DEA Form 106 and clarify the form 
submission process, requiring all forms be submitted electronically. 
This would match the submission process for DEA Form 107, a form used 
by regulated persons \1\ to report loss or disappearance of listed 
chemicals. As set forth in 21 CFR 1310.05(b)(1), a regulated person 
must file a complete and accurate DEA Form 107 with DEA through the DEA 
Diversion Control Diversion secure network application (available on 
the DEA Diversion Control Division website) within 15 calendar days 
after discovery of the circumstances requiring the report.
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    \1\ The term ``regulated person'' is defined at 21 U.S.C. 
802(38).
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    These proposed changes would make clear to registrants that all DEA 
Form 106 submissions must go through the secure online database, and 
physical copies will no longer be accepted. Through the secure online 
database, forms will be more easily submitted and organized.\2\
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    \2\ https://www.deadiversion.usdoj.gov/21cfr_reports/theft/index.html.
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Regulatory Analyses

Executive Orders 12866, 13563, and 13771, Regulatory Planning and 
Review, Improving Regulation and Regulatory Review, and Reducing 
Regulation and Controlling Regulatory Costs

    This proposed rule was developed in accordance with the principles 
of Executive Orders (E.O.s) 12866, 13563, and 13771. E.O. 12866 directs 
agencies to assess all costs and benefits of available regulatory 
alternatives and, if regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health, and safety effects; distributive impacts; 
and equity). E.O. 13563 is supplemental to and reaffirms the 
principles, structures, and definitions governing regulatory review as 
established in E.O. 12866. E.O. 12866 classifies a ``significant 
regulatory action,'' requiring review by the Office of Management and 
Budget (OMB), as any regulatory action that is likely to result in a 
rule that may: (1) Have an annual effect on the economy of $100 million 
or more or adversely affect in a material way the economy, a sector of 
the economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities; (2) create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the E.O. DEA has 
determined that this proposed rule is not a ``significant regulatory 
action'' under E.O. 12866, section 3(f).

Analysis of Benefits and Costs

    DEA has examined the benefits and costs of this proposed rule. 
Currently, 99.5 percent of all DEA Form 106 reports are reported 
electronically via DEA's secure website. This proposed rule will impact 
the remaining 0.5 percent of responses that are reported by paper 
representing 181 of a total of 37,047 responses. Benefits include costs 
savings, as discussed in the following paragraphs, and increased 
simplicity in reporting theft and loss on controlled substances and 
clarity in the regulations. This proposed rule will add clarity to the 
submission method by matching the submission process and requirements 
for ``Reports of Loss or Disappearance of Listed Chemicals''--DEA Form 
107. Additionally, electronic submissions will allow all report 
submissions to be received more quickly and stored in a central 
database, as well as allow for analysis.
    There is no new cost associated with this proposed rule. The labor 
burden to submit DEA Form 106 is estimated to be the same for 
electronic and paper submissions. However, DEA anticipates there will 
be cost savings associated with electronic submissions. Some cost 
savings are described qualitatively and some are quantified. From 
submissions received in 2018, DEA estimates approximately 181 paper 
submissions per year. Many of these paper forms contain illegible or 
erroneous information, requiring DEA to call respondents to correct or 
clarify the information in the paper form, consuming both DEA's and the 
respondent's time and resources. Electronic submissions are expected to 
virtually eliminate the requirement for DEA to call back the respondent 
for clarifications of form data. As DEA has not tracked the number of 
call backs or the average duration of calls, DEA does not have a strong 
basis to quantify the cost savings.
    This proposed rule would eliminate the need to print paper forms 
and transmit by mail or courier service. DEA estimates there will be a 
cost savings of $0.63, $0.55 for postage plus $0.08 for an envelope, or 
a total of $114 per year for an estimated 181 responses per year. DEA 
assumes the cost savings associated with not having to print is 
negligible.
    In summary, DEA estimates the economic impact of this proposed rule 
is de minimis.
    E.O. 13771 was issued on January 30, 2017, and published in the 
Federal Register on February 3, 2017.\3\ Section 2(a) of E.O. 13771 
requires an agency, unless prohibited by law, to identify at least two 
existing regulations to be repealed when the agency publicly proposes 
for notice and comment or otherwise promulgates a new regulation. In 
furtherance of this requirement, Section 2(c) of E.O. 13771 requires 
that the new incremental costs associated with new regulations, to the 
extent permitted by law, be offset by the elimination of existing costs 
associated with at least two prior regulations. DEA expects this 
proposed rule will not be considered an E.O. 13771 regulatory action. 
The estimated economic impact of proposed rule is de minimis.
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    \3\ 82 FR 9339.
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Executive Order 12988, Civil Justice Reform

    This proposed regulation meets the applicable standards set forth 
in sections 3(a) and 3(b)(2) of E.O. 12988 Civil Justice Reform to 
eliminate drafting errors and ambiguity, minimize litigation, provide a 
clear legal standard for affected conduct, and promote simplification 
and burden reduction.

Executive Order 13132, Federalism

    This proposed rulemaking does not have federalism implications 
warranting the application of E.O. 13132. The proposed rule does not 
have substantial direct effects on the States, on the relationship 
between the National Government and the States, or the distribution of 
power and responsibilities among the various levels of government.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This proposed rule does not have tribal implications warranting the 
application of E.O. 13175. This proposed rule does not have substantial 
direct effects on one or more Indian tribes, on the relationship 
between the Federal Government and Indian tribes, or on the 
distribution of power and responsibilities between the Federal 
Government and Indian tribes.

[[Page 45550]]

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA), DEA has 
reviewed the economic impact of this proposed rule on small entities. 
DEA's economic impact evaluation indicates that the rule will not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities unless it can certify that the rule will not have a 
significant impact on a substantial number of small entities. For the 
purposes of the RFA, small entities include small businesses, nonprofit 
organizations, and small governmental jurisdictions. DEA has analyzed 
the economic impact of each provision of this proposed rule and 
estimates that the proposed rule will have minimal economic impact on 
affected entities, including small entities.
    This proposed rule would amend regulations regarding DEA Form 106 
to clarify that all submissions of the form must be submitted online. 
Based on actual submissions in 2018, DEA estimates there are 181 paper 
submissions per year, submitted by six entities: One distributor, two 
pharmacies, one researcher, one veterinarian service entity, and one 
hospital.
    DEA estimates the affected entities are in the following North 
American Industry Classification System (NAICS) industries:
     424210--Drugs and Druggists' Sundries Merchant Wholesalers
     446110--Pharmacies and Drug Stores
     541712--Research and Development in the Physical, 
Engineering, and Life Sciences (except Biotechnology)
     541940--Veterinary Services
     622110--General Medical and Surgical Hospitals
    The U.S. Census Bureau's Statistics of U.S. Businesses (SUSB) is an 
annual series that provides economic data by enterprise size and 
industry. SUSB data contains the number of firms for various employment 
or revenue size ranges for each industry. Comparing the size ranges to 
the U.S. Small Business Administration (SBA) size standards, DEA 
estimated the number of entities in each affected industry, number of 
small entities in each affected industry, and number of affected small 
entities. The table below summarizes the results.

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                                                                                                                                             Number of
                NAICS                           Description                Number of firms         SBA size standards        Number of    affected small
                                                                                                                          small entities     entities
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424210...............................  Drugs and Druggists' Sundries  6,833...................  250 employees...........           6,569               0
                                        Merchant Wholesalers.
446110...............................  Pharmacies and Drug Stores...  18,852..................  $30.0 million *.........          18,503               0
541715...............................  Research and Development in    9,864...................  1,000 employees.........           9,325               0
                                        the Physical, Engineering,
                                        and Life Sciences (except
                                        Biotechnology).
541940...............................  Veterinary Services..........  27,708..................  $8.0 million *..........          27,564               1
622110...............................  General Medical and Surgical   2,904...................  $41.5 million *.........           1,199               0
                                        Hospitals.
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* Annual revenue.
Sources: 2016 SUSB Annual Datasets by Establishment Industry, ``U.S. & states, NAICS, detailed employment sizes (U.S., 6-digit and states, NAICS
  sectors).'' https://www.census.gov/data/datasets/2016/econ/susb/2016-susb.html. (Accessed 1/14/2020.) 2012 SUSB Annual Data Tables by Establishment
  Industry, ``U.S., 6-digit NAICS.'' https://www.census.gov/data/tables/2012/econ/susb/2012-susb-annual.html. (Accessed 1/14/2020.) U.S. Small Business
  Administration, Table of size standards, effective Aug 19, 2019. https://www.sba.gov/document/support--table-size-standards. (Accessed 1/14/2020.)

    There is no new cost associated with this proposed rule. The labor 
burden to submit DEA Form 106 is estimated to be the same for 
electronic and paper submissions. However, DEA anticipates there will 
be cost savings associated with electronic submissions. Some cost 
savings are described qualitatively and some are quantified. From 
submissions received in 2018, DEA estimates the one affected small 
entity submits one paper submission per year. Many of these paper forms 
contain illegible or erroneous information, requiring DEA to call 
respondents to correct or clarify the information in the paper form, 
consuming DEA's and the respondent's time and resources. Electronic 
submissions are expected to virtually eliminate the requirement for DEA 
to call back the respondent for clarifications of form data. As DEA has 
not tracked the number of call backs or the average duration of calls, 
DEA does not have a strong basis to quantify the cost savings.
    DEA estimates there will be a cost saving associated with 
eliminating the need to print paper forms and transmit by mail or 
courier service. The estimated cost savings is $0.63, $0.55 for postage 
plus $0.08 for an envelope, per paper submission.
    In summary, DEA estimates this rule will affect six entities who 
submit 181 paper DEA Forms 106. Of the affected six entities, one 
entity (veterinary services entity) is a small entity, submitting one 
paper form per year. The estimated cost savings for the affected small 
entity is minimal ($0.63 per year). Therefore, this proposed rule, if 
promulgated, will not have a significant economic impact on a 
substantial number of small entities.

Unfunded Mandates Reform Act of 1995

    On the basis of information contained in the ``Regulatory 
Flexibility Act'' section above, DEA has determined and certifies 
pursuant to the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 
1501 et seq., that this action would not result in any Federal mandate 
that may result ``in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of 
$100,000,000 or more (adjusted annually for inflation) in any 1 year * 
* * * .'' Therefore, neither a Small Government Agency Plan nor any 
other action is required under provisions of UMRA.

Paperwork Reduction Act

    Pursuant to the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 
3501-3521), DEA has identified the following collection of information 
related to this proposed rule. This action would modify existing 
collection 1117-0001 and DEA will be submitting the revision to OMB for 
approval. A person is not required to respond to a collection of 
information unless it displays a valid OMB control number. Copies of 
existing information collections approved by OMB may be obtained at 
https://www.reginfo.gov/. DEA has submitted this collection request to 
OMB for review and approval.

[[Page 45551]]

A. Collections of Information Associated With the Proposed Rule

    Title: Amending Regulations Regarding DEA Form 106
    OMB Control Number: 1117-0001
    Form Number: DEA-106
    DEA is proposing to amend its regulations for reporting thefts or 
significant losses of controlled substances to implement the 
requirement of electronic submissions for reporting the thefts or 
significant losses of controlled substances to clarify that all such 
reports must be submitted electronically within 15 days of discovery of 
the circumstances requiring the report. This amendment would clarify 
the submission process by aligning it with the current requirements of 
reporting losses of disappearance of listed chemicals on DEA Form 107 
and no longer accepting physical copies. Form 107 (OMB Control Number 
1117-0024) is also only submitted electronically, within 15 days of 
discovery of the circumstances requiring the report.
    Currently, 99.5 percent of all DEA Form 106 reports are reported 
electronically via DEA's secure website. This proposed rule will impact 
the remaining 0.5 percent of responses that are reported by paper. 
Electronic submissions are expected to virtually eliminate the 
requirement for DEA to call back the respondent for clarifications of 
form data. Furthermore, this proposed rule would eliminate the need for 
respondents to print paper forms and transmit by mail or courier 
service, resulting in cost savings for the 0.5 percent of responses per 
year transitioning from paper to electronic forms.
    The electronic submission would be filed with DEA through the DEA 
Diversion Control Diversion secure network application (available on 
the DEA Diversion Control Division website). The submissions of forms 
will be more easily submitted and organized through the secure 
database.
    The DEA estimates the following number of respondents and burden 
associated with this collection of information:
     Number of respondents: 10,693.
     Frequency of response: 3.4646 (calculated).
     Number of responses: 37,047.
     Burden per response: 0.3333 hours.
     Total annual hour burden: 12,349 hours.

B. Request for Comments Regarding the Proposed Collections of 
Information

    Written comments and suggestions from the public and affected 
entities concerning the proposed revision of this collection of 
information are encouraged. Under the PRA, DEA is required to provide a 
notice regarding the proposed collections of information in the Federal 
Register with the notice of proposed rulemaking and solicit public 
comment. Pursuant to section 3506(c)(2) of the PRA (44 U.S.C. 
3506(c)(2)), DEA is soliciting comment on the following issues related 
to this information of collection:
     Whether the proposed collection of information is 
necessary for the proper performance of the functions of DEA, including 
whether the information will have practical utility.
     The accuracy of DEA's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used.
     Recommendations to enhance the quality, utility, and 
clarity of the information to be collected.
     Recommendations to minimize the burden of the collection 
of information on those who are to respond, including through the use 
of automated collection techniques or other forms of information 
technology.
    Please send written comments to the Office of Information and 
Regulatory Affairs, OMB, Attention: Desk Officer for DOJ, 725 17th 
Street NW, Washington, DC 20503. Please state that your comments refer 
to RIN 1117-AB57/Docket No. DEA-574. All comments must be submitted to 
OMB on or before September 28, 2020. The final rule will respond to any 
OMB or public comments on the information collection requirements 
contained in this proposed rule.
    If you need a copy of the proposed information collection 
instrument(s) with instructions or additional information, please 
contact the Regulatory Drafting and Policy Support Section (DPW), 
Diversion Control Division, Drug Enforcement Administration; Mailing 
Address: 8701 Morrissette Drive, Springfield, Virginia 22152-2639; 
Telephone: (571) 362-3261.

List of Subjects in 21 CFR Part 1301

    Administrative practice and procedure, Drug traffic control, 
Security measures.
    For the reasons set out above, the DEA proposes to amend 21 CFR 
part 1301 as follows:

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

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

    Authority:  21 U.S.C. 821, 822, 823, 824, 831, 871(b), 875, 877, 
886a, 951, 952, 956, 957, 958, 965 unless otherwise noted.

0
2. In Sec.  1301.74, revise the fifth sentence of paragraph (c) 
introductory text to read as follows:


Sec.  1301.74   Other security controls for non-practitioners; narcotic 
treatment programs and compounders for narcotic treatment programs.

* * * * *
    (c) * * * The registrant must also file a complete and accurate DEA 
Form 106 with the Administration through the DEA Diversion Control 
Division secure network application within 15 calendar days after 
discovery of the theft or loss. * * *
* * * * *
0
3. In Sec.  1301.76, revise the second sentence of paragraph (b) 
introductory text to read as follows:


Sec.  1301.76   Other security controls for practitioners.

* * * * *
    (b) * * * The registrant must also file a complete and accurate DEA 
Form 106 with the Administration through the DEA Diversion Control 
Division secure network application within 15 calendar days after the 
discovery of theft or loss. * * *
* * * * *

Timothy J. Shea,
Acting Administrator.
[FR Doc. 2020-15635 Filed 7-28-20; 8:45 am]
BILLING CODE 4410-09-P