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Established Assessment of Annual Needs for the List I
Chemicals Ephedrine, Pseudoephedrine, and Phenylpropanolamine
for 2007
FR Doc E7-18523 [Federal Register: September 20, 2007 (Volume 72, Number
182)] [Notices] [Page 53907-53911] From the Federal Register Online via GPO
Access [wais.access.gpo.gov] [DOCID:fr20se07-86]
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. DEA-300F]
Established Assessment of Annual Needs for the List I Chemicals Ephedrine,
Pseudoephedrine, and Phenylpropanolamine for 2007
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Notice of assessment of annual needs for 2007.
SUMMARY: This notice establishes the 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.
DATES: Effective Date: September 20, 2007.
FOR FURTHER INFORMATION CONTACT: Christine A. Sannerud, Ph.D., Chief,
Drug & Chemical Evaluation Section, Drug Enforcement Administration,
Washington, DC 20537, Telephone: (202) 307-7183.
SUPPLEMENTARY INFORMATION:
Background and Legal Authority
Section 713 of the CMEA (Title VII of Pub. L 109-177) amended section 306 of
the Controlled Substances Act (CSA) (21
U.S.C. 826) requiring that the Attorney General establish quotas to provide
for the annual needs for ephedrine, pseudoephedrine, and phenylpropanolamine.
Further, 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 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 in 2007 to provide adequate supplies of
each chemical for: the estimated medical, scientific, research and industrial
needs of the United States; lawful export requirements; and the establishment
and maintenance of reserve stocks.
This responsibility for establishing the assessment has been delegated to the
Administrator of the DEA by 28 CFR section 0.100. The Administrator, in turn,
has redelegated this function to the Deputy Administrator, pursuant to 28 CFR
section 0.104.
On October 19, 2006, a notice entitled, "Assessment of Annual Needs for the
List I Chemicals Ephedrine, Pseudoephedrine, and Phenylpropanolamine for 2007:
Proposed'' was published in the Federal Register (71 FR 61801). This notice
proposed the initial 2007 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
December 4, 2006.
Comments Received
DEA received eight comments from five interested parties during the comment
period. Two comments were received from two DEA registered chemical importers;
one comment was received from a DEA registered chemical manufacturer; two
comments were received from an association representing over-the-counter (OTC)
manufacturers, distributors and retailers; and three comments were received from
a law firm representing an OTC product manufacturer. After the comment period
closed, DEA received an additional comment from the above-mentioned association.
All comments received during the comment period are summarized here and
discussed further below.
One of the five commenters supported the DEA's proposal. This commenter, one
of the DEA registered chemical importers, stated that DEA's proposed assessment
of annual needs for pseudoephedrine and ephedrine was "reasonable.''
Additionally, the commenter requested that the DEA consider providing "regulatory
relief'' with regard to the new import provisions by minimizing the amount of
information that will be required on the import applications and relying more
heavily on the requirements under the "spot market'' provision to ensure that
these substances are imported for legitimate needs. Since the information
collected as part of the quota provisions and import applications is not the
subject of this notice, the latter part of this comment was not considered by
DEA.
Three of the five commenters raised concerns regarding DEA's proposal. Two of
these commenters raised concerns regarding the assessment for ephedrine while
one raised concerns regarding the assessment for phenylpropanolamine (for
conversion). These commenters included a DEA-registered manufacturer that
imports phenylpropanolamine, an association representing OTC manufacturers,
distributors, and retailers, and a law firm representing an OTC product
manufacturer.
The fifth commenter requested that DEA consider its proposed individual
requirement for ephedrine in fixing the final assessment of annual needs.
DEA did not receive any comments on its proposed assessment of annual needs
for ephedrine (for conversion) and phenylpropanolamine (for sale) and is
therefore finalizing these values as proposed. The assessment of annual needs
for phenylpropanolamine (for conversion), ephedrine (for sale) and
pseudoephedrine (for sale) are discussed below within the context of the
comments received.
Comments Regarding DEA's Proposed Assessment for Phenylpropanolamine (for
Conversion)
One commenter, a manufacturer that imports phenylpropanolamine, considered
the proposed phenylpropanolamine (for conversion) assessment, i.e., the amount
necessary for the manufacture of other substances, insufficient to meet its
customers' needs. The commenter stated that phenylpropanolamine, and its
isomers, are used as chiral agents in numerous chemical syntheses, a factor that
the commenter believed DEA had not considered in its original proposal. The
commenter stated that the synthesized drugs are used in drug products
administered to patients with Acquired Immune Deficiency Syndrome (AIDS) and
Attention Deficit Disorder (ADD). This commenter believed that these uses are
probably the largest use of phenylpropanolamine.
DEA had considered in its proposal the amount of phenylpropanolamine it
believed was necessary for the manufacture of ADD medicines, but had not
considered the chemical's use in the manufacture of drugs utilized in the
treatment of AIDS. After consideration of this comment along with additional
information obtained by DEA in connection with this comment, DEA has adjusted
its assessment for phenylpropanolamine (for conversion) from 6,240 kg to 85,470
kg.
Comments Regarding DEA's Proposed Assessments for Ephedrine (for Sale) and
Pseudoephedrine (for Sale)
Two commenters, the association representing OTC manufacturers, distributors,
and retailers, and the law firm representing an OTC product manufacturer,
indicated their belief that the proposed ephedrine assessment was insufficient
to meet market demands for ephedrine-containing OTC products. The association
also questioned the
[[Page 53909]]
sufficiency of the assessment for pseudoephedrine.
The law firm representing an OTC product manufacturer submitted three
individual comments during the comment period. The first comment requested a
30-day extension of the comment period. The commenter stated that they were
unable to locate the IMS Health Government Solutions (IMS) report on the DEA
Diversion Web site. The commenter was contacted by DEA and advised as to where
the IMS report was located; upon locating the report, the commenter withdrew
their request for a 30-day extension. The second comment was another request for
a 30-day extension of the comment period deadline in order to compile and submit
to DEA a report from "* * * experts in medicine, economics, and DEA/ law
enforcement to assess the impact of the proposed quota on medical, industrial,
scientific and other legitimate demand for the two chemical substances.'' The
commenter submitted the report to DEA in its third comment. The commenter
recommended "withdrawal of the proposed 2007 assessment due to its inaccuracy
and incompleteness.'' The commenter requested that DEA issue a new notice. The
comment made the following conclusions: (1) That the IMS report was flawed
because it excluded and underestimated "legitimate demand for ephedrine sold in
over-the- counter (OTC) drugs for respiratory ailments via convenience stores'';
(2) "The underestimation of legitimate medical need will lead to ephedrine quota
levels beneath those necessary to ensure adequate supplies of ephedrine to treat
respiratory ailments''; (3) "The exclusion of convenience stores from the IMS
calculus and any resulting deprivation of supply to satisfy legitimate demand in
those stores will imperil the health and safety of Americans with respiratory
ailments, resulting in increased hospitalization and possibly deaths due to a
lack of ready access in moments of critical need''; (4) "* * * the prejudicial
exclusion of convenience store demand from the 2007 Annual Needs estimate not
only reduces supply beneath safe levels but also creates an anti-competitive
market bias in favor of pharmacies over convenience stores to the economic and
physical detriment of all with legitimate medical needs.'' The commenter also
stated that IMS did not conduct any "sensitivity tests, assessments of bias, or
estimates of precision related to use of surveys that are critical to estimates
of certain segments of the legitimate medical use market, such as convenience
stores.''
DEA notes that IMS completed a sensitivity analysis upon review of the
comments submitted by this commenter. The results of this analysis and DEA's
consideration of the results of that analysis are discussed below. IMS' final
report is available on the Office of Diversion Control's Web site (http://www.deadiversion.usdoj.gov).
The association representing OTC manufacturers, distributors, and retailers
provided two comments to the docket during the comment period. The commenter
stated that the IMS report did not "properly document data from the convenience
store segment.'' The commenter noted its concern that DEA has "narrowly defined
`medical need' '' for preparations containing these List I chemicals,
specifically ephedrine. The commenter stated that it had commissioned "a study
by an outside economic consulting firm to provide the DEA with substantive
information that would help DEA produce a more accurate and substantive estimate
of ephedrine needs assessment for 2007.'' The comment included a request for an
extension of time which was not granted. The study was submitted to both DEA and
IMS after the comment period had closed.
In connection with the concerns raised by these two commenters that the
preliminary IMS study did not adequately address sales of ephedrine-based OTC
drug products through the convenience store channel of distribution, DEA notes
that its contract with IMS had two distinct phases. Phase I, which was completed
prior to publication of the proposed assessment of annual needs, involved a
preliminary assessment of the medical use of ephedrine and pseudoephedrine and a
written summary of the methodology it used to develop the estimates. This
information was made available for review by the public when the DEA published
the "Assessment of Annual Needs for the List I Chemicals Ephedrine,
Pseudoephedrine, and Phenylpropanolamine for 2007: Proposed'' (71 FR 61801). The
second phase of DEA's contract involved IMS' development of a final estimate
which was developed by IMS after consideration of all available information,
including: comments received from the public during the comment period, the
study submitted directly to IMS by the association representing OTC
manufacturers, distributors and retailers, updated information from the data
sources used by IMS to compile the initial estimates, and other available
information on the sales of OTC drug products through various distribution
channels. The final report is discussed below and is available on DEA's Office
of Diversion Control Web site, http://www.deadiversion.usdoj.gov .
Report Prepared by IMS Health
As discussed in its October 19, 2006, proposed Assessment of Annual Needs,
since the manufacture and importation of ephedrine, pseudoephedrine, and
phenylpropanolamine were not previously regulated through the establishment of
an assessment of annual needs, DEA obtained assistance from a private
independent contractor, IMS, to develop the 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 data the company routinely collects and offers to customers 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 prescription or available over-the-counter. The estimates of use
encompassed those products containing ephedrine and pseudoephedrine which are
lawfully marketed under the Federal Food, Drug and Cosmetic Act. As noted
previously, IMS did not examine estimates for phenylpropanolamine.
The CSA requires that DEA establish quotas for ephedrine, pseudoephedrine,
and phenylpropanolamine to meet the estimated medical, scientific, research, and
industrial needs of the United States, lawful export requirements, and
maintenance of reserve stocks. Accordingly, DEA requested that IMS determine the
amount of ephedrine and pseudoephedrine necessary to meet the estimated medical
needs of the United States. DEA and IMS agreed that looking at sales of
prescription and OTC drug products containing these list I chemicals through all
distribution channels alone would not be an appropriate proxy from which to
derive an estimate of what IMS describes in its report as the "legitimate
medical use'' because this approach would have the unwanted effect of including
amounts of ephedrine and pseudoephedrine purchased for use in the clandestine
manufacture of methamphetamine.
Therefore, IMS concluded that the best proxy for evaluating the estimated
medical use for these chemicals, i.e., the alternate method that seeks to
exclude
[[Page 53910]]
sales of ephedrine and pseudoephedrine-based products destined for
clandestine methamphetamine production in the United States, would involve
evaluating the changes (increases or decreases) in sales of prescription and OTC
products containing these List I chemicals which have resulted from various
state initiatives aimed at imposing restrictions on the retail sales of OTC drug
products containing these chemicals. These state-sponsored initiatives began as
early as 2004. The requirements vary from state to state, but examples include:
(1) Placing OTC products behind pharmacy counters, (2) restricting the quantity
of OTC drug products that could be purchased by individuals, and (3) providing
proof of identification at the time of purchase. Based on this analysis, IMS
concluded that the median changes in OTC sales of ephedrine products were: 23.7
percent increase through retail channels (mass merchandisers, grocery stores,
etc.) and a 45.2 percent decrease in "other'' distribution channels (including
gas station and convenience stores). For comparison, sales of OTC products
containing pseudoephedrine decreased by 22 percent through retail distribution
channels and also decreased by 10.8 percent through other distribution channels.
Accordingly, these changes, along with the changes observed in the usage of
prescription drug products containing ephedrine and pseudoephedrine, were
applied across all data systems used in the IMS analysis.
Based on the comments analyzed by IMS, IMS completed a sensitivity analysis
of their final estimates. IMS concluded that the estimated medical use for
pseudoephedrine was "very stable * * * differing from the simple average of the
component final estimates by at most 7.7%.'' By contrast, however, the estimated
medical use for ephedrine was "relatively unstable, as the sensitivity estimates
differ from the final estimate by as much as 46.5%.''
IMS' Medical Need Estimate for Pseudoephedrine and the DEA's Final 2007
Assessment of Annual Needs for Pseudoephedrine (for Sale)
In its final report, IMS concluded that the estimated medical need for
pseudoephedrine decreased in all three models analyzed. The initial IMS report
estimated that the medical need in the United States for pseudoephedrine was
350,700 kg and in the final report the medical need estimate was 280,268 kg. The
results of the sensitivity analysis suggest that the pseudoephedrine medical
need assessment was very stable from the simple average of the three component
final estimates and, at most, differed by 7.7 percent. The decrease observed in
IMS final estimate as compared with the preliminary estimate was due to a
necessary adjustment resulting from IMS initially expressing its estimate
(350,700 kg) in terms of the compound weight, e.g., pseudoephedrine
hydrochloride, rather than expressing its estimate in terms of the weight of the
molecule pseudoephedrine alone. Overall, this resulted in a correction down in
the IMS estimate by approximately 20 percent.
Although IMS' final estimate is lower, DEA has concluded that the amount
proposed would allow for sufficient inventory allowances to DEA registered
manufacturers and importers of pseudoephedrine products and could account for
any unexpected change (increase) in the use of pseudoephedrine that may result
from changes in the acceptability of phenylephrine as a substitute for
pseudoephedrine in many OTC cough and cold products currently on the market.
IMS' Medical Need Estimate for Ephedrine and the DEA's Final 2007
Assessment of Annual Needs for Ephedrine (for Sale)
As with the pseudoephedrine estimate, IMS based its preliminary ephedrine
medical need estimate on the weights of the salt forms of ephedrine; this
resulted in a necessary adjustment down by 20 percent for its final medical need
estimate. Unlike the pseudoephedrine estimate which decreased in the final
report, IMS' analysis of the data available resulted in an increase from 3,800
kg to 4,096 kg. Furthermore, the results of its sensitivity analysis concluded
that the 4,096 kg medical need estimate was "unstable'' as compared to the
estimate for pseudoephedrine and that the sensitivity estimates differed from
the final estimate by as much as 46.5 percent (range was 4,096 kg to 5,998 kg).
The two factors principally responsible for the 46.5 percent range were: (1) The
incorporation of estimated amounts of OTC products sold in convenience stores,
which IMS concluded to be 7.7 percent, and (2) the incorporation of "non-matched
products,'' i.e., those products not originally confirmed to contain ephedrine
or pseudoephedrine, into IMS' estimate.
Based on this analysis, DEA concludes that the proposed assessment of annual
needs for ephedrine (for sale) was inadequate to meet the estimated medical,
scientific, research, and industrial needs of the United States, lawful export
requirements, and maintenance of reserve stocks. After considering IMS' final
estimate of the medical need of ephedrine-based prescription and OTC products
(5,998 kg), along with information DEA collects from DEA registered chemical
exporters (through the DEA-486 Import/Export Declaration for Listed Chemicals),
and amounts necessary to maintain reserve stocks, DEA has increased the
ephedrine (for sale) assessment from 7,100 kg to 11,500 kg.
Conclusion
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 section 0.100,
and redelegated to the Deputy Administrator pursuant to 28 CFR section 0.104,
the Deputy Administrator hereby orders that the 2007 assessment of annual needs
for ephedrine, pseudoephedrine, and phenylpropanolamine, expressed in kilograms
of anhydrous acid or base, be established as follows:
List I chemicals
|
Final year 2007 assessment of annual needs (kg)
|
Ephedrine (for sale)
|
11,500
|
Ephedrine (for conversion)
|
128,760
|
Pseudoephedrine (for sale)
|
511,100
|
Phenylpropanolamine (for sale)
|
5,545
|
Phenylpropanolamine (for conversion)
|
85,470
|
The Office of Management and Budget has determined that notices of quotas are
not subject to centralized review under Executive Order 12866.
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. 601-612. The establishment of
assessments 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
United States, for export requirements, and the establishment and maintenance of
reserve stocks.
[[Page 53911]]
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 sections 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 $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.
This action is not a major rule as defined by section 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: September 13, 2007.
Michele M. Leonhart,
Deputy Administrator. >
[FR Doc. E7-18523 Filed 9-19-07; 8:45 am]
BILLING CODE 4410-09-P
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