[Federal Register: December 20, 2002 (Volume 67, Number 245)]
[Notices]
[Page 78019-78020]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20de02-87]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 02-6]
Houba, Inc., Culver, IN; Notice of Administrative Hearing,
Summary of Comments and Objections; Notice of Hearing
This Notice of Administrative Hearing, Summary of Comments and
Objections, regarding the application of Houba, Inc. (Houba), for
registration as an importer of the Schedule II controlled substances
raw opium, opium poppy, and poppy straw concentrate is published
pursuant to 21 CFR 1301.34(a). On September 6, 2001, notice was
published in the Federal Register, 66 FR 46653 (DEA 2001), stating that
Houba has applied to be registered as an importer of raw opium, opium
poppy, and poppy straw concentrate.
By filings dated October 9, 2001, Penick Corporation (Penick),
Noramco of Delaware, Inc. (Noramco), and Mallinckrodt, Inc.
(Mallinckrodt), filed comments and request for hearing on Houba's
application. Notice is hereby given that a hearing with respect to
Houba's application to be registered as an importer of raw opium, opium
poppy, and poppy straw concentrate will be conducted pursuant to the
provisions of 21 U.S.C. 952(a) and 958 and 21 CFR 1301.34.
Hearing Date
The hearing will begin at 9:30 a.m. on February 3, 2003, and will
be held at the Drug Enforcement Administration Headquarters, 600 Army
Navy Drive, Hearing Room, Room E-2103, Arlington, Virginia. The hearing
will be closed to any person not involved in the preparation or
presentation of the case.
Notice of Appearance
Any person entitled to participate in this hearing pursuant to 21
CFR 1301.34, and desiring to do so, may participate by filing a notice
of intention to participate, in triplicate, and in accordance with 21
CFR 1301.34, with the Hearing Clerk, Office of Administrative Law
Judges, Drug Enforcement Administration, Washington, DC 20537, within
30 days of the date of publication of this notice in the Federal
Register. Each notice of appearance must be in the form prescribed in
21 CFR 1316.48. Houba, Penick, Noramco, Mallinckrodt, and the Drug
Enforcement Administration (DEA) Office of Chief Counsel need not file
a notice of intention to participate.
FOR FURTHER INFORMATION CONTACT: Helen D. Farmer, Hearing Clerk, Drug
Enforcement Administration, Office of Administrative Law Judges,
Washington, DC 20537; Telephone (202) 307-8188.
Summary of Comments and Objections
Noramco's Comments
Noramco asserts that Houba bears the burden of providing that its
registration to import would be consistent with the public interest,
that Houba has apparently not engaged in the import or bulk manufacture
of narcotic raw materials or controlled substances since withdrawing a
previous application to manufacture the Schedule II controlled
substance methylphenidate in 1994, and that existing manufacturers of
bulk narcotic substances are producing an adequate and uninterrupted
supply under adequately competitive conditions. Noramco further asserts
that Houba's parent corporation, Halsey Pharmaceutical (Halsey), has
previously failed to comply with DEA regulations and pled guilty in
1993 to drug manufacturing-related crimes, that five former Halsey
employees were indicted as a result, and that a controlled substance-
related murder occurred at Halsey's premises in 1992. Noramco also
asserts that that there is significant evidence that Halsey has serious
financial problems and does not likely have the financial resources to
import and process narcotic raw materials. Finally, Noramco asserts
that as of the date of its request for hearing, Mallinckrodt and
Noramco were registered by DEA to import narcotic raw materials and
applications by Penick, Chattem Chemicals, Inc. (Chattem), and Johnson
Matthey, Inc. (Johnson Matthey), were pending, and that DEA is
statutorily constrained to limit the number of approved importers and
manufacturers to a number that can produce an adequate and
uninterrupted supply of controlled substances for legitimate medical,
scientific, research, and industrial purposes under adequately
competitive conditions.
Penick's Comments
Penick states that based on information in the public record, it
appears that Houba may not be able to establish that its registration
to import narcotic raw materials would be in the public interest, that
in light of the applications for registration to import that were
pending at the time Penick filed its comments a determination of the
adequacy of competition among importers could not be made; that
although it is not possible to determine Houba's capabilities to
process narcotic raw materials in its manufacturing facilities, it
appears that Houba has never been registered to manufacture a product
produced from these substances; and that Penick is not aware whether
Houba has ever held DEA registration as a researcher that would allow
it to develop methods and procedures for processing narcotic raw
materials. Penick further asserts that additional information is
necessary about Houba's experience in processing narcotic raw materials
and
[[Page 78020]]
manufacturing opiate active pharmaceutical ingredients; about Houba's
knowledge of and experience with the international marketplace, customs
and practices associated with purchases of narcotic raw materials, and
control of possible diversion of those materials; and about whether
Houba's manufacturing facility complies with DEA's security
requirements, including those pertaining to the transport of narcotic
raw materials from their port of entry in the United States to Houba's
facility. Finally, Penick asserts that Halsey has suffered serious
financial difficulties and may be seeking an importer registration in
order to attract potential investors and funding, and that Halsey has
encountered various regulatory problems.
Mallinckrodt's Comments
Mallinckrodt asserts that Houba bears but cannot meet the burden of
providing that its application satisfies applicable legal standards;
that DEA, pursuant to its ``eighty-twenty rule'' (21 CFR 1312.13(f),
requires importers of narcotic raw material to purchase eighty percent
of these substances from India and/or Turkey and the remaining twenty
percent from Yugoslavia, France, Poland, Hungary, and/or Australia,
which provides insurmountable cost advantages to foreign producers;
that in order to demonstrate that its application is in the public
interest, Houba must demonstrate not only that it has adequate physical
security at its facility, but also that it has a proven technology for
processing narcotic raw materials that meets federal regulatory
requirements, a detailed marketing and business plan, plans and firm
capital commitments for construction of the facility in which it will
process narcotic raw materials, and personnel with experience and
expertise to implement the proven technology with minimal wastage of
narcotic raw materials. Mallinckrodt further asserts that DEA is
required to limit the number of importers and that the existing
registrants provide an adequate supply under adequately competitive
conditions. In addition, Mallinckrodt asserts that Houba should be
required to demonstrate that, if registered, it would produce opiates
from both opium and poppy straw concentrate, because failing to do so
would violate DEA's ``eighty-twenty-rule'' and DEA's policy against
permitting manufacturers to hold registrations and no use them, and
because failing to do so would increase the instability of supply of
narcotic raw materials. Finally, Mallinckrodt asserts that Halsey
admits that it is in a precarious financial position, that Halsey is in
a position to control Houba's management and operations, and that
Halsey had a poor history of compliance with regulatory requirements
throughout the 1990s; that it is uncertain whether Houba has the
technical capability to process opium and poppy straw concentrate; and
that Mallinckrodt has no knowledge that Houba has any experience in
importing or extracting narcotic raw materials.
Dated: December 13, 2002.
John B. Brown III,
Deputy Administrator.
[FR Doc. 02-32007 Filed 12-19-02; 8:45 am]
BILLING CODE 4410-09-M