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Meetings and Events > DEA Meetings and Events > Pseudoephedrine Retailers Meeting DEA Meetings and EventsDEA - Pseudoephedrine Retailers
Meeting
Arlington, Virginia February 28, 2003
The Drug Enforcement Administration (DEA) sponsored the Pseudoephedrine Retailers’ Meeting in Arlington, Virginia, on February 28, 2003. The purpose of this meeting was to provide a forum for educating the industry regarding the latest pseudoephedrine diversion trends, regulations, and procedures governing the retail sales of pseudoephedrine containing products. Agenda items included: Methamphetamine Production and Abuse, Regulatory Issues and Pending Legislation, Voluntary Cooperation, and Industry Responsibilities. Twenty industry representatives and 10 representatives from industry associations attended the Pseudoephedrine Retailers’ Meeting. Scott Collier, Chief, Chemical Control Section (ODI), Office of Diversion Control (OD), thanked the attendees for traveling to Arlington to attend this important meeting. Mr. Collier proposed an exchange of ideas between the DEA and industry to reduce the diversion of pseudoephedrine. Mr. Collier stated that an industry representative from Costco would be presenting tools that Costco has adopted to prevent diversion at the retail level. Finally, Mr. Collier said that this meeting was an opportunity for industry representatives and the DEA to work together to reduce the diversion of pseudoephedrine. Methamphetamine Production and Abuse Sheldon Burkett, Staff Coordinator, Office of Domestic Operations, advised that the purpose of his presentation was to inform the industry about what the DEA is discovering in regard to methamphetamine and how this relates to over-the-counter pseudoephedrine products. Mr. Burkett stated that the goal with the help of the industry was to reduce the diversion of pseudoephedrine and the illegal manufacturing of methamphetamine. Mr. Burkett began his presentation with a history of clandestine laboratories (clan labs) in the United States. The diversion of chemicals used to produce methamphetamine began in the 1970’s with biker groups like "Hell’s Angels." At that time Phenyl-2-Propanone (P2P) was the main ingredient in methamphetamine. In 1988, P2P was rescheduled to a Schedule II drug, making diversion more difficult. By the early 1990’s, the P2P method was replaced by a process using ephedrine and pseudoephedrine interchangeably to produce methamphetamine. In addition, a new method referred to as the "Nazi" or "Birch" method had been created, which allowed traffickers to produce smaller amounts of methamphetamine, approximately 2 oz. at a time. Currently, the methamphetamine situation in the U.S. shows no signs of diminishing. In areas like the East and Southeast it is actually increasing. ‘Super Labs,’ those with the ability to produce over 10 pounds of methamphetamine in a 24-hour period, are appearing in California. Several reasons for this include: ingredients to manufacture the methamphetamine are still readily available to the public and with the advent of technology, drug traffickers are now able to post ‘recipes’ and exchange information via the internet. At raids of super labs, law enforcement has discovered evidence that traffickers have now been forced to rely on ‘blister packs’ of pseudoephedrine products or smuggle the pseudoephedrine from countries like Canada. Traffickers are able to smuggle pseudoephedrine products from Canada because of that country’s late adoption of chemical legislation which regulate imports. Mr. Burkett presented data on methamphetamine labs in the U.S. In 1997, there were approximately 3,300 lab seizures. This number increased to approximately 9,000 in 2000. In 2002, there were approximately 14,000 labs seized with the numbers increasing in the Midwest and on the East Coast of the United States. A major concern is how these labs affect society. Children have been greatly affected at labs by being exposed to chemicals at these lab sites. Approximately 6,000 children were present at lab sites from 2000-2002. These lab sites pose such a danger that 55 children were killed/injured during the same time period. Federal taxpayers have been charged with the costs of cleaning up lab sites. The DEA’s costs to clean up these lab sites increased from $2 million in 1995, to $23.8 million in 2002. Effects of methamphetamine on users are similar to those of other stimulants: irritability, aggressive behavior, weight loss, bad teeth, brain damage, and open sores. Meth users, who have poor personal hygiene and frequently share needles and/or engage in unsafe sex, are often afflicted with hepatitis, AIDS, herpes, and tuberculosis. The average methamphetamine user is between the ages of 20-39, most commonly Caucasian and increasingly Hispanic, with equal representation among men and women. Mr. Burkett advised that methamphetamine labs are most commonly discovered in cars and residences. Currently, the most common methods to manufacture methamphetamine involve the Birch or Iodine (HI) method and the P2P method. Mr. Burkett discussed the chemical precursors, reagents, catalysts, and solvents necessary to manufacture methamphetamine and gave examples of common products that contain these ingredients. He concluded his presentation by encouraging industry to cooperate with the DEA in reducing additional diversion of pseudoephedrine products by recommending new and creative solutions to target the problem. Regulatory Issues and Pending Legislation Andrew McFaul, Chief of the Regulatory Drafting Unit, OD, spoke on regulatory issues as they relate to pseudoephedrine products. The Methamphetamine Anti-Proliferation Act (MAPA) provides legislation setting limits for retail/mail order distributor thresholds at 9 grams per transaction, with no more than 3 grams in each package. Mr. McFaul reminded attendees that these thresholds are the ‘upper’ limit. Upper limit implies that the majority of customers would not need to purchase that much product in one transaction. Mr. McFaul spoke about the "safe harbor" exemption for pseudoephedrine blister packs. Some retail distributors have made the assumption that blister packs are exempt from threshold limits. This assumption is erroneous. Mr. McFaul explained the meaning of each term in the exemption.
Mr. McFaul recommended that retailers pay close attention to the security of pseudoephedrine products. From 1995 to 2000, almost all reported chemical thefts involved pseudoephedrine or ephedrine, either in bulk or dosage form. The black market price for a case of 144 bottles of pseudoephedrine can be as high as $3,000 depending on the location. Currently, the Controlled Substances Act (CSA) requires reporting of "any unusual or excessive loss or disappearance of a listed chemical under the control of the regulated person." The DEA considers every theft to be unusual and reportable. Excessive and unusual losses should be reported. Currently, the DEA is writing a proposed rule enhancing security requirements and working to clarify the regulations regarding reporting of thefts/losses of listed chemicals. While the proposed rule sets forth the DEA’s proposed security requirements, it also solicits industry input regarding alternative approaches that might provide necessary security without imposing excessive burdens on the registrant. When published, the notice of proposed rulemaking, as well as all other regulations published by the DEA, can be viewed on OD’s website at www.DEAdiversion.usdoj.gov Trena Jones, Staff Coordinator, Domestic Chemical Control Unit, OD, discussed retail sales of pseudoephedrine products and ideas for reducing the volume of chemicals available for clandestine meth labs. The problem across the U.S. involves the easy accessibility that drug traffickers have to pseudoephedrine drug products, which are essential to the manufacturing process of methamphetamine. One case of pseudoephedrine can produce one pound of methamphetamine, which has a street value of $16,000. These clandestine methamphetamine labs pose many dangers to society, for example during the calendar year 2002 they caused 194 fires, 117 explosions, and 22 deaths. Some of the common problems that may lead to the diversion of List I chemicals (pseudoephedrine) include "smurfing," "shelf sweeping," and shoplifting. Smurfing involves the retail purchase of sub-threshold amounts by organized groups of individuals that either send in multiple purchasers into the same location or visit a large number of different locations. To deter individuals from smurfing, it is suggested that shelf stock be kept lean and most importantly do not use shelves to store excess stock. Shelf sweeping occurs when individuals or groups remove all the shelf stock and exit the store, similar to a "smash and grab" shoplifting technique. Shelf sweeping relies on excessive quantities of product being available on the shelf. Shoplifting occurs when individuals remove stock from the shelves and exit the store without paying. This technique relies on management not being aware of theft. All of the above methods can be prevented by limiting access to products, which can be accomplished by utilizing mirrors or other surveillance equipment such as cameras. Retail distributors can assist the DEA by establishing sale quantity limits, implementing electronic register controls, and by posting signs notifying customers of store policies placing restrictions on the sale of pseudoephedrine products. Additional steps to prevent diversion can be taken by educating store employees of store policies concerning restrictions, identifying the products whose sales are limited , and informing them of their responsibility to report diversion. There are several factors which may indicate to the retailer that customers might be engaged in suspicious activities which include: customers who ask for more than the transaction limit; customers who are part of a group who all buy the transaction limit; or, customers who buy the transaction limit on the same day and/or repeatedly within a few days. Customers who also purchase other methamphetamine processing products at the same time as the pseudoephedrine products such as alcohol, Coleman fuel, acetone, road flares, drain cleaners, iodine, muriatic acid, rock salt, starting fluid and large quantities of coffee filters and matches should also be considered suspicious. According to 21 C.F.R. 1310.05(a)(3), retailers are required to report any unusual or excessive loss or disappearance of a listed chemical under the control of the regulated person. Thefts and losses of pseudoephedrine products should be reported immediately to the nearest DEA office, as well as state/local law enforcement and regulatory agencies. In addition, a written report (DEA 106) must be submitted to the local DEA office within 15 days after discovery of the theft or loss. Thefts of pseudoephedrine products can be minimized by maintaining excess stock in segregated areas, limiting employee access to the stock, operating surveillance cameras, maintaining an effective system to control inventory, and conducting employee background checks and drug testing. Relying on a security system that has been violated does not satisfy requirements to provide effective controls against theft. The security must be improved after a theft/loss and these improvements must be extended to all locations which store or distribute pseudoephedrine products. Following established retail thresholds will prevent a small portion of the diversion of pseudoephedrine products to methamphetamine manufacturers. Retail thresholds for 9 gram single transactions are as follows (note: one tablet less makes the transaction non-regulated):
Retail thresholds for 3 gram package size are as follows:
With the established retail thresholds at 9 grams per transaction and no more than 3 grams per package, methamphetamine manufacturers are still able to obtain the necessary pseudoephedrine to make their product. This becomes evident when examining the incidents where blister packs of pseudoephedrine were discovered at methamphetamine lab seizures across the U.S. In 2000, 283 methamphetamine labs were seized where pseudoephedrine blister packs were found. This number more than tripled to 922 incidents in 2001. If the blister packs or other products found at the lab site can be identified as belonging to a particular retailer, the DEA notifies the company in a letter mailed to the retail corporate headquarters informing them of the discovery. Ms. Jones ended her presentation requesting that retailers review their existing store policies and establish new policies to help the DEA prevent further diversion of pseudoephedrine products. Richard Duffy, Assistant Vice President, Costco Corporation, presented initiatives Costco has undertaken to prevent the diversion of pseudoephedrine products. In March of 2000, Costco placed a one package limit per customer on pseudoephedrine products and created signage both in English and Spanish stating their store policy that limits sales of these products, in cooperation with law enforcement. Costco also incorporated "soft blocks" into their computer system which gives warnings to cashiers stating that a purchase has exceeded the allowed amount. Costco has also taken steps to implement changes in their computer software which prohibit customers from making multiple purchases of items that contain pseudoephedrine. Additionally, Costco has created a pamphlet that illustrates all of the pseudoephedrine products they stock and how much of each individual product that can be legally sold per transaction. Costco has the ability to implement many of these changes because they are a ‘membership club’ and tend to carry a smaller selection of products; however, this does not mean that other corporations that carry larger selections would not be able to implement some of these changes such as register blocks and signage. Mr. Collier further encouraged all industry representatives in attendance to establish additional safeguards to protect their supplies of pseudoephedrine products. Attendees were also encouraged to provide the DEA with suggestions on how to assist retailers further in establishing additional controls at the retail level. Mr. Collier thanked everyone for attending and the meeting was adjourned. Registration
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