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26 September 2006
[Federal Register: September 26, 2006 (Volume 71, Number 186)]
[Rules and Regulations]
[Page 56008-56027]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26se06-8]
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Parts 1300, 1309, 1310, 1314
[Docket No. DEA-291I]
RIN 1117-AB05
Retail Sales of Scheduled Listed Chemical Products; Self-
Certification of Regulated Sellers of Scheduled Listed Chemical
Products
AGENCY: Drug Enforcement Administration (DEA), Justice.
ACTION: Interim final rule with request for comment.
-----------------------------------------------------------------------
SUMMARY: In March 2006, the President signed the Combat Methamphetamine
Epidemic Act of 2005, which establishes new requirements for retail
sales of over-the-counter (nonprescription) products containing the
List I chemicals ephedrine, pseudoephedrine, and phenylpropanolamine.
The three chemicals can be used to manufacture methamphetamine
illegally. DEA is promulgating this rule to incorporate the statutory
provisions and make its regulations consistent with the new
requirements. This action establishes daily and 30-day limits on the
sales of scheduled listed chemical products to individuals and requires
recordkeeping on most sales.
DATES: Effective Dates: September 21, 2006, except that Sec. Sec.
1314.20, 1314.25, and 1314.30 (with the exception of Sec.
1314.30(a)(2)) are effective September 30, 2006. Section 1314.30(a)(2)
is effective November 27, 2006.
Comment Date: Written comments must be postmarked on or before
November 27, 2006.
ADDRESSES: To ensure proper handling of comments, please reference
``Docket No. DEA-291I'' on all written and electronic correspondence.
Written comments being sent via regular mail should be sent to the
Deputy Administrator, Drug Enforcement Administration, Washington, DC
20537, Attention: DEA Federal Register Representative/ODL. Written
comments sent via express mail should be sent to DEA Headquarters,
Attention: DEA Federal Register Representative/ODL, 2401 Jefferson-
Davis Highway, Alexandria, VA 22301. Comments may be directly sent to
DEA electronically by sending an electronic message to
dea.diversion.policy@usdoj.gov. Comments may also be sent
electronically through http://www.regulations.gov using the electronic
comment form provided on that site. An electronic copy of this document
is also available at the http://www.regulations.gov Web site. 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: Mark W. Caverly, Chief, Liaison and
Policy Section, Office of Diversion Control, Drug Enforcement
Administration, Washington, DC 20537; telephone: (202) 307-7297.
SUPPLEMENTARY INFORMATION:
DEA's Legal Authority
DEA implements the Comprehensive Drug Abuse Prevention and Control
Act of 1970, often referred to as the Controlled Substances Act (CSA)
and the Controlled Substances Import and Export Act (21 U.S.C. 801-
971), as amended. DEA publishes the implementing regulations for these
statutes in Title 21 of the Code of Federal Regulations (CFR), Parts
1300 to 1399. These regulations are designed to ensure that there is a
sufficient supply of controlled substances for legitimate medical,
scientific, research, and industrial purposes and to deter the
diversion of controlled substances to illegal purposes. The CSA
mandates that DEA establish a closed system of control for
manufacturing, distributing, and dispensing controlled substances. Any
person who manufactures, distributes, dispenses, imports, exports, or
conducts research or chemical analysis with controlled substances must
register with DEA (unless exempt) and comply with the applicable
requirements for the activity. The CSA as amended also requires DEA to
regulate the manufacture and distribution of chemicals that may be used
to manufacture controlled substances illegally. Listed chemicals that
are classified as List I chemicals are important to the manufacture of
controlled substances. Those classified as List II chemicals may be
used to manufacture controlled substances.
On March 9, 2006, the President signed the Combat Methamphetamine
Epidemic Act of 2005 (CMEA), which is Title VII of the USA PATRIOT
Improvement and Reauthorization Act of 2005 (Pub. L. 109-177). DEA is
promulgating this rule as an interim final rule rather than a proposed
rule because the changes being made codify statutory provisions, some
of which are already in effect. Parts of the statute are self-
implementing; certain changes related to retail sales became effective
upon signature (March 9, 2006), others
[[Page 56009]]
became effective on April 8, 2006, and still others will become
effective September 30, 2006. An agency may find good cause to exempt a
rule from certain provisions of the Administrative Procedure Act (APA)
(5 U.S.C. 553), including notice of proposed rulemaking and the
opportunity for public comment, if it is determined to be unnecessary,
impracticable, or contrary to the public interest. Many of the
requirements of the Combat Methamphetamine Epidemic Act of 2005
included in this rulemaking were set out in such detail as to be self-
implementing. Therefore the changes in this rulemaking provide
conforming amendments to make the language of the regulations
consistent with that of the law. DEA is accepting comments on other
aspects of this rulemaking, particularly those not specifically
mandated by the Combat Methamphetamine Epidemic Act of 2005.
Combat Methamphetamine Epidemic Act of 2005
The Combat Methamphetamine Epidemic Act of 2005 (CMEA) amends the
CSA to change the regulations for selling nonprescription products that
contain ephedrine, pseudoephedrine, and phenylpropanolamine, their
salts, optical isomers, and salts of optical isomers. CMEA creates a
new category of products called ``scheduled listed chemical products.''
Ephedrine, pseudoephedrine, and phenylpropanolamine are List I
chemicals because they are used in, and important to, the illegal
manufacture of methamphetamine. Products containing these List I
chemicals also have legitimate medical uses. Ephedrine is used in some
products for treating asthma. Pseudoephedrine, a decongestant, is a
common ingredient in cold and allergy medications. In November 2000,
the Food and Drug Administration (FDA) issued a public health advisory
concerning phenylpropanolamine and requested that all drug companies
discontinue marketing products containing phenylpropanolamine due to
risk of hemorrhagic stroke. In response, many companies voluntarily
reformulated their products to exclude phenylpropanolamine.
Subsequently, on December 22, 2005, FDA published a Notice of Proposed
Rulemaking (70 FR 75988) proposing to categorize all over-the-counter
nasal decongestants and weight control drug products containing
phenylpropanolamine preparations as Category II, nonmonograph, i.e.,
not generally recognized as being safe for human consumption. Most
products containing phenylpropanolamine intended for humans have been
withdrawn from the market, but phenylpropanolamine is still sold by
prescription for veterinary uses.
Under previous CSA amendments (the Comprehensive Methamphetamine
Control Act of 1996 (MCA) and the Methamphetamine Anti-Proliferation
Act of 2000 (MAPA)), Congress limited the quantity of products
containing ephedrine, pseudoephedrine, and phenylpropanolamine that
could be sold as nonprescription drugs at retail (which were, along
with certain liquid products, defined as ``ordinary over-the-counter
pseudoephedrine or phenylpropanolamine products'') without
recordkeeping, but generally exempted products sold in blister packs
sold by ``retail distributors''. The MCA established thresholds for
these drug products, including a threshold of 24 grams of combination
ephedrine products; single-entity ephedrine products had been regulated
by the Domestic Chemical Diversion Control Act of 1993 (Pub. L. 103-
200). MAPA reduced existing thresholds for pseudoephedrine and
phenylpropanolamine to 9 grams per transaction, with each package
containing not more than 3 grams of pseudoephedrine base or
phenylpropanolamine base, but retained the so-called ``blister pack''
exemption. Because most retail outlets did not want to create and
maintain records of sales or register as a retail distributor, the
threshold for recordkeeping functioned for practical purposes similarly
to a sales limit. Much of the product was also sold in blister packs.
Congress determined that the existing limits were not sufficient to
prevent people from buying these products and using them to illegally
manufacture methamphetamine. In the Combat Methamphetamine Epidemic Act
of 2005, Congress adopted provisions that do the following:
Limit the quantity of each of the chemicals that may be
sold to an individual in a day to 3.6 grams of the chemical, without
regard to the number of transactions.
For nonliquids, limit packaging to blister packs
containing no more than 2 dosage units per blister. Where blister packs
are not technically feasible, the product must be packaged in unit dose
packets or pouches.
Require regulated sellers to place the products behind the
counter or in locked cabinets.
Require regulated sellers to check the identity of
purchasers and maintain a log of each sale that includes the
purchaser's name and address, signature of the purchaser, product sold,
quantity sold, date, and time.
Require regulated sellers to maintain the logbook for at
least two years.
Require regulated sellers to train employees in the
requirements of the law and certify to DEA that the training has
occurred.
For mobile retail vendors and mail order sales, require
sellers to limit sales to an individual in a 30-day period to 7.5
grams.
For individuals, limit purchases in a 30-day period to 9
grams, of which not more than 7.5 grams may be imported by means of a
common or contract carrier or the U.S. Postal Service.
The numbers of dosage units and milliliters (mL) that may be
purchased under the sales limits are shown in Table 1 below. As noted
previously, the FDA issued a voluntary recall on phenylpropanolamine
products as being unsafe for humans so no phenylpropanolamine over-the-
counter (OTC) product should be available for human consumption.
Veterinary use is by prescription only.
Table 1.--Number of Tablets/Milliliters That Equal Retail Transaction
Limits (as Base) for Scheduled Listed Chemical Products
------------------------------------------------------------------------
Transaction limits
Scheduled listed chemical product --------------------------------
3.6 gm 7.5 gm 9.0 gm
------------------------------------------------------------------------
Tablets
------------------------------------------------------------------------
Ephedrine:
25 mg Ephedrine HCl................ 175 366 439
25 mg Ephedrine Sulfate............ 186 389 466
Pseudoephedrine (as HCl):
[[Page 56010]]
30 mg Pseudoephedrine HCl.......... 146 305 366
60 mg Pseudoephedrine HCl.......... 73 152 183
120 mg Pseudoephedrine HCl......... 36 76 91
Pseudoephedrine (as Sulfate):
30 mg Pseudoephedrine Sulfate...... 155 324 389
60 mg Pseudoephedrine Sulfate...... 77 162 194
120 mg Pseudoephedrine Sulfate..... 38 81 97
240 mg Pseudoephedrine Sulfate..... 19 40 48
------------------------------------------------------------------------
Number of mL
------------------------------------------------------------------------
Ephedrine:
6.25 mg/5 ml Ephedrine HCl......... 3,515 7,323 8,788
Pseudoephedrine (as HCl):
15 mg/1.6 mL Pseudoephedrine HCl... 468 976 1,171
7.5 mg/5 mL Pseudoephedrine HCl.... 2,929 6,103 7,323
15 mg/5 mL Pseudoephedrine HCl..... 1,464 3,051 3,661
15 mg/2.5 mL Pseudoephedrine HCl... 732 1,525 1,830
30 mg/5 mL Pseudoephedrine HCl..... 732 1,525 1,830
30 mg/2.5 mL Pseudoephedrine HCl... 366 762 915
60 mg/5 mL Pseudoephedrine HCl..... 366 762 915
------------------------------------------------------------------------
Provisions of CMEA
Overview. Before CMEA, requirements for sales of products
containing ephedrine, pseudoephedrine, and phenylpropanolamine, which
were then called regulated drug products or drug products regulated
pursuant to 21 CFR 1300.02(b)(28)(i)(D), distinguished between in-
person sales to a purchaser (retail distribution) and mail order sales,
which covered any sale where the product is shipped using the Postal
Service or any common or private carrier. Mail order sellers had to
file monthly reports with DEA if they sold a purchaser drug products
containing more than a threshold quantity (9 grams for pseudoephedrine
and phenylpropanolamine (maximum per package of 3 grams), 24 grams for
ephedrine combination products), regardless of how the products were
packaged. Retailers conducting face-to-face transactions had to
maintain records for sales above the same thresholds except that, as
noted above, sales of products in blister packs generally were not
covered. The status of such sales was discussed in detail in an
interpretive rule (69 FR 2862, January 14, 2004; corrected at 69 FR
3198, January 22, 2004). Either type of seller had to register with DEA
if they sold the products to individuals in amounts above the threshold
quantity. Only two persons are registered as retail distributors.
The CMEA provisions on retail sales create differing requirements
for the various types of retail sales. As discussed further below,
Table 2 summarizes the applicability of the CMEA provisions as well as
existing DEA provisions to the different types of sellers.
Table 2.--Summary of Requirements by Type of Seller
----------------------------------------------------------------------------------------------------------------
Regulated sellers
(store) Mobile retail vendors Mail order sellers
----------------------------------------------------------------------------------------------------------------
Daily sales limit.................... 3.6 gm/chemical........ 3.6 gm/chemical........ 3.6 gm/chemical.
30-day sales limit................... ....................... 7.5 gm................. 7.5 gm.
Blister packs........................ Yes.................... Yes.................... Yes.
Storage.............................. Behind the counter Locked cabinet......... NA.
Locked cabinet.
Logbook.............................. Yes.................... Yes.................... NA.
Customer ID.......................... Examine photo ID....... Examine photo ID....... Verify ID.
Train employees...................... Yes.................... Yes.................... NA.
Self-Certify......................... Yes.................... Yes.................... NA.
Notice of misrepresentation.......... Yes.................... Yes.................... NA.
Monthly reports...................... No..................... No..................... Yes.
Theft and loss reports............... Yes.................... Yes.................... Yes.
----------------------------------------------------------------------------------------------------------------
CMEA defines nonprescription drug products containing ephedrine,
pseudoephedrine, or phenylpropanolamine as ``scheduled listed chemical
products.'' Direct, in-person sales to a customer, whether at a
permanent store or movable site (e.g., kiosk, flea market), are subject
to new requirements for training of employees who take part in the sale
of scheduled listed chemical products and certification to DEA that the
employees have been trained. These sellers, called ``regulated
sellers'' in CMEA, must also check photo identifications of purchasers
and maintain specific records of each sale of scheduled listed chemical
products. Under CMEA, the
[[Page 56011]]
only sales exempt from recordkeeping are sales of single packages of
pseudoephedrine where the package contains not more than 60 milligrams.
DEA will issue future guidance to further clarify remaining questions
about how regulated entities may meet this regulation's training
requirements.
The recordkeeping and reporting requirements for mail order sales
basically remain the same as under the previous regulations, except
that a waiver in the prior law that covered non face-to-face
distributions by retail distributors has been eliminated for scheduled
listed chemical products. As a result, retail stores that deliver these
products to customers by mail or delivery services will need to comply
with the provisions for mail order sales reporting for these
transactions. Mail order sellers must file monthly reports with DEA.
CMEA adds the requirement that these sellers verify the purchaser's
identity prior to shipping.
As noted above, CMEA changes the limits on retail sales. Daily
sales are now limited to a maximum of 3.6 grams of each chemical in
scheduled listed chemical products. Mobile retail vendors and mail
order vendors must also limit sales to an individual purchaser to 7.5
grams of each chemical in scheduled listed chemical products in any 30-
day period. CMEA limits purchases by an individual purchaser to 9 grams
of each chemical in scheduled listed chemical products in any 30-day
period, not more than 7.5 grams of which may be imported by means of a
private or commercial carrier or the U.S. Postal Service. Any imports
of scheduled listed chemical products subject to the 7.5 gram purchase
limit under CMEA must also otherwise comply with all other applicable
Federal and State laws regarding their importation, including the
Federal, Food, Drug, and Cosmetic Act. This provision is not included
in this rule, but will be addressed in other rulemakings DEA is
promulgating to implement the various provisions of the Combat
Methamphetamine Epidemic Act of 2005. Finally, CMEA exempts all retail
sellers and mail order distributors selling the products at retail from
registration. The following sections discuss each of the statutory
provisions in more detail.
Definitions. CMEA revises the definition of ``regulated
transaction,'' adds several new definitions, and removes the definition
of ``ordinary over-the-counter pseudoephedrine or phenylpropanolamine
product.'' CMEA adds a definition of ``scheduled listed chemical
product,'' which means any nonprescription product that contains
ephedrine, pseudoephedrine, or phenylpropanolamine and is marketed
lawfully under the Federal Food, Drug, and Cosmetic Act. References to
ephedrine, pseudoephedrine, or phenylpropanolamine include their salts,
optical isomers, and salts of optical isomers. CMEA exempts scheduled
listed chemical products sold at retail by a regulated seller or by
persons that sell the product for personal use and ship the product by
mail or private or common carriers (mail order sellers) from the
definition of regulated transaction. It also removes other references
to the sale of these chemicals in drug products from the definition of
regulated transactions. DEA notes that further clarification regarding
regulated transactions will be addressed in a separate rulemaking.
These changes remove retail sellers and mail order sellers from the
registration system; in practice, retail and mail order sellers have
not registered because they limited sales to below threshold quantities
and to products sold in blister packs. At present, only two persons are
registered as retail distributors.
CMEA adds definitions of ``regulated seller,'' to mean a retail
distributor (including a pharmacy and mobile retail vendors), and ``at
retail,'' to mean sale or purchase for personal use. It also revises
the definition of ``retail distributor'' to remove the sentence
referring to below threshold quantities. This change subjects all
sales, except for sales of single packages containing not more than 60
milligrams of pseudoephedrine, to recordkeeping requirements.
Sales limits. Effective April 8, 2006, CMEA limits sales to an
individual to 3.6 grams per day of each chemical in scheduled listed
chemical products regardless of the number of purchases. Mobile retail
vendors and mail order sellers may not sell an individual more than 7.5
grams of each chemical in scheduled listed chemical products in a 30-
day period. A seller who violates these provisions is subject to civil
penalties and possible criminal penalties.
Purchase limits. CMEA imposes a 9 gram purchase limit in a 30-day
period on individuals. Not more than 7.5 grams of the 9 grams may be
imported by means of common/contract carrier or the U.S. Postal
Service. Any imports of scheduled listed chemical products subject to
the 7.5 gram purchase limit under CMEA must also otherwise comply with
all other applicable Federal and State laws regarding their
importation, including the Federal, Food, Drug, and Cosmetic Act. This
provision is not included in this rule, but will be addressed in other
rulemakings DEA is promulgating to implement the various provisions of
the Combat Methamphetamine Epidemic Act of 2005. In other rulemakings
based on new CMEA provisions, imports, other than this 30-day
individual limit, are limited to DEA registrants that have been issued
a quota to import. (These rulemakings will be separately published in
the Federal Register.) A purchaser who violates these limits is subject
to criminal penalties.
Thirty-day limit. CMEA creates a 30-day sales limit. DEA interprets
this to mean a rolling calendar where the sales limit is based on sales
to the purchaser in the previous 30 days. DEA interprets the per day
limit to refer to midnight to midnight, not a rolling 24-hour clock.
Blister packs. Effective April 8, 2006, nonliquid forms of
scheduled listed chemical products (including gel capsules) must be
sold only in blister packs, with no more than two dosage units per
blister unless blister packs are technically infeasible. In that case,
the dosage units must be in unit dose packets or pouches.
Product placement: Behind counter or locked cabinet. CMEA requires
that on and after September 30, 2006, scheduled listed chemical
products must be stored behind the counter or, if in an area where the
public has access, in a locked cabinet. Although DEA is not including
cabinet specifications in the rule, a locked cabinet should be
substantial enough that it cannot be easily picked up and removed. In a
store setting, the cabinet should be similar to those used to store
items, such as cigarettes, that can be accessed only by sales staff.
Logbooks. CMEA requires retail sellers to maintain logbooks on and
after September 30, 2006. If a retailer maintains the logbook on paper,
DEA is requiring that the logbook be bound, as is currently the case
for records of sales of Schedule V controlled substances that are sold
without a prescription. Bound blank logbooks and ledger books meeting
DEA's regulatory requirements are readily available on the commercial
market. If the logbook is maintained electronically, the records must
be readily retrievable by the seller and any DEA or other authorized
law enforcement official. Logs must be kept for two years from the date
the entry was made. The logs must include the information entered by
the purchaser (name, address, signature, date, and time of sale) and
the quantity and form of the product sold.
Where the record is entered electronically, the computer system may
enter the date and time automatically. An electronic signature system,
such as
[[Page 56012]]
the ones many stores use for credit card purchases, may be employed to
capture the signature for electronic logs. The information that the
seller must enter may be accomplished through a point-of-sales system
and bar code reader.
DEA is aware that in some cases, such as pharmacy counters where
the computer is behind the pharmacy counter, it may be difficult for
the purchaser to enter the information electronically. DEA is seeking
comments on whether systems currently used to capture signatures for
credit or debit card purchases can be reprogrammed to allow customers
to enter name and address, as well as the signature. DEA also
recognizes that some purchasers will find it difficult or impossible to
enter the information themselves. In these cases, the seller should ask
for the name and address and enter it, rather than simply copy it off
the photo ID. Regardless of how the information is entered, however,
there must be a mechanism to allow the customer to sign the logbook.
Verification of photo ID. CMEA requires on and after September 30,
2006, that an individual must present an identification card that
includes a photograph and is issued by a State or the Federal
government or a document considered acceptable under 8 CFR
274a.2(b)(1)(v)(A) and (B). Those documents currently include the
following:
United States passport (unexpired or expired).
Alien Registration Receipt Card or Permanent Resident
Card, Form I-551.
An unexpired foreign passport that contains a temporary I-
551 stamp.
An unexpired Employment Authorization Document issued by
the Immigration And Naturalization Service which contains a photograph,
Form I-766; Form I-688, Form I-688A, or Form I-688B.
In the case of a nonimmigrant alien authorized to work for
a specific employer incident to status, an unexpired foreign passport
with an Arrival-Departure Record, Form I-94, bearing the same name as
the passport and containing an endorsement of the alien's nonimmigrant
status, so long as the period of endorsement has not yet expired and
the proposed employment is not in conflict with any restrictions or
limitations identified on the Form I-94.
For individuals 16 years of age or older:
A driver's license or identification card containing a
photograph, issued by a State or an outlying possession of the United
States. If the driver's license or identification card does not contain
a photograph, identifying information shall be included such as: Name,
date of birth, sex, height, color of eyes, and address.
School identification card with a photograph.
Voter's registration card.
U.S. military card or draft record.
Identification card issued by Federal, State, or local
government agencies or entities. If the identification card does not
contain a photograph, identifying information shall be included such
as: Name, date of birth, sex, height, color of eyes, and address.
Military dependent's identification card.
Native American tribal documents.
United States Coast Guard Merchant Mariner Card.
Driver's license issued by a Canadian government
authority.
For individuals under age 18 who are unable to produce a document
from the list above of acceptable documents for persons age 16 years
and older:
School record or report card.
Clinic doctor or hospital record.
Daycare or nursery school record.
The list of acceptable forms of identification, as cited in CMEA,
may change (``in effect on or after the date of enactment''). DEA has
no discretion to alter the list.
Notice on misrepresentations. CMEA requires that on and after
September 30, 2006, the logbooks include a notice to purchasers that
entering false statements or misrepresentations may subject the
purchaser to criminal penalties under section 1001 of title 18 of the
U.S. Code. DEA is requiring the inclusion of the following language in
all logbooks:
Warning: Section 1001 of Title 18, United States Code, states
that whoever, with respect to the logbook, knowingly and willfully
falsifies, conceals, or covers up by any trick, scheme, or device a
material fact, or makes any materially false, fictitious, or
fraudulent statement or representation, or makes or uses any false
writing or document knowing the same to contain any materially
false, fictitious, or fraudulent statement or entry, shall be fined
not more than $250,000 if an individual or $500,000 if an
organization, imprisoned not more than five years, or both.
With both a bound logbook and electronic log, inclusion of this
notice may present difficulties. If the purchaser is not able to enter
the information electronically in a store, providing the notice
electronically will not meet the requirements. If not feasible in these
situations, one alternative is that the seller prominently display the
notice where the purchaser will see it when entering or providing the
information.
Verification of identity for mail order sales. The Controlled
Substances Act (21 U.S.C. Sec. 830(b)(3)) requires that each regulated
person, as defined in the Act, who engages in a transaction that
involves ephedrine, pseudoephedrine, or phenylpropanolamine (including
drug products containing these chemicals) and uses or attempts to use
the Postal Service or any private or commercial carrier shall, on a
monthly basis, submit a report of each transaction conducted during the
previous month to DEA. Data contained in the report includes, but is
not limited to: Name of purchaser; quantity and form of ephedrine,
pseudoephedrine, or phenylpropanolamine purchased; and the address to
which such ephedrine, pseudoephedrine, or phenylpropanolamine was sent.
DEA has specified further information regarding mail order reports by
regulation (21 CFR 1310.05).
CMEA requires that effective April 8, 2006, the mail order seller
confirm the identity of the purchaser prior to shipping the product.
CMEA requires DEA to establish procedures for this identity
verification by regulation. To parallel the identification requirements
for regulated sellers, and to provide reasonable assurance that the
person purchasing the product is who they claim to be, DEA is requiring
that mail order sellers verify the identity of the purchaser by
obtaining a copy of an identification card that includes a photograph
and is issued by a State or the Federal government or a document
considered acceptable under 8 CFR 274a.2(b)(1)(v)(A) and (B). Such a
copy may be obtained through use of the Postal Service, facsimile
transmission of a photocopy, or the scanning and transmission of the
identification card, among other examples. The mail order seller must
determine that the name and address on the identification card
correspond to the name and address provided to the mail order seller as
part of the sales transaction. If the information cannot be confirmed,
the seller may not ship the items.
Selling at retail. CMEA requires that on and after September 30,
2006, a regulated seller must not sell scheduled listed chemical
products unless it has self-certified to DEA, through DEA's Web site.
The self-certification requires the regulated seller to confirm the
following:
Its employees who will be engaged in the sale of scheduled
listed chemical products have undergone training regarding provisions
of CMEA.
Records of the training are maintained.
Sales to individuals do not exceed 3.6 grams of ephedrine,
pseudoephedrine, or phenylpropanolamine per day. (Mobile
[[Page 56013]]
retail vendors must also confirm that sales to an individual in a 30-
day period do not exceed 7.5 grams.)
Nonliquid forms are packaged as required.
Scheduled listed chemical products are stored behind the
counter or in a locked cabinet.
A written or electronic logbook containing the required
information on sales of these products is properly maintained.
The logbook information will be disclosed only to Federal,
State, or local law enforcement and only to ensure compliance with
Title 21 of the United States Code or to facilitate a product recall.
The seller must train its employees and self-certify before either the
seller or individual employees may sell scheduled listed chemical
products. The self-certification is subject to the provisions of 18
U.S.C. 1001. A regulated seller who knowingly or willfully self-
certifies to facts that are not true is subject to fines and
imprisonment.
Training. DEA has developed training that it has made available on
its Web site (http://www.deadiversion.usdoj.gov). Employers must use
the content of this training in the training of their employees who
sell scheduled listed chemical products. An employer may include
additional content to DEA's, but DEA's content must be included in the
training. For example, a regulated seller may elect to incorporate
DEA's content into initial training for new employees.
Training records. On and after September 30, 2006, each employee of
a regulated seller who is responsible for delivering scheduled listed
chemical products to purchasers or who deals directly with purchasers
by obtaining payment for the scheduled listed chemical products must
undergo training and must sign an acknowledgement of training received
prior to selling scheduled listed chemical products. This record must
be kept in the employee's personnel file.
Self-certification. On and after September 30, 2006, the regulated
seller must self-certify to DEA as described above. DEA has established
a Web page that will allow regulated sellers to complete the self-
certification on-line and submit it to DEA electronically. A self-
certification certificate will be generated by DEA upon receipt of the
application. The regulated seller will print this self-certification
certificate, or if the regulated seller is unable to print it, DEA will
print and mail the certificate to the self-certifier. The regulated
sellers will be classified into three categories: Chain stores that are
currently controlled substance registrants, chain stores that are not
registrants, and individual outlets. Chain stores wishing to file self-
certifications for more than 10 locations will have to print or copy
the form electronically and submit the information to DEA by mail. DEA
will work with these persons to facilitate this process. Persons
interested in this self-certification option should contact DEA for
assistance. For current DEA registrants, the system will pre-populate
the form with basic information.
Because CMEA specifically states that a separate self-certification
is required for each separate location at which scheduled listed
chemical products are sold, mobile retail vendors must self-certify for
each location at which sales transactions occur. This self-
certification for locations is required even if the same person or
persons sell at each of the different locations.
DEA requests comments on who should be authorized to sign the self-
certification for the regulated seller. The person should be in a
position to know that all employees who require training have been
trained and that the retail outlet is complying with all other
requirements and should be authorized to sign documents for the
regulated seller.
Time for self-certification. CMEA requires that regulated sellers
self-certify by September 30, 2006. Although CMEA appears to link self-
certification to training of each individual who will deliver the
products to customers, the high rate of employee turnover in the retail
sector could require frequent submissions of self-certifications if the
regulated seller needed to recertify each time a new employee is
trained. DEA, therefore, will require regulated sellers to self-certify
by September 30, 2006. When regulated sellers file the initial self-
certification, DEA will assign them to groups. Each group will have an
expiration date that will be the last day of a month from 12 to 23
months after the initial filing. After the second self-certification,
regulated sellers will be required to self-certify annually. It is the
responsibility of the regulated seller to ensure that all employees
have been trained prior to self-certifying each time. It is also the
responsibility of the regulated seller to ensure that they self-certify
before the self-certification lapses. DEA requests comments on annual
self-certifications versus certifications whenever new employees are
trained or quarterly self-certification.
Fee for self-certification. In a separate Notice of Proposed
Rulemaking, DEA is proposing that regulated sellers who are not DEA
registrants pay a fee for self-certification. While DEA is not making
this fee effective with this Interim Rule, DEA is providing background
discussion and rationale for this decision here so that all persons
will be aware of this issue.
Section 886a of the CSA defines the Diversion Control Program as
``the controlled substance and chemical diversion control activities of
the Drug Enforcement Administration,'' which are further defined as the
``activities related to the registration and control of the
manufacture, distribution and dispensing, importation and exportation
of controlled substances and listed chemicals.'' The CSA also states
that reimbursements from the Diversion Control Fee Account ``* * *
shall be made without distinguishing between expenses related to
controlled substances activities and expenses related to chemical
activities.'' [Pub. L. 108-447 Consolidated Appropriations Act of
2005].
In addition, Section 111(b)(3) of the Departments of Commerce,
Justice, and State, the Judiciary, and Related Agencies Appropriations
Act of 1993 (Pub. L. 102-395), codified at 21 U.S.C. 886a(3), requires
that ``fees charged by the Drug Enforcement Administration under its
diversion control program shall be set at a level that ensures the
recovery of the full costs of operating the various aspects of that
program.''
CMEA implements new requirements governing the sale of scheduled
listed chemical products, defined as nonprescription drug products
containing ephedrine, pseudoephedrine, or phenylpropanolamine. CMEA
requires self-certification for all regulated sellers of scheduled
listed chemical products. CMEA also exempts retail distributors from
registration requirements under the CSA; however, in practice, retail
distributors have not previously registered with DEA because they
limited their sales to below threshold quantities and to products sold
in blister packs.
DEA considers the self-certification requirements of the CMEA to
fall within the legal definition of control as governed by Section 886a
of the CSA (see above). Accordingly, these activities fall under the
general operation of the Diversion Control Program and are subject to
the requirements of the Appropriations Act of 1993 that mandates that
fees charged shall be set at a level that ensures the recovery of the
full costs of operating the various aspects of the Diversion Control
Program. The self-certification requirements of CMEA fall under these
[[Page 56014]]
``various aspects.'' Therefore, in its Notice of Proposed Rulemaking,
DEA will propose to charge a fee for each self-certification to comply
with these statutory requirements.
DEA is proposing, in its separate Notice of Proposed Rulemaking,
that the fee for self-certification will cover all associated costs,
including the initial one-time costs of setting up the self-
certification program, Web site, and programmatic infrastructure, as
well as ongoing costs associated with the provision of self-
certifications, call center support, maintenance of the self-
certification system, printing costs for certificates that regulated
sellers cannot print, financial management, and other related costs.
DEA must establish a program to train its employees to provide
information regarding, and accept, self-certifications and must
establish the infrastructure necessary for the program. Required
systems include creation of history, renewal cycles, investigative
tools, business validation rules, and development and maintenance of
the self-certification Web site.
In its Notice of Proposed Rulemaking, DEA is proposing that when
regulated sellers submit a self-certification online via the DEA self-
certification Web site that they pay a fee by credit card at the time
of self-certification. DEA calculated this fee based on estimated set-
up costs in Fiscal Year 2006 ($117,198) and Fiscal Year 2007 operating
costs ($1,624,443) totaling $1,741,641, as shown below in Table 3. The
initial systems development and set-up costs will not be repeated in
subsequent years. The operational and maintenance costs for Fiscal Year
2008 are estimated to be $1,099,782. Total annual costs associated with
operating the self-certification process include staff costs,
operational and administrative costs, Web hosting, monitoring and
maintenance costs (including hardware and software maintenance), and
annual inflation adjustments. Therefore, DEA will propose in its
separate Notice of Proposed Rulemaking, that the 89,000 persons DEA
estimates will self-certify with the Administration would pay a self-
certification fee of $32 for the Fiscal Year 2006 through Fiscal Year
2008 period.
To calculate the fee, DEA divided the total costs for Fiscal Years
2006 through 2008 by the anticipated population of affected regulated
sellers of 89,000. DEA estimates 89,000 current retail vendors of
scheduled listed chemical products. All costs are shown in the table
below for Fiscal Years 2006 through 2008. The self-certification costs
reflect the cost per each self-certification per each facility as
required by CMEA.
Table 3.--Self-Certification Costs and Fee Calculation
----------------------------------------------------------------------------------------------------------------
Project detail 2006 * 2007 2008 Total cost
----------------------------------------------------------------------------------------------------------------
Planning \1\............................................ $3,029 $36,343 $37,002 $76,373
Design, Development, Deployment \2\..................... 43,512 703,863 71,662 819,037
Call center, Finance, Mail room, Printing \3\........... 59,253 711,034 723,916 1,494,203
Maintenance \4\......................................... 11,405 173,203 176,341 360,949
Enhancements \5\........................................ ............ 90,861 90,861
-------------------------------------------------------
Total............................................... 117,198 1,624,443 1,099,782 2,841,423
=======================================================
Population.............................................. ............ 89,000 89,000 ............
Cost per certification.................................. ............ ............ ............ 31.92
----------------------------------------------------------------------------------------------------------------
\1\ Planning is the costs to the government to plan the development, design, and implementation of the self-
certification online system. This item is the costs of three percent of the time used by five government
employees to supervise and manage software development.
\2\ Design, development and deployment of the online self-certification system represents the cost to pay
contract programmers, web designers, system administrators and database administrators to design, develop, and
deploy the new application. These costs include testing and quality assurance of the new software and
establishment of new security controls. The self-certification system will be designed with business
validation rules and provide investigative tools to ensure compliance with the new legislation.
\3\ Call Center, finance, mail room and printing represent the following costs.
DEA currently operates a registration Call Center. Based on current Call Center customer service
representative costs, this item includes the cost of the additional time required to respond to inquiries
regarding the CMEA self-certification program. DEA provides call center assistance to approximately 400,000
persons annually. DEA estimates that CMEA will increase that population by 89,000 persons, a 23% increase.
DEA currently operates a registration Finance Center. Based on current Finance Center employee costs,
this item includes the cost of the additional time required to process fees collected from CMEA self-
certifications.
DEA currently operates a registration Mail Room. Based on current Mail Room clerical costs, this item
includes cost of employee time for handling and mailing out of CMEA self-certification certificates if the
self-certifier is unable to print the certificate.
DEA currently operates a Printing and Mailing Facility. Based on current Printing Costs, this item
includes paper, toner, envelope, and postage costs to mail out the CMEA self-certification certificates.
\4\ Maintenance. This item includes all employee salaries, hardware maintenance, and software license costs
associated with the daily operation of the self-certification system.
\5\ Enhancements. This item is the enhancement of the system to add the ability to maintain a history of changes
to records and to allow for yearly renewal of records.
* 2006 is for 1 month of operations.
To minimize administrative and collection burdens, it is DEA's
policy to round to the nearest dollar when calculating fees. The annual
self-certification fee will be clearly defined on the self-
certification Web site. However, in setting this fee DEA notes that it
is based on assumptions about the total number of regulated sellers who
will be required to self-certify. Should the total number of regulated
sellers be significantly more or less than 89,000, DEA may adjust the
self-certification fee as appropriate through future rulemakings. In
any case, DEA will not exceed its operating budget as authorized by
Congress.
In implementing this fee, DEA also notes that many of the affected
regulated sellers are already registered with DEA to dispense
controlled substances and therefore already pay a registration/
reregistration fee to DEA. While these existing registrants are
required by the CMEA to self-certify with DEA if selling scheduled
listed chemical products, in its Notice of Proposed Rulemaking, DEA is
proposing that the self-certification fee be waived upon submission of
an active DEA registration number.
Other DEA activities associated with self-certification and
compliance with CMEA include enforcement and judicial proceedings. CMEA
gives DEA the authority to prohibit a regulated seller
[[Page 56015]]
from selling scheduled listed chemical products for certain violations
of CMEA. If DEA issues an order to a regulated seller prohibiting that
regulated seller from selling scheduled listed chemical products, the
regulated seller is entitled to an administrative hearing if the seller
files a timely request for a hearing. The costs of these enforcement
activities and the subsequent proceedings must be supported through
fees pursuant to the above described statutory requirements. DEA notes
that these costs are not recovered in these fee calculations as DEA is
uncertain of their utilization. However, once DEA is able to determine
the frequency of use of these tools, and their associated costs, these
costs will be recovered through fees associated with self-certification
as established in future rulemakings.
Relationship to State Laws
Many States have enacted laws and/or regulations that impose
conditions on the sale of scheduled listed chemical products.
Eight states have enacted and six others have proposed
legislation that makes these products Schedule V controlled substances.
Among other requirements, Schedule V substances may be sold only by a
pharmacist to individuals who are at least 18. A logbook of the sales
must be maintained.
Sixteen states have passed laws limiting sales to a
pharmacist or pharmacy technicians or requiring that the products be
stored behind the counter.
Twenty-seven states require a photo ID for such purchases.
Twenty-six states require a signed logbook.
Twenty-seven states impose single transaction limits.
Nineteen states have monthly or weekly limits.
Twenty-seven states have exemptions for prescription drugs
and various forms of over-the-counter (OTC) drugs (liquids, pediatric
forms, etc.).
One state requires a prescription to purchase these
products.
As the list indicates, the State laws vary considerably. Some parts
of a State law may be less stringent than the CMEA requirements; other
parts may be more stringent. CMEA does not preempt those requirements
under State laws/regulations that are more stringent than the CMEA
requirements. Simply put, all persons subject to CMEA must comply with
the CMEA and the laws in the State(s) in which they sell scheduled
listed chemical products at retail. Where the CMEA is less stringent
than a State law (e.g., the State limits sales to licensed pharmacists
or pharmacy technicians where CMEA does not), the State requirements
continue to be in force. If there are State requirements that are less
stringent than the CMEA provisions (e.g., higher daily limits,
exemptions of some products), CMEA supersedes the provisions. DEA
emphasizes that if State requirements for records cover the information
CMEA mandates, the record created to meet the State law is sufficient
to meet DEA's regulation.
Regarding quantity sold, units may be specified in terms of the
weight of the product or in terms of the number of packages sold.
Logbook systems that display the quantity of the product sold by UPC
code are sufficient to meet DEA's requirements. These options do not
exclude other methods of displaying the quantity sold.
DEA is accepting public comment on the interaction between state
and federal logbook requirements. In addition, DEA is accepting public
comment on the broader interplay and potential overlap between state
regulations and CMEA requirements, and whether compliance with state
regulations, if comparable to or more stringent than an associated CMEA
requirement, should constitute compliance with such Federal
requirement.
Discussion of the Rule
To make the rule easier to follow for regulated sellers and mail
order/Internet sellers, DEA is creating a new part 1314 that will
include all requirements related to the sale of scheduled listed
chemical products to end users. Regulations for the retail sale of
these products that currently exist in part 1310 will either be moved,
if still applicable, or removed. The new statutory definitions of
``scheduled listed chemical product,'' ``regulated seller,'' ``mobile
retail vendor,'' and ``at retail'' are being added to part 1300
(Definitions). The definition of ``retail distributor'' is also being
revised. Most of the new provisions in this Interim Final Rule are
drawn from section 711 of the USA PATRIOT Improvement and
Reauthorization Act of 2005.
Part 1314 is divided into four subparts. Subpart A contains
requirements that apply to any retail sale. Subpart B applies to sales
by regulated sellers (i.e., sales for personal use, both in number of
sales and volume of sales, either directly to walk-in customers or in
face-to-face transactions, by stores or mobile retail vendors). Subpart
C applies to retail sales that are shipped by mail or common or private
carriers, regardless of how those sales are ordered. Subpart D contains
the procedural requirements for issuing and responding to an order to
show cause why the regulated seller or distributor should not be
prohibited from selling scheduled listed chemical products.
Sections 1314.01 and 1314.02 simply state the scope and
applicability of the part. Section 1314.03 defines ``mail order sales''
using the language from Sec. 1310.03(c) and further clarifies that
mail order includes any retail sale for personal use where the product
is shipped by U.S. mail or by private or common carriers whether the
order is received by mail, phone, fax, the Internet, or any method
other than a face-to-face transaction.
Section 1314.05 incorporates the statutory requirement for blister
packs for nonliquids unless such packaging is not technically feasible.
Section 1314.10 states the regulations do not preempt State laws
unless there is a positive conflict between the laws and the
regulations such that the two cannot consistently stand together. This
language is drawn from 21 U.S.C. 903.
Section 1314.15 copies the requirements for reporting losses,
including thefts, that currently exist in Sec. 1310.06. DEA emphasizes
that thefts must be reported as well as unusual or excessive losses or
disappearances.
In subpart B, Sec. 1314.20 includes the statutory requirements
limiting sales, the daily limit of 3.6 grams and the 30-day mobile
retail vendor limit of 7.5 grams. The 30-day limit of 9 grams applies
to purchasers who are not addressed by this regulation. As noted
previously, this provision is not included in this rule, but will be
addressed in other rulemakings DEA is promulgating to implement the
various provisions of the Combat Methamphetamine Epidemic Act of 2005.
Section 1314.25 incorporates CMEA's provisions for storing the
products behind the counter or in a locked cabinet. Mobile retail
vendors are required to store the product in a locked cabinet.
Section 1314.30 covers recordkeeping (logbook) requirements from
CMEA as well as requirements currently in Sec. 1310.04. In addition to
CMEA's requirements, DEA has copied the existing requirements from part
1310 relative to where the records must be kept (at the place of
business or at a central location if DEA has been notified). DEA is
including in this section language stating that if a regulated seller
is already maintaining records of these sales under State law, those
records may be used to meet this requirement if they include the
information specified in CMEA.
[[Page 56016]]
The part 1310 requirements incorporated into the amended
regulations do not include the provision that a regulated seller with
multiple locations must have a system to detect a person purchasing
from multiple locations owned or operated by the regulated seller. CMEA
in section 711(f) provides for a civil penalty for a person who sells
at retail a scheduled listed chemical product in violation of the daily
3.6 gram sales limit, ``knowing at the time of the transaction involved
(independent of consulting the logbook * * *) that the transaction is a
violation.'' While the availability of civil penalties is not
necessarily co-extensive with the chemical control requirements of the
new law, DEA is not mandating, by this rule, that regulated sellers,
other than mail order and mobile retail vendors, track multiple sales
to individuals on a single day within the same retail outlet or across
outlets of the same company. CMEA explicitly requires mail order
outlets and mobile retail vendors to limit sales to an individual to
7.5 grams in a 30-day period; it imposes no similar requirement on
other retail sellers to limit 30-day sales to individuals. The 30-day
limit of 9 grams is imposed on the purchaser, not the seller.
Section 1314.35 incorporates the statutory requirements for
training of sales personnel. DEA has developed training material, which
it has made available on its Web site (http://www.deadiversion.usdoj.gov
).
Section 1314.40 covers CMEA's requirements on self-certification.
As discussed above, DEA is setting an annual period for renewal of the
certification.
DEA has developed a web site that will allow many regulated sellers
to complete and submit the self-certification form on line and print
out a self-certification certificate for their records. The information
required will include the name and address of the location and a point
of contact. The regulated sellers will be classified into three
categories: Chain stores that are currently controlled substance
registrants, chain stores that are not registrants, and individual
outlets. Chain stores wishing to file self-certifications for more than
10 locations will have to print or copy the form electronically and
submit the information to DEA by mail. DEA will work with these persons
to facilitate this process. Persons interested in this self-
certification option should contact DEA for assistance. For current DEA
registrants, the system will pre-populate the form with basic
information.
Section 1314.45 incorporates the privacy protection provisions of
CMEA. These provisions define who may access the sales records and the
use to which the data may be put. They also provide a good faith
protection to regulated sellers that release the data to law
enforcement authorities.
Section 1314.50 includes CMEA's provision that states that a seller
may take reasonable measures to guard against employing people who may
present a risk of diversion. The measures may include asking about
convictions of any crimes involving controlled substances or scheduled
listed chemical products.
In subpart C, Sec. 1314.100 incorporates the daily and 30-day
sales limits for mail order sales. Section 1314.105 provides the above
described requirements for verifying identity of the purchaser prior to
shipment of the product. Section 1314.110 covers reports on mail order
sales and is copied from Sec. 1310.06. Finally, Sec. 1314.115 copies
language from Sec. 1310.05(f) on distributions not subject to
reporting (sample packages, sales to long-term care facilities,
prescription drugs).
CMEA added to 21 U.S.C. 842 a provision that authorizes DEA to
prohibit a regulated seller or a mail order seller from selling
scheduled listed chemical products if the seller is found to be
knowingly or recklessly in violation of the provisions controlling
retail sales. To take this step, DEA must issue an order to show cause,
as it does to suspend or revoke registrations. DEA is including in
subpart D in Sec. Sec. 1314.150 and 1314.155 provisions on the process
of issuing and responding to an order to show cause. These sections are
taken from part 1309 and are the same as DEA uses to issue and reach a
conclusion on orders to show cause under other DEA programs. If DEA
issues an order to show cause, the regulated seller or mail order
distributor must respond to the order to show cause within 30 days of
service of the order to show cause. The regulated seller or mail order
seller may request a hearing. The seller may continue to sell scheduled
listed chemical products until DEA issues a final order. If DEA finds
that a regulated seller or mail order distributor poses an imminent
danger to public health or safety, DEA may suspend the seller's right
to sell scheduled listed chemical products pending a final decision on
the order to show cause.
Other Changes
As noted above, CMEA's new definitions will be added to Sec.
1300.02. In addition, the definition of ``regulated transaction'' is
revised as mandated by section 712 of CMEA.
In Sec. 1309.71, paragraph (a)(2), which requires certain
ephedrine products to be stored behind the counter, is being removed
because the new CMEA requirements supersede it. CMEA imposes the same
restrictions on all scheduled listed chemical products unless they are
stored in a locked cabinet in areas where the public has access.
In Sec. 1310.04, paragraph (f)(1)(ii) is revised to indicate that
the thresholds presented in the previous paragraph and in paragraph (g)
for ephedrine, pseudoephedrine, and phenylpropanolamine apply only to
non-retail distribution, import, and export and references part 1314
for retail sales. The table of thresholds for retail distribution has
been removed.
In Sec. 1310.05, paragraph (f)(2) is revised to remove retail
sales of scheduled listed chemical products.
Sections 1310.14 and 1310.15 are being removed because the CSA no
longer treats certain ephedrine products differently from other
scheduled listed chemical products. These sections are being replaced
by new Sec. 1310.16, which states that a manufacturer may apply to
have a scheduled listed chemical product exempted from the requirements
if DEA determines that the product cannot be used in the illicit
manufacture of methamphetamine. DEA is adopting the application process
that currently applies to ephedrine products that include other
medically significant ingredients (Sec. 1310.14).
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 provides, however,
that agencies may be excepted 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).
With publication of this interim rule, DEA is invoking this ``good
cause'' exception to the APA's notice requirement based on the
combination of several extraordinary factors. CMEA requires that on and
after September 30, 2006, regulated sellers selling scheduled listed
chemical products at retail shall self-certify with DEA in order to
[[Page 56017]]
continue to sell these products. CMEA imposes sales limits, purchase
limits, product placement requirements, mail order customer
identification requirements, and other requirements, some of which must
be specified by regulation, all with an effective date of September 30,
2006. Based on the effective date of this law, it is impracticable for
DEA to comply with the APA's notice and comment requirements due to the
limited time involved. Were DEA not to publish this Interim Rule with
Request for Comment, regulated sellers selling scheduled listed
chemical products at retail would not be able to self-certify by the
date specified in the law. Were this not to occur, these regulated
sellers would be forced to stop selling scheduled listed chemical
products, or violate the law by doing so. Mail order distributors would
also have difficulty, as DEA is required by regulation to establish
procedures for these persons to identify their customers prior to
shipping product. Without these regulations, mail order distributors
would not be able to sell scheduled listed chemical products.
Therefore, DEA also finds that it is contrary to the public interest
not to issue these regulations as an Interim Rule, thereby allowing
regulated sellers and mail order distributors to fully comply with the
requirements of CMEA. While the CMEA was signed into law in March of
2006, most of the law must be in effect by September 30, 2006. The
broad scope of the new law, as well as the expedited effective dates,
is a clear reflection of Congress's concern about the nation's growing
methamphetamine epidemic and its desire to act quickly to prevent
further illicit use of these chemicals.
In light of these factors, DEA finds that ``good cause'' exists to
issue this interim rule without engaging in traditional notice and
comment rulemaking. 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)). Based on the
totality of the circumstances associated with the CMEA, however, DEA
finds that invocation of the ``good cause'' exception is justified.
As noted throughout this document, DEA is seeking comments on
details of implementation, particularly related to self-certification,
where it has discretion.
Under section 553(d) of the APA, 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.'' Since it would be unnecessary to provide a
delayed effective date for a change to the law that has already taken
effect DEA has dispensed with the 30-day delayed effective date
requirement. The sales limits and blister pack provisions became
effective on April 8, 2006. The requirements for logbooks, training,
and self-certification become effective September 30, 2006.
Regulatory Flexibility Act
The Deputy Administrator hereby certifies that this rulemaking has
been drafted in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)). The Regulatory Flexibility Act (RFA) applies to rules
that are subject to notice and comment. Because this rule is simply
codifying statutory provisions, DEA has determined, as explained above,
that public notice and comment are not necessary. Consequently, the RFA
does not apply. Where DEA has discretion in the way in which provisions
of CMEA are implemented, however, DEA is seeking public comment and has
sought, through the development of training materials and Web sites for
self-certification, to reduce the cost to small entities.
Although the RFA does not apply to this final rule, DEA has
reviewed the potential impacts. The rule will affect a substantial
number of small entities, but DEA does not believe that it will have a
significant economic impact on small entities. As shown in the next
section, OTC medications as a whole represent less than two percent of
sales except for drug stores and mail order houses. Even the highest
estimate of the value of scheduled listed chemical products represents
less than 10 percent of the OTC market. Consequently, the loss of
sales, if that occurs, will reduce sales at most by a fraction of one
percent, not a significant economic impact. DEA expects that regulated
sellers will decide whether their sale of the products is great enough
to justify the cost of compliance or whether they can retain sufficient
sales revenues by shifting to non-regulated substitutes. The smallest
stores, which DEA expects to be convenience stores, may limit their
sales of the products to individual transactions involving packages
containing not more than 60 milligrams of pseudoephedrine, which would
allow them to avoid the recordkeeping requirements. In this case, their
total cost of compliance could be about $50 for training and self-
certification. DEA is specifically seeking public comments regarding
the cost of this regulation to small entities, using a pre-statutory
baseline of comparison (i.e., the state of the market prior to the
Combat Methamphetamine Epidemic Act of 2005).
Although not directly the subject of this rule, manufacturers and
distributors will be affected by a reduction in sales of these
products. The manufacturers of scheduled listed chemical products are
also the manufacturers of the substitutes being marketed and the
distributors handle both product lines; DEA has not been able to
identify any manufacturer of these products that does not also market
substitute products. DEA expects that the primary impact will be
limited to reduction in sales that occurs because diversion is curbed.
If the sales restrictions and quotas reduce the United States' demand
for these chemical products, the world production of the chemicals is
likely to drop, which will make less available to be diverted to
superlabs operated by drug cartels. DEA seeks comments on impacts on
manufacturers and distributors.
Executive Order 12866
The Deputy Administrator further certifies that this rulemaking has
been drafted in accordance with the principles in Executive Order 12866
Sec. 1(b). It has been determined that this is ``a significant
regulatory action.'' Therefore, this action has been reviewed by the
Office of Management and Budget. As discussed above, this action is
codifying statutory provisions and involves no agency discretion.
However, DEA has reviewed the potential benefits and costs following
OMB Circular A-4.
The CMEA requirements impose the following costs on regulated
sellers:
Training of employees who sell scheduled listed chemical
product sales (0.5 hours).
Time to file the self-certification (0.5 hours).
Costs for logbooks ($47.55) or creating an electronic
record system.
Additional time per sale to verify purchaser IDs and enter
information into the logbook (1 to 2 minutes).
Storage space behind the counter or in locked cabinets
($200-$600).
DEA is seeking comments regarding all of the above assumptions and
estimates.
The requirements may also affect the sales at regulated sellers. If
a seller decides to avoid the requirements by eliminating the product
line or selling only the available substitutes, some customers may seek
the products from sellers that continue to carry them. Regulated
sellers, manufacturers, and distributors will also see some reduction
[[Page 56018]]
in sales as a result of diversion from regulated sellers becoming more
difficult.
Although DEA has estimated the unit cost of training,
certification, logbooks, logbook entries, and storage space, DEA cannot
estimate the total cost of the rule because the following critical
items are unknown:
The value of the existing market in these products and the
number of transactions that this market represents.
The number of stores that currently sell these products.
The number and type of stores that will continue to sell
the products, the number that will elect to sell only the substitutes,
and the number that will limit sales of the products to individual
transactions involving not more than one 60-milligram or two 30-
milligram pseudoephedrine dosage units, which would not require
recordkeeping, the most expensive part of compliance.
The number of customers who will seek out these products
rather than purchase substitutes available on open shelves.
The number of stores that will elect to use bound logbooks
versus using electronic systems.
The number of existing electronic signature capture
systems that are capable of accepting or linking to name and address
records.
The percentage of existing sales (and theft of the
product) that is being diverted to illicit use.
DEA is seeking comments and data from the industry that would help
address these items and provide an estimate of the impact. DEA
recognizes that the answers to some of these issues will evolve over
time as regulated sellers and manufacturers adjust to consumer choices.
For example, regulated sellers may see little impact beyond the initial
costs of training and self-certification if most consumers elect to
purchase the substitute products that are already available under the
same brand names as scheduled listed chemical products, either because
the consumers are unaware of the product change, because the
substitutes meet the consumers' needs, or because they are unwilling to
spend extra time to buy scheduled listed chemical products.
Regulated Sellers. The 2002 Economic Census data on product line
sales indicate that about 92,000 retailers sell OTC medications. These
include pharmacies, grocery stores, discount stores, warehouse clubs
and superstores, convenience stores, variety stores, and mail order
stores. In addition, up to 40,000 gas stations with convenience stores
may sell OTC drug products. The number of retailers in each sector, the
number with pharmacies, the number that sell nonprescription OTC drugs,
and the percentage of their sales represented by OTC drugs are shown in
Table 4 below. DEA solicits comments on the number of these entities
that sell these products.
Table 4.--Sectors Selling Scheduled Listed Chemical Products
----------------------------------------------------------------------------------------------------------------
OTC as
Total Number w Percent percent of
NAICS number pharmacy Number w OTC without total sales
pharmacy *
----------------------------------------------------------------------------------------------------------------
44511 Grocery stores...................... 66,150 19,721 26,029 70.2 1.30
44611 Pharmacy and drug stores............ 40,234 39,121 36,493 2.8 5.70
452112 Discount department stores......... 5,650 4,887 2,079 13.5 1.80
45291 Warehouse clubs and superstores..... 2,912 2,553 2,758 12.3 1.20
---------------------------------------------------------------------
Subtotal.............................. 114,946 66,282 67,359 ........... ...........
=====================================================================
44512 Convenience stores.................. 29,212 370 12,399 98.7 1.60
44711 Gas stations with convenience stores 93,691 0 ** 40,068 100 ** 1.10
45299 All other general merchandise stores 28,456 577 11,840 98 1.20
***......................................
4541 Electronic shopping and mail order 15,910 453 250 97.2 13
houses...................................
---------------------------------------------------------------------
Total................................. 167,269 1,400 24,489-64,557 ........... ...........
----------------------------------------------------------------------------------------------------------------
* For those firms that handle the product line.
** Drugs, health aids, beauty aids including cosmetics.
*** Includes variety stores.
Even if all gas stations with convenience stores sold OTC drugs,
there would be fewer of these establishments than exist in the main
sectors selling OTC drugs. Most gas stations and convenience stores do
not have pharmacies; OTC products represent a very small percentage of
sales for them.
DEA cannot determine what percentage of those selling OTC drugs
sell scheduled listed chemical products, although it is likely that
outlets that have pharmacies sell these products. Because 16 States
representing 27 percent of the U.S. population already limit sales of
these products to pharmacies, DEA estimates that the number of
potentially regulated entities is between 89,000 and 118,000.\1\ This
estimate does not specifically include mobile retail vendors, but DEA
does not believe that they constitute a large segment of retail
sellers. The actual number could be lower; many of the stores,
particularly convenience stores, do not carry a full range of OTC drug
products, and some may not sell this category of drugs. DEA seeks
comment on this issue. Conversely, large mail order distributors may
handle large quantities of scheduled listed chemical products. DEA also
seeks comment on the number, size, and sales of mail order entities.
---------------------------------------------------------------------------
\1\ The 27 percent is a conservation estimate; the 16 states
represents 28 percent of the convenience stores in the country and
35 percent of the gas stations with convenience stores.
---------------------------------------------------------------------------
Substitutes. As discussed above, many States have imposed sales
restrictions on scheduled listed chemical products prior to CMEA. In
reaction to those restrictions and to concern about diversion of their
products, manufacturers have reformulated many product lines to
alternative decongestants that cannot be used to make methamphetamine.
These substitutes are being sold under the same product names and in
boxes that look the same as those used for scheduled listed chemical
products. One major manufacturer expected to have converted half of its
decongestant product line to substitutes by January 2006. Two of the
largest drug store
[[Page 56019]]
chains do not list scheduled listed chemical products on their online
stores, but offer more than 60 cold medications containing other
ingredients.
At present, there is little information on how consumers will react
to sales restrictions. On April 7, 2004, Oklahoma made pseudoephedrine
products Schedule V controlled substances, but exempted gel caps and
liquids. According to IRI InfoScan, in the 52 weeks after
implementation, sales of all pseudoephedrine products fell 16.2 percent
and sales of the substitutes rose by 24 percent. Sales of exempted gel
caps rose 109.3 percent and liquids 14.5 percent, but tablets fell 35.5
percent. Overall, sales in the cold and allergy group in Oklahoma fell
3.9 percent. Illinois, which imposed less stringent rules, saw little
change in purchases, according to IRI InfoScan. The Slone Epidemiology
Center at Boston University took a broader look at drug purchases in
2004 and found that between 2003 and 2004, the number of adults
reporting use of pseudoephedrine fell from 7 percent to 4.8 percent.
This decline occurred prior to State restrictions and to the
availability of many substitute products, but after limits on purchases
were set by Federal law and by many large chain stores.
If national patterns reflect Oklahoma's experience, a 3.9 percent
drop in cold/allergy medicine sales would imply a $117,000,000 loss in
sales. However, if they reflect national trends reported by the Slone
Epidemiology Center, a 2.2 percent drop in cold/allergy medicine sales
would imply a $33,000,000 loss in sales. Since market effects will
occur within the context of increased marketing and distribution of
substitutes, the direct effects on revenues could be lower than either
estimate.
It is not clear how consumers and retailers will react to a
nationwide limit on all scheduled listed chemical product sales because
the availability of substitute products may increase. If consumers
continue to ask for scheduled listed chemical products, retailers will
incur costs to store them behind the counter or in locked cabinets and
to record every transaction. The purchaser will take extra time and
possibly delay other customers who have to wait while the transaction
is completed. DEA notes that in stores with pharmacies, the
recordkeeping requirements established by this rule may direct a higher
proportion of transactions to the pharmacy versus the standard checkout
line. DEA is seeking public comment on the effect of these
recordkeeping and product placement requirements on pharmacy wait times
and any staffing costs these requirements generate. Alternatively, if
few consumers seek the products, many retailers may decide not to carry
them. This decision would eliminate their costs, but could impose a
cost on the consumer who has to go to multiple stores or travel greater
distances to find the product. Regulated sellers who continue to sell
the products will have to decide how to log the sales, which will
impose costs. DEA is seeking comment on the cost of logging sales,
whether this log be paper or electronic. Part of each seller's
calculation will be whether the value of the sales is sufficient to
offset the costs. As discussed above, OTC medications as a whole
represent between one and two percent of the sales of sellers except
for pharmacies and mail order sellers; scheduled listed chemical
products probably represent less than 10 percent of those sales. For
many smaller stores a small decline in sales, if that occurs, may be
less costly than compliance. DEA has estimated that small convenience
stores sell between $20 and $40 a month of these products for
legitimate purposes (69 FR 8691, February 25, 2004).
Size of the market; data issues. DEA has been unable to determine
the size of the market for scheduled listed chemical products. The Food
and Drug Administration reported that IMS Health data estimated the
market is about $500 million; FDA further reported that IRI estimated
the market was $1.5 billion. The IRI Oklahoma data implied that
pseudoephedrine represented about 75 percent of the cold medication
market, but the value other sources provide for the cold medication
market in 2005 is about $4 billion.
IRI indicated that national sales for the category had dropped by
0.5 percent between May 2004 and May 2005. A Kline & Company study
indicated that sales in the cold medication category rose 12 percent in
2005. Part of the problem is that different groups appear to define the
market segment differently, including a different mix of products. DEA
seeks information on the actual value of the market for scheduled
listed chemical products and the number of transactions. Even with the
total value of the market, DEA would need to understand the value of
the average transactions. The products are available in a wide variety
of strengths and number of dosage units; the sales limits allow
purchases of multiple packages of most products. DEA also seeks
comments on the effect of the restrictions on product prices. At
present, the substitutes are selling for prices that are equivalent to
those for scheduled listed chemical products (based on maximum daily
dosage units). The additional costs of handling scheduled listed
chemical products could, however, increase their prices if sellers pass
on the costs to consumers.
Diversion. The limits and restrictions that CMEA imposes are
intended to reduce the diversion of scheduled listed chemical products.
Manufacturers and regulated sellers will see some reduction in sales as
a result of retail purchases for diversion declining. DEA has no
reliable information on the percentage of the market in these products
that was diverted. DEA expects that as it implements other CMEA
requirements it will have a better understanding of the size of the
diversion market. Nonetheless, because sales of these products
represent less than one percent of most retailer's total sales, the
loss of sales for diversion is unlikely to impose a substantial cost on
retailers selling to legitimate purchasers.
Implementation Costs. For most regulated sellers that continue to
carry scheduled listed chemical products, the largest cost will be the
added time to collect and record logbook information regarding the
purchaser at each transaction. DEA estimates that it will take one to
two minutes for the seller and purchaser to enter into the logbook the
information required by CMEA--name and address of purchaser, name and
quantity of product sold, date and time of transaction, and purchaser's
signature--and seeks comment on this estimate.
Assuming market changes may reflect the Oklahoma experience to a
degree, a 16 percent drop in sales of regulated products would change
the number of transactions that would require recordkeeping to
56,490,000. Assuming the recordkeeping requirements add 2 minutes to
each transaction, they would impose an annual cost between $73,000,000
and $80,000,000 in terms of time burden. These estimates assume, for
the low end, the average hourly wage of retail sales clerks ($11.86
with fringe benefits) plus public time ($27/hour); for the high end, it
assumes the average hourly wage of a pharmacy technician ($15.26 with
fringe benefits) plus public time ($27/hour).
Assuming market changes reflect data reported by The Slone
Epidemiology Center, a 2.2 percent drop in sales of regulated products
would change the number of transactions that would require
recordkeeping by 2,193,000. Using the same assumptions regarding
increased transaction times, this would imply an annual cost in terms
of time
[[Page 56020]]
burden between $85,000,000 and $93,000,000.
Another cost will be the costs of recordkeeping systems. CMEA
allows either a logbook or an electronic record. DEA is seeking
comments on whether regulated sellers will be able to use electronic
signature capture systems to collect names and addresses as well as
signatures, the cost of adapting systems to perform this function, and
likelihood that sellers will do this versus using a bound logbook. DEA
is seeking information from regulated sellers on whether they plan to
limit sales to pharmacy or special counters or whether they will handle
sales at regular checkout lines. Finally, DEA is seeking comments on
how much behind-the-counter space regulated sellers will need to devote
to these products, the cost of doing so, and the extent to which costs
may be passed on to the consumer.
Blister Packs. For reasons of product safety and the previous
blister-pack exemption, almost all scheduled listed chemical products
are already sold in blister packs. DEA seeks comments on whether this
requirement imposes a burden on any manufacturers.
Benefits. Congress passed CMEA to make it more difficult for
individuals to purchase scheduled listed chemical products and use them
to make methamphetamine. The retail restrictions are part of a series
of steps that Congress adopted to address the sources of
methamphetamine abuse; other steps include import and production quotas
and tracking of international transactions.
Methamphetamine remains the primary drug produced in illicit
laboratories within the United States. Data from the El Paso
Intelligence Center's (EPIC) Clandestine Laboratory Database indicates
that more than 17,170 methamphetamine laboratory incidents in calendar
year 2004 and 12,139 incidents in calendar year 2005 (as reported to
EPIC through June 29, 2006). According to EPIC, from January 2000
through June 2006, there were 7,125 laboratories reportedly using
ephedrine and 44,380 reportedly using pseudoephedrine as precursor
material for methamphetamine production. Additionally EPIC reports the
seizure of 51 amphetamine laboratories (using phenylpropanolamine)
during the same period. The vast majority of these laboratories used
pharmaceutical products containing pseudoephedrine, ephedrine, and
phenylpropanolamine as the source of precursor material.
According to the Substance Abuse and Mental Health Services
Administration (SAMHSA), Drug Abuse Warning Network (DAWN), in 2004,
the latest year for which data are available, amphetamine and
methamphetamine was mentioned in almost 103,000 emergency department
(ED) visits; methamphetamine accounted for 73,400 of these visits.
These numbers represent a rapid increase in recent years. SAMHSA
reported that drug abuse-related ED visits involving amphetamine/
methamphetamine rose from 25,200 in 1995 to 38,960 in 2002 and 42,500
in 2003. If the cost of the visit is $500, which is probably low in
many areas, the total cost would have been $50 million. The DAWN
mortality data for 33 metropolitan areas in 2003, the most recent year
available, report amphetamine or methamphetamine was involved in 524
deaths and was the only drug present in 93 of those deaths. A
University of Arkansas Study on the economic impact of methamphetamine
use in Benton County, Arkansas, estimated that the average
methamphetamine user cost his or her employer $47,500 a year, with 50
percent of cost due to increased absenteeism and 32 percent due to lost
productivity.
The surge in methamphetamine abuse and the manufacture of the drug
in clandestine laboratories has caused serious law enforcement and
environmental problems, particularly in rural communities. Rural areas
are frequently the site of clandestine laboratories because the
manufacturing process produces distinctive odors and can be identified
if there are close neighbors. Besides causing crime as people steal
ingredients to make methamphetamine and steal to support their
addiction, the clandestine laboratories often leave serious pollution
behind. A laboratory can produce 6 to 10 pounds of hazardous waste for
every pound of methamphetamine produced. Table 5 shows the hazardous
waste cleanup costs incurred by States and DEA by Fiscal Year (October
1 through September 30) for several previous fiscal years.
Table 5.--State and Federal Clandestine Laboratory Cleanup Costs
----------------------------------------------------------------------------------------------------------------
State/local
Fiscal year DEA cost meth cost Total cost
----------------------------------------------------------------------------------------------------------------
1998............................................................ $4,030,000 $1,420,000 $5,450,000
1999............................................................ 3,020,000 8,420,000 11,440,000
2000............................................................ 4,120,000 11,800,000 15,920,000
2001............................................................ 2,800,000 19,240,000 22,040,000
2002............................................................ 2,190,000 21,490,000 23,680,000
2003............................................................ 1,150,000 15,040,000 16,190,000
2004............................................................ 810,000 17,680,000 18,490,000
2005............................................................ 650,000 17,020,000 17,670,000
2006*........................................................... 470,000 12,180,000 12,650,000
----------------------------------------------------------------------------------------------------------------
* Data for fiscal year 2006 is through the third quarter (June 30, 2006).
The Federal and State cleanups are generally limited to removing
chemicals that could be reused; they do not address water and soil
pollution that remain. Owners of the property are responsible for
completing the cleanup of contaminated water and soil, but if the owner
cannot pay the cost, local governments bear the burden or the
contamination remains.
The effectiveness of the control of retail sales can be seen in the
decline in clandestine laboratory incidents in States such as Oklahoma.
In 2003, before Oklahoma implemented retail sales controls, there were
1,068 clandestine laboratory incidents in the State. In 2005, the first
full year of the sales controls, there were only 217 incidents. The
CMEA provisions on retail sales will continue the trend of reducing the
number of clandestine laboratories. This trend will reduce the cost to
State and local governments as well as the hazard to law enforcement
officers and others from exposure to the hazardous chemicals left
behind.
Conclusion. Because of the many unknowns, DEA is unable to
determine with any certainty whether the CMEA
[[Page 56021]]
requirements will impose an annual cost on the economy of $100 million
or more, the standard for an economically significant rule under
Executive Order 12866. If the value of the existing market is on the
low end of the range ($500 million), the additional costs, including
transaction costs, would be considerably lower than $100 million even
if there is no reduction in sales. If the value of the market is $1.5
billion and there is no reduction in sales, the cost could exceed $100
million. DEA considers it likely that product switching and reduced
sales will result in annual costs below $100 million, but until the
statutory requirements are implemented and both retailers and consumers
respond, DEA cannot estimate total costs with any certainty.
Public Comment
To assist DEA in finalizing its Regulatory Impact Analysis, DEA is
seeking public comment on the following questions:
What is the size of the market for products regulated
under this rule? What proportion of the cold and allergy product market
are pseudoephedrine-based products?
Using a pre-CMEA baseline, will this regulation have any
effect on the prices of regulated products? If so, what is the
magnitude of the change?
How many retailers may choose not to carry the regulated
products rather than incur the regulatory costs? What is their annual
sales volume with regard to regulated products? What is the cost
associated with that effect?
If stores choose not to carry the regulated products, what
are consumers' travel costs associated with the decreased quantity of
stores selling the product?
Placing products behind the counter may increase
competition for space behind the counter. Will it increase the cost of
storage space behind the counter? What is the cost imposed on the
consumption of other goods? What, if any, effect will this have on the
prices of other goods?
Among stores that opt to direct regulated transactions to
their pharmacies, will this additional traffic have an effect on
pharmacy wait times? Will the increase in pharmacy transactions require
additional staffing?
What equipment is required for retailers who wish to
handle regulated sales at the regular checkout line? What is its cost?
What are wait times for regulated transactions when two or
more consumers arrive to purchase regulated products?
What is the cost to manufacturers, given expected demand
reductions for regulated products?
To what extent, and under what circumstances, can
substitutes for the regulated products reduce the expected cost of this
regulation?
What are the results of any recent studies on the
effective doses of substitute products and their safety at different
levels?
To what extent are training and recordkeeping costs fixed
versus variable?
Paperwork Reduction Act of 1995
CMEA mandates a number of new information collections and
recordkeeping requirements. Regulated sellers are required to train any
employee who will be involved in selling scheduled listed chemical
products and to document the training. Regulated sellers must also
self-certify to DEA that all affected employees have been trained and
that the seller is in compliance with all CMEA provisions. Finally,
CMEA mandates that each sale at retail be documented in a written or
electronic logbook and that the logbooks be retained for two years.
The Department of Justice, Drug Enforcement Administration, has
submitted the following information collection request to the Office of
Management and Budget for review and clearance in accordance with
review procedures of the Paperwork Reduction Act of 1995. The
information collection is published to obtain comments from the public
and affected agencies.
All comments and suggestions, or questions regarding additional
information, to include obtaining a copy of the information collection
instrument with instructions, should be directed to Mark W. Caverly,
Chief, Liaison and Policy Section, Office of Diversion Control, Drug
Enforcement Administration, Washington, DC 20537.
Written comments and suggestions from the public and affected
agencies concerning the collection of information are encouraged. Your
comments on the information collection-related aspects of this rule
should address one or more of the following four points:
(1) Evaluate whether the collection of information is necessary for
the proper performance of the functions of the agency, including
whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the collection of information, including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
Overview of This Information Collection
(1) Type of Information Collection: New collection.
(2) Title of the Form/Collection: Self-certification, Training and
Logbooks for Regulated Sellers of Scheduled Listed Chemical Products.
(3) Agency form number, if any, and the applicable component of the
Department of Justice sponsoring the collection: Form Number: DEA Form
597, Office of Diversion Control, Drug Enforcement Administration, U.S.
Department of Justice.
(4) Affected public who will be asked or required to respond, as
well as a brief abstract:
Primary: Business or other for-profit.
Other: None.
Abstract: CMEA mandates that retail sellers of scheduled listed
chemical products maintain a written or electronic logbook of sales,
retain a record of employee training, and complete a self-certification
form verifying the training and compliance with CMEA provisions
regarding retail sales of scheduled listed chemical products.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: 89,000, 25.9
hours.
As discussed in the previous section, DEA estimates that the number
of potential regulated sellers could range from 89,000 to 118,000. That
number would include a substantial number of convenience stores, most
of which may not find the burden of self-certification, storage,
recordkeeping, and training worth the sales of items that represent a
very small percentage of their overall sales. Thus, DEA expects that
the number of regulated sellers that will seek to self-certify will be
no higher than 89,000. Consequently, DEA has used the lower estimate
for the information collection. The average annual burden hour per
respondent is 25.9 hours, most of which is the additional time needed
to record the statutorily mandated information on each sales
transaction.
(6) An estimate of the total public burden (in hours) associated
with the
[[Page 56022]]
collection: 4,548,500 hours. The estimate includes both the burden
hours for regulated sellers and the time customers would take to
provide information during the transaction.
Regulated sellers will need to maintain a record of employee
training, self-certify, and maintain a logbook of transactions. DEA
estimates that each regulated seller will spend 0.5 hours collecting
the information and completing the online self-certification form.
Completing a roster of employees trained is estimated to take 3 minutes
per employee, assuming that the recordkeeping takes one tenth of the
time spent on training. Finally, DEA estimates that having the customer
enter information and sign the log while the sales person checks the
photo ID will take two minutes per transaction. DEA assumes
recordkeeping requirements will not lengthen checkout lines, and will
not influence the transaction times of other customers. Further, this
estimate does not account for scenarios in which two or more customers
arrive to purchase scheduled listed chemical products. DEA assumes that
all pharmacists and pharmacy technicians will be trained (about
300,000) plus 100,000 other sales clerks. DEA used an estimate of 133
million transactions to develop total burden hours for transactions,
assuming that the total value of the market is the midpoint of the
estimates ($1 billion) and that the average value of a transaction is
$8. (Product prices range from $4 to $14 per package depending on the
number of dosage units and strength.) The number of transactions was
reduced to 67.25 million to account for the states that already have
requirements for logbooks; this rule imposes no additional burden for
the transactions on either purchasers or sellers in those states. Based
on Bureau of Census state population numbers for 2005, these states
represent 49 percent of the United States population. Table 6 presents
the burden hour calculations.
Table 6.--Estimate of Total Burden Hours
----------------------------------------------------------------------------------------------------------------
Number of Total burden
Activity Unit burden hour activities hours
----------------------------------------------------------------------------------------------------------------
Training record............................... 0.05 hour (3 minutes)........... 400,000 20,000
Self-certification............................ 0.5 hour (30 minutes)........... 89,000 44,500
Transaction record............................ 0.033 hour (2 minutes).......... 67,250,000 2,242,000
Customer time................................. 0.033 hour (2 minutes).......... 67,250,000 2,242,000
-----------------------------------------------------------------
Total..................................... ................................ .............. 4,548,500
----------------------------------------------------------------------------------------------------------------
If additional information is required contact: Lynn Bryant,
Department Clearance Officer, Information Management and Security
Staff, Justice Management Division, Department of Justice, Patrick
Henry Building, Suite 1600, 601 D Street NW., Washington, DC 20530.
Executive Order 12988
This regulation meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice
Reform.
Executive Order 13132
This rulemaking does not impose enforcement responsibilities on any
State; nor does it diminish the power of any State to enforce its own
laws. The rule does preempt State laws that are less stringent than the
statutory requirements. These requirements, however, are mandated under
CMEA and DEA has no authority to alter them or change the preemption.
Accordingly, this rulemaking does not have federalism implications
warranting the application of Executive Order 13132.
Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of
$118,000,000 or more 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 rule is a major rule as defined by section 804 of the Small
Business Regulatory Enforcement Fairness Act of 1996 (Congressional
Review Act). This rule may result in an annual effect on the economy of
$100,000,000 or more; it will not cause 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. Depending heavily on the assumptions used,
the economic impact of this rule could be substantially higher or lower
than $100,000,000.
CMEA requires that on and after September 30, 2006, regulated
sellers selling scheduled listed chemical products at retail shall
self-certify with DEA in order to continue to sell these products. CMEA
imposes sales limits, purchase limits, product placement requirements,
mail order customer identification requirements, and other
requirements, some of which must be specified by regulation, all with
an effective date of September 30, 2006. Based on the effective date of
this law, it is impracticable for DEA to comply with the requirements
of CRA section 801 pertaining to delayed effective dates of major rules
due to the limited time involved. Were DEA not to publish this Interim
Rule with Request for Comment, regulated sellers selling scheduled
listed chemical products at retail would not be able to self-certify by
the date specified in the law. Were this not to occur, these regulated
sellers would be forced to stop selling scheduled listed chemical
products, or violate the law by doing so. Mail order distributors would
also have difficulty, as DEA is required by regulation to establish
procedures for these persons to identify their customers prior to
shipping product. Without these regulations, mail order distributors
would not be able to sell scheduled listed chemical products.
Therefore, DEA also finds that it is contrary to the public interest
not to issue these regulations as an Interim Rule, thereby allowing
regulated sellers and mail order distributors to fully comply with the
requirements of CMEA. While the CMEA was signed into law in March of
2006, most of the law must be in effect by September 30, 2006. The
broad scope of the new law, as well as the expedited effective dates,
is a clear reflection of Congress's concern about the nation's growing
methamphetamine epidemic and its desire to act quickly to prevent
further illicit use of these chemicals. In light of these factors, DEA
finds that ``good cause'' exists to make this Interim Rule with Request
for Comment
[[Page 56023]]
effective September 21, 2006, except that Sec. Sec. 1314.20, 1314.25,
and 1314.30 (with the exception of Sec. 1314.30(a)(2)) are effective
September 30, 2006. Section 1314.30(a)(2) is effective November 27,
2006.
List of Subjects
21 CFR Part 1300
Chemicals, Drug traffic control.
21 CFR Part 1309
Administrative practice and procedure, Drug traffic control,
Exports, Imports, Security measures.
21 CFR Part 1310
Drug traffic control, Exports, Imports, Reporting and recordkeeping
requirements.
21 CFR Part 1314
Drug traffic control, Reporting and recordkeeping requirements.
0
For the reasons set out above, 21 CFR Chapter II is amended as follows:
PART 1300--DEFINITIONS
0
1. The authority citation for part 1300 continues to read as follows:
Authority: 21 U.S.C. 802, 871(b), 951, 958(f).
0
2. Section 1300.02 is amended by revising paragraphs (b)(28) and (29),
removing paragraph (b)(31), redesignating paragraphs (b)(32) through
(b)(34) as (b)(31) through (b)(33), and adding new paragraphs (b)(34)
through (b)(37) to read as follows:
Sec. 1300.02 Definitions related to listed chemicals.
* * * * *
(b) * * *
(28) The term regulated transaction means:
(i) A distribution, receipt, sale, importation, or exportation of a
listed chemical, or an international transaction involving shipment of
a listed chemical, or if the Administrator establishes a threshold
amount for a specific listed chemical, a threshold amount as determined
by the Administrator, which includes a cumulative threshold amount for
multiple transactions, of a listed chemical, except that such term does
not include:
(A) A domestic lawful distribution in the usual course of business
between agents or employees of a single regulated person; in this
context, agents or employees means individuals under the direct
management and control of the regulated person;
(B) A delivery of a listed chemical to or by a common or contract
carrier for carriage in the lawful and usual course of the business of
the common or contract carrier, or to or by a warehouseman for storage
in the lawful and usual course of the business of the warehouseman,
except that if the carriage or storage is in connection with the
distribution, importation, or exportation of a listed chemical to a
third person, this paragraph does not relieve a distributor, importer,
or exporter from compliance with parts 1309, 1310, and 1313 of this
chapter;
(C) Any category of transaction or any category of transaction for
a specific listed chemical or chemicals specified by regulation of the
Administrator as excluded from this definition as unnecessary for
enforcement of the Act;
(D) Any transaction in a listed chemical that is contained in a
drug other than a scheduled listed chemical product that may be
marketed or distributed lawfully in the United States under the Federal
Food, Drug, and Cosmetic Act, subject to paragraph (b)(28)(i)(E) of
this section, unless--
(1) The Administrator has determined pursuant to the criteria in
Sec. 1310.10 of this chapter that the drug or group of drugs is being
diverted to obtain the listed chemical for use in the illicit
production of a controlled substance; and
(2) The quantity of the listed chemical contained in the drug
included in the transaction or multiple transactions equals or exceeds
the threshold established for that chemical;
(E) Any transaction in a scheduled listed chemical product that is
a sale at retail by a regulated seller or a distributor required to
submit reports under Sec. 1310.03(c) of this chapter; or
(F) Any transaction in a chemical mixture designated in Sec. Sec.
1310.12 and 1310.13 of this chapter that the Administrator has exempted
from regulation.
(ii) A distribution, importation, or exportation of a tableting
machine or encapsulating machine except that such term does not include
a domestic lawful distribution in the usual course of business between
agents and employees of a single regulated person; in this context,
agents or employees means individuals under the direct management and
control of the regulated person.
(29) The term retail distributor means a grocery store, general
merchandise store, drug store, or other entity or person whose
activities as a distributor relating to drug products containing
pseudoephedrine or phenylpropanolamine are limited almost exclusively
to sales for personal use, both in number of sales and volume of sales,
either directly to walk-in customers or in face-to-face transactions by
direct sales. Also for the purposes of this paragraph, a grocery store
is an entity within Standard Industrial Classification (SIC) code 5411,
a general merchandise store is an entity within SIC codes 5300 through
5399 and 5499, and a drug store is an entity within SIC code 5912.
* * * * *
(34)(i) The term scheduled listed chemical product means a product
that contains ephedrine, pseudoephedrine, or phenylpropanolamine and
may be marketed or distributed lawfully in the United States under the
Federal, Food, Drug, and Cosmetic Act as a nonprescription drug.
Ephedrine, pseudoephedrine, and phenylpropanolamine include their
salts, optical isomers, and salts of optical isomers.
(ii) Scheduled listed chemical product does not include any product
that is a controlled substance under part 1308 of this chapter. In the
absence of such scheduling by the Attorney General, a chemical
specified in paragraph (b)(34)(i) of this section may not be considered
to be a controlled substance.
(35) The term regulated seller means a retail distributor
(including a pharmacy or a mobile retail vendor), except that the term
does not include an employee or agent of the distributor.
(36) The term mobile retail vendor means a person or entity that
makes sales at retail from a stand that is intended to be temporary or
is capable of being moved from one location to another, whether the
stand is located within or on the premises of a fixed facility (such as
a kiosk at a shopping center or an airport) or whether the stand is
located on unimproved real estate (such as a lot or field leased for
retail purposes).
(37) The term at retail, with respect to the sale or purchase of a
scheduled listed chemical product, means a sale or purchase for
personal use, respectively.
PART 1309--REGISTRATION OF MANUFACTURERS, DISTRIBUTORS, IMPORTERS,
AND EXPORTERS OF LIST I CHEMICALS
0
3. The authority citation for part 1309 continues to read as follows:
Authority: 21 U.S.C. 802, 821, 822, 823, 824, 830, 871(b), 875,
877, 958.
0
4. Section 1309.71(a) is revised to read as follows:
Sec. 1309.71 General security requirements.
(a) All applicants and registrants must provide effective controls
and
[[Page 56024]]
procedures to guard against theft and diversion of List I chemicals.
Chemicals must be stored in containers sealed in such a manner as to
indicate any attempts at tampering with the container. Where chemicals
cannot be stored in sealed containers, access to the chemicals should
be controlled through physical means or through human or electronic
monitoring.
* * * * *
PART 1310--RECORDS AND REPORTS OF LISTED CHEMICALS AND CERTAIN
MACHINES
0
5. The authority citation for part 1310 continues to read as follows:
Authority: 21 U.S.C. 802, 827(h), 830, 871(b), 890.
0
6. In Sec. 1310.04, paragraph (f)(1)(ii) is revised to read as
follows:
Sec. 1310.04 Maintenance of records.
* * * * *
(f) * * *
(1) * * *
(ii) For List I chemicals that are scheduled listed chemical
products as defined in Sec. 1300.02, the thresholds established in
paragraphs (f)(1)(i) and (g) of this section apply only to non-retail
distribution, import, and export. Sales of these products at retail are
subject to the requirements of part 1314 of this chapter.
* * * * *
0
7. Section 1310.05 is amended by revising paragraph (f)(2) to read as
follows:
Sec. 1310.05 Reports.
* * * * *
(f) * * *
(2) Distributions of drug products by retail distributors that may
not include face-to-face transactions to the extent that such
distributions are consistent with the activities authorized for a
retail distributor as specified in Sec. 1300.02(b)(29) of this
chapter, except that this paragraph does not apply to sales of
scheduled listed chemical products at retail.
* * * * *
0
8. Remove Sec. 1310.14.
0
9. Remove Sec. 1310.15.
0
10. Add Sec. 1310.16 to read as follows:
Sec. 1310.16 Exemptions for certain scheduled listed chemical
products.
(a) Upon the application of a manufacturer of a scheduled listed
chemical product, the Administrator may by regulation provide that the
product is exempt from part 1314 of this chapter if the Administrator
determines that the product cannot be used in the illicit manufacture
of a controlled substance.
(b) An application for an exemption under this section must contain
all of the following information:
(1) The name and address of the applicant.
(2) The exact trade name of the scheduled listed chemical product
for which exemption is sought.
(3) The complete quantitative and qualitative composition of the
drug product.
(4) A brief statement of the facts that the applicant believes
justify the granting of an exemption under this section.
(5) Certification by the applicant that the product may be lawfully
marketed or distributed under the Federal, Food, Drug, and Cosmetic
Act.
(6) The identification of any information on the application that
is considered by the applicant to be a trade secret or confidential and
entitled to protection under U.S. laws restricting the public
disclosure of such information by government employees.
(c) The Administrator may require the applicant to submit
additional documents or written statements of fact relevant to the
application that he deems necessary for determining if the application
should be granted.
(d) Within a reasonable period of time after the receipt of a
completed application for an exemption under this section, the
Administrator shall notify the applicant of acceptance or non-
acceptance of the application. If the application is not accepted, an
explanation will be provided. The Administrator is not required to
accept an application if any of the information required in paragraph
(b) of this section or requested under paragraph (c) of this section is
lacking or not readily understood. The applicant may, however, amend
the application to meet the requirements of paragraphs (b) and (c) of
this section.
(e) If the application is accepted for filing, the Administrator
shall issue and publish in the Federal Register an order on the
application, which shall include a reference to the legal authority
under which the order is based. This order shall specify the date on
which it shall take effect.
(f) The Administrator shall permit any interested person to file
written comments on or objections to the order. If any comments or
objections raise significant issues regarding any findings of fact or
conclusions of law upon which the order is based, the Administrator
shall immediately suspend the effectiveness of the order until he may
reconsider the application in light of the comments and objections
filed. Thereafter, the Administrator shall reinstate, revoke, or amend
the original order as deemed appropriate.
0
11. Part 1314 is added to 21 CFR Chapter II to read as follows:
PART 1314--RETAIL SALE OF SCHEDULED LISTED CHEMICAL PRODUCTS
Subpart A--General
1314.01 Scope.
1314.02 Applicability.
1314.03 Definitions.
1314.05 Requirements regarding packaging of nonliquid forms.
1314.10 Effect on state laws.
1314.15 Loss reporting.
Subpart B--Sales by Regulated Sellers
1314.20 Restrictions on sales quantity.
1314.25 Requirements for retail transactions.
1314.30 Recordkeeping for retail transactions.
1314.35 Training of sales personnel.
1314.40 Self-certification.
1314.45 Privacy protections.
1314.50 Employment measures.
Subpart C--Mail-Order Sales
1314.100 Sales limits for mail-order sales.
1314.105 Verification of identity for mail-order sales.
1314.110 Reports for mail-order sales.
1314.115 Distributions not subject to reporting requirements.
Subpart D--Order To Show Cause
1314.150 Order to show cause.
1314.155 Suspension pending final order.
Authority: 21 U.S.C. 802, 830, 842, 871(b), 875, 877.
Subpart A--General
Sec. 1314.01 Scope.
This part specifies the requirements for retail sales of scheduled
listed chemical products to individuals for personal use.
Sec. 1314.02 Applicability.
(a) This part applies to the following regulated persons who sell
scheduled listed chemical products for personal use:
(1) Regulated sellers of scheduled listed chemical products sold at
retail for personal use through face-to-face sales at stores or mobile
retail vendors.
(2) Regulated persons who engage in a transaction with a non-
regulated person and who ship the products to the non-regulated person
by the U.S. Postal Service or by private or common carriers.
(b) The requirements in subpart A apply to all regulated persons
subject to this part. The requirements in subpart B apply to regulated
sellers as defined in
[[Page 56025]]
Sec. 1300.02 of this chapter. The requirements in subpart C apply to
regulated persons who ship the products to the customer by the U.S.
Postal Service or by private or common carriers.
Sec. 1314.03 Definitions.
As used in this part, the term ``mail-order sale'' means a retail
sale of scheduled listed chemical products for personal use where a
regulated person uses or attempts to use the U.S. Postal Service or any
private or commercial carrier to deliver the product to the customer.
Mail-order sale includes purchase orders submitted by phone, mail, fax,
Internet, or any method other than face-to-face transaction.
Sec. 1314.05 Requirements regarding packaging of nonliquid forms.
A regulated seller or mail order distributor may not sell a
scheduled listed chemical product in nonliquid form (including gel
caps) unless the product is packaged either in blister packs, with each
blister containing no more than two dosage units or, if blister packs
are technically infeasible, in unit dose packets or pouches.
Sec. 1314.10 Effect on State laws.
Nothing in this part preempts State law on the same subject matter
unless there is a positive conflict between this part and a State law
so that the two cannot consistently stand together.
Sec. 1314.15 Loss reporting.
(a) Each regulated person must report to the Special Agent in
Charge of the DEA Divisional Office for the area in which the regulated
person making the report is located, any unusual or excessive loss or
disappearance of a scheduled listed chemical product under the control
of the regulated person. The regulated person responsible for reporting
a loss in-transit is the supplier.
(b) Each report submitted under paragraph (a) of this section must,
whenever possible, be made orally to the DEA Divisional Office for the
area in which the regulated person making the report is located at the
earliest practicable opportunity after the regulated person becomes
aware of the circumstances involved.
(c) Written reports of losses must be filed within 15 days after
the regulated person becomes aware of the circumstances of the event.
(d) A report submitted under this section must include a
description of the circumstances of the loss (in-transit, theft from
premises, etc.).
(e) A suggested format for the report is provided below:
Regulated Person
[fxsp0]Registration number (if applicable)-----------------------------
[fxsp0]Name------------------------------------------------------------
[fxsp0]Business address------------------------------------------------
[fxsp0]City------------------------------------------------------------
[fxsp0]State-----------------------------------------------------------
[fxsp0]Zip-------------------------------------------------------------
[fxsp0]Business phone--------------------------------------------------
[fxsp0]Date of loss----------------------------------------------------
[fxsp0]Type of loss----------------------------------------------------
[fxsp0]Description of circumstances------------------------------------
Subpart B--Sales by Regulated Sellers
Sec. 1314.20 Restrictions on sales quantity.
(a) Without regard to the number of transactions, a regulated
seller (including a mobile retail vendor) may not in a single calendar
day sell any purchaser more than 3.6 grams of ephedrine base, 3.6 grams
of pseudoephedrine base, or 3.6 grams of phenylpropanolamine base in
scheduled listed chemical products.
(b) A mobile retail vendor may not in any 30-day period sell an
individual purchaser more than 7.5 grams of ephedrine base, 7.5 grams
of pseudoephedrine base, or 7.5 grams of phenylpropanolamine base in
scheduled listed chemical products.
Sec. 1314.25 Requirements for retail transactions.
(a) Each regulated seller must ensure that sales of a scheduled
listed chemical product at retail are made in accordance with this
section and Sec. 1314.20.
(b) The regulated seller must place the product so that customers
do not have direct access to the product before the sale is made (in
this paragraph referred to as ``behind-the-counter'' placement). For
purposes of this paragraph, a behind-the-counter placement of a product
includes circumstances in which the product is stored in a locked
cabinet that is located in an area of the facility where customers do
have direct access. Mobile retail vendors must place the product in a
locked cabinet.
(c) The regulated seller must deliver the product directly into the
custody of the purchaser.
Sec. 1314.30 Recordkeeping for retail transactions.
(a)(1) Except for purchase by an individual of a single sales
package containing not more than 60 milligrams of pseudoephedrine, the
regulated seller must maintain, in accordance with criteria issued by
the Administrator, a written or electronic list of each scheduled
listed chemical product sale that identifies the products by name, the
quantity sold, the names and addresses of the purchasers, and the dates
and times of the sales (referred to as the ``logbook''). The logbook
may be maintained on paper or in electronic form.
(2) Effective November 27, 2006, if a logbook is maintained on
paper, it must be created and maintained in a bound record book.
(b) The regulated seller must not sell a scheduled listed chemical
product at retail unless the purchaser does the following:
(1) Presents an identification card that provides a photograph and
is issued by a State or the Federal Government, or a document that,
with respect to identification, is considered acceptable for purposes
of 8 CFR 274a.2(b)(1)(v)(A) and 274a.2(b)(1)(v)(B).
(2) Signs the logbook and enters in the logbook his or her name,
address, and the date and time of the sale.
(c) For records created electronically, the regulated seller may
use an electronic signature system to capture the signature and may
have the computer automatically enter the date and time of the sale.
The regulated seller may ask the purchaser for their name and address
and enter information if it is not feasible for the purchaser to enter
the information electronically.
(d) The regulated seller must determine that the name entered in
the logbook corresponds to the name provided on identification
presented and that the date and time entered are correct.
(e) The regulated seller must enter in the logbook the name of the
product and the quantity sold. Examples of methods of recording the
quantity sold include the weight of the product per package and number
of packages of each chemical, the cumulative weight of the product for
each chemical, or quantity of product by Universal Product Code. These
examples do not exclude other methods of displaying the quantity sold.
For electronic records, the regulated seller may use a point-of-sale
and bar code reader. Such electronic records must be provided pursuant
to paragraph (i) of this section in a human readable form such that the
requirements of paragraph (a)(1) of this section are satisfied.
(f) The regulated seller must include in the logbook or display by
the logbook, the following notice:
Warning: Section 1001 of Title 18, United States Code, states
that whoever, with respect to the logbook, knowingly and willfully
falsifies, conceals, or covers up by any trick, scheme, or device a
material fact, or makes any materially false, fictitious, or
fraudulent statement or representation, or makes or uses any false
writing or document knowing the same to contain any materially
false, fictitious, or fraudulent statement or entry, shall be fined
not more than $250,000 if an
[[Page 56026]]
individual or $500,000 if an organization, imprisoned not more than
five years, or both.
(g) The regulated seller must maintain each entry in the logbook
for not fewer than 2 years after the date on which the entry is made.
(h) A record under this section must be kept at the regulated
seller's place of business where the transaction occurred, except that
records may be kept at a single, central location of the regulated
seller if the regulated seller has notified the Administration of the
intention to do so. Written notification must be submitted by
registered or certified mail, return receipt requested, to the Special
Agent in Charge of the DEA Divisional Office for the area in which the
records are required to be kept.
(i) The records required to be kept under this section must be
readily retrievable and available for inspection and copying by
authorized employees of the Administration under the provisions of 21
U.S.C. 880.
(j) A record developed and maintained to comply with a State law
may be used to meet the requirements of this section if the record
includes the information specified in this section.
Sec. 1314.35 Training of sales personnel.
Each regulated seller must ensure that its sales of a scheduled
listed chemical product at retail are made in accordance with the
following:
(a) In the case of individuals who are responsible for delivering
the products into the custody of purchasers or who deal directly with
purchasers by obtaining payments for the products, the regulated seller
has submitted to the Administration a self-certification that all such
individuals have, in accordance with criteria issued by the
Administration, undergone training provided by the regulated seller to
ensure that the individuals understand the requirements that apply
under this part.
(b) The regulated seller maintains a copy of each self-
certification and all records demonstrating that individuals referred
to in paragraph (a) of this section have undergone the training.
Sec. 1314.40 Self-certification.
(a) A regulated seller must submit to the Administration the self-
certification referred to in Sec. 1314.35(a) in order to sell any
scheduled listed chemical product. The certification is not effective
for purposes of this section unless, in addition to provisions
regarding the training of individuals referred to in Sec. 1314.35(a),
the certification includes a statement that the regulated seller
understands each of the requirements that apply under this part and
agrees to comply with the requirements.
(b) When a regulated seller files the initial self-certification,
the Administration will assign the regulated seller to one of twelve
groups. The expiration date of the self-certification for all regulated
sellers in any group will be the last day of the month designated for
that group. In assigning a regulated seller to a group, the
Administration may select a group with an expiration date that is not
less than 12 months or more than 23 months from the date of the self-
certification. After the initial certification period, the regulated
seller must update the self-certifications annually.
(c) The regulated seller must provide a separate certification for
each place of business at which the regulated seller sells scheduled
listed chemical products at retail.
Sec. 1314.45 Privacy protections.
To protect the privacy of individuals who purchase scheduled listed
chemical products, the disclosure of information in logbooks under
Sec. 1314.15 is restricted as follows:
(a) The information shall be disclosed as appropriate to the
Administration and to State and local law enforcement agencies.
(b) The information in the logbooks shall not be accessed, used, or
shared for any purpose other than to ensure compliance with this title
or to facilitate a product recall to protect public health and safety.
(c) A regulated seller who in good faith releases information in a
logbook to Federal, State, or local law enforcement authorities is
immune from civil liability for the release unless the release
constitutes gross negligence or intentional, wanton, or willful
misconduct.
Sec. 1314.50 Employment measures.
A regulated seller may take reasonable measures to guard against
employing individuals who may present a risk with respect to the theft
and diversion of scheduled listed chemical products, which may include,
notwithstanding State law, asking applicants for employment whether
they have been convicted of any crime involving or related to such
products or controlled substances.
Subpart C--Mail-Order Sales
Sec. 1314.100 Sales limits for mail-order sales.
(a) Each regulated person who makes a sale at retail of a scheduled
listed chemical product and is required under Sec. 1310.03(c) of this
chapter to submit a report of the sales transaction to the
Administration may not in a single calendar day sell to any purchaser
more than 3.6 grams of ephedrine base, 3.6 grams of pseudoephedrine
base, or 3.6 grams of phenylpropanolamine base in scheduled listed
chemical products.
(b) Each regulated person who makes a sale at retail of a scheduled
listed chemical product and is required under Sec. 1310.03(c) of this
chapter to submit a report of the sales transaction to the
Administration may not in any 30-day period sell to an individual
purchaser more than 7.5 grams of ephedrine base, 7.5 grams of
pseudoephedrine base, or 7.5 grams of phenylpropanolamine base in
scheduled listed chemical products.
Sec. 1314.105 Verification of identity for mail-order sales.
(a) Each regulated person who makes a sale at retail of a scheduled
listed chemical product and is required under Sec. 1310.03(c) of this
chapter to submit a report of the sales transaction to the
Administration must, prior to shipping the product, receive from the
purchaser a copy of an identification card that provides a photograph
and is issued by a State or the Federal Government, or a document that,
with respect to identification, is considered acceptable for purposes
of 8 CFR 274a.2(b)(1)(v)(A) and 274a.2(b)(1)(v)(B). Prior to shipping
the product, the regulated person must determine that the name and
address on the identification correspond to the name and address
provided by the purchaser as part of the sales transaction. If the
regulated person cannot verify the identities of both the purchaser and
the recipient, the person may not ship the scheduled listed chemical
product.
(b) If the product is being shipped to a third party, the regulated
person must comply with the requirements of paragraph (a) to verify
that both the purchaser and the person to whom the product is being
shipped live at the addresses provided. If the regulated person cannot
verify the identities of both the purchaser and the recipient, the
person may not ship the scheduled listed chemical product.
Sec. 1314.110 Reports for mail-order sales.
(a) Each regulated person required to report under Sec. 1310.03(c)
of this chapter must either:
(1) Submit a written report, containing the information set forth
in paragraph (b) of this section, on or before the 15th day of each
month following the month in which the distributions took place. The
report must be submitted under company
[[Page 56027]]
letterhead, signed by the person authorized to sign on behalf of the
regulated seller, to the Drug and Chemical Evaluation Section, Office
of Diversion Control, Drug Enforcement Administration, Washington, DC
20537; or
(2) Upon request to and approval by the Administration, submit the
report in electronic form, either via computer disk or direct
electronic data transmission, in such form as the Administration shall
direct. Requests to submit reports in electronic form should be
submitted to the Drug and Chemical Evaluation Section, Office of
Diversion Control, Drug Enforcement Administration, Washington, DC
20537, ATTN: Electronic Reporting.
(b) Each monthly report must provide the following information for
each distribution:
(1) Supplier name and registration number;
(2) Purchaser's name and address;
(3) Name/address shipped to (if different from purchaser's name/
address);
(4) Method used to verify the identity of the purchaser and, where
applicable, person to whom product is shipped;
(5) Name of the chemical contained in the scheduled listed chemical
product and total quantity shipped (e.g. pseudoephedrine, 3 grams);
(6) Date of shipment;
(7) Product name;
(8) Dosage form (e.g., tablet, liquid);
(9) Dosage strength (e.g., 30mg, 60mg, per dose etc.);
(10) Number of dosage units (e.g., 100 doses per package);
(11) Package type (blister pack, etc.);
(12) Number of packages;
(13) Lot number.
Sec. 1314.115 Distributions not subject to reporting requirements.
(a) The following distributions to nonregulated persons are not
subject to the reporting requirements in Sec. 1314.110:
(1) Distributions of sample packages when those packages contain
not more than two solid dosage units or the equivalent of two dosage
units in liquid form, not to exceed 10 milliliters of liquid per
package, and not more than one package is distributed to an individual
or residential address in any 30-day period.
(2) Distributions by retail distributors that may not include face-
to-face transactions to the extent that such distributions are
consistent with the activities authorized for a retail distributor as
specified in Sec. 1300.02(b)(29) of this chapter, except that this
paragraph (a)(2) does not apply to sales of scheduled listed chemical
products at retail.
(3) Distributions to a resident of a long term care facility or
distributions to a long term care facility for dispensing to or for use
by a resident of that facility.
(4) Distributions in accordance with a valid prescription.
(b) The Administrator may revoke any or all of the exemptions
listed in paragraph (a) of this section for an individual regulated
person if the Administrator finds that drug products distributed by the
regulated person are being used in violation of the regulations in this
chapter or the Controlled Substances Act.
Subpart D--Order to Show Cause
Sec. 1314.150 Order To show cause.
(a) If, upon information gathered by the Administration regarding
any regulated seller or a distributor required to submit reports under
Sec. 1310.03(c) of this chapter, the Administrator determines that a
regulated seller or distributor required to submit reports under Sec.
1310.03(c) of this chapter has sold a scheduled listed chemical product
in violation of Section 402 of the Act (21 U.S.C. 842(a)(12) or (13)),
the Administrator will serve upon the regulated seller or distributor
an order to show cause why the regulated seller or distributor should
not be prohibited from selling scheduled listed chemical products.
(b) The order to show cause shall call upon the regulated seller or
distributor to appear before the Administrator at a time and place
stated in the order, which shall not be less than 30 days after the
date of receipt of the order. The order to show cause shall also
contain a statement of the legal basis for such hearing and for the
prohibition and a summary of the matters of fact and law asserted.
(c) Upon receipt of an order to show cause, the regulated seller or
distributor must, if he desires a hearing, file a request for a hearing
as specified in subpart D of part 1316 of this chapter. If a hearing is
requested, the Administrator shall hold a hearing at the time and place
stated in the order, as provided in part 1316 of this chapter.
(d) When authorized by the Administrator, any agent of the
Administration may serve the order to show cause.
Sec. 1314.155 Suspension pending final order.
(a) The Administrator may suspend the right to sell scheduled
listed chemical products simultaneously with, or at any time subsequent
to, the service upon the seller or distributor required to file reports
under Sec. 1310.03(c) of this chapter of an order to show cause why
the regulated seller or distributor should not be prohibited from
selling scheduled listed chemical products, in any case where he finds
that there is an imminent danger to the public health or safety. If the
Administrator so suspends, he shall serve with the order to show cause
under Sec. 1314.150 an order of immediate suspension that shall
contain a statement of his findings regarding the danger to public
health or safety.
(b) Upon service of the order of immediate suspension, the
regulated seller or distributor shall, as instructed by the
Administrator:
(1) Deliver to the nearest office of the Administration or to
authorized agents of the Administration all of the scheduled listed
chemical products in his or her possession; or
(2) Place all of the scheduled listed chemical products under seal
as described in Section 304 of the Act (21 U.S.C. 824(f)).
(c) Any suspension shall continue in effect until the conclusion of
all proceedings upon the prohibition, including any judicial review,
unless sooner withdrawn by the Administrator or dissolved by a court of
competent jurisdiction. Any regulated seller or distributor whose right
to sell scheduled listed chemical products is suspended under this
section may request a hearing on the suspension at a time earlier than
specified in the order to show cause under Sec. 1314.150, which
request shall be granted by the Administrator, who shall fix a date for
such hearing as early as reasonably possible.
Dated: September 20, 2006.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 06-8194 Filed 9-21-06; 10:25 am]
BILLING CODE 4410-09-P