Protection of Stratospheric Ozone: Allocation of Essential Use Allowances for Calendar Year 2000: Allocations for Metered-Dose Inhalers and the Space Shuttle and Titan Rockets

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[FRL-6519-3]

RIN 2060-AI73

Protection of Stratospheric Ozone: Allocation of Essential Use

Allowances for Calendar Year 2000: Allocations for Metered-Dose

Inhalers and the Space Shuttle and Titan Rockets

AGENCY: Environmental Protection Agency (EPA).

ACTION: Interim final rule.

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SUMMARY: With this action, EPA is allocating essential-use allowances

for calendar year 2000 for ozone depleting substances (ODS) for use in

medical devices and for use in the Space Shuttle Rockets and Titan

Rockets for the year 2000 control period. Production and import of ODS

for laboratory and analytical applications will be addressed in a

separate rulemaking. The United States nominated specific uses of

controlled ozone-depleting substances as essential for calendar year

2000 under the Montreal Protocol on Substances that Deplete the Ozone

Layer (Protocol). The Parties to the Protocol subsequently authorized

specific quantities of ODS for calendar year 2000 for the uses

nominated by the United States. EPA allocates essential use allowances

to an applicant for exempted production or import of a specific

quantity of controlled substances solely for the designated essential

purpose. These essential use allowances permit a person to obtain

controlled ODS as an exemption to the January 1, 1996, regulatory

phaseout of production and import.

DATES: This action is effective January 6, 2000. EPA will consider all

written comments received by February 7, 2000 to determine if any

change to this action is necessary.

ADDRESSES: Those wishing to notify EPA of their intent to submit

adverse comments on this action should contact Erin Birgfeld, U.S.

Environmental Protection Agency, Stratospheric Protection Division,

Office of Air and Radiation (6205J), Ariel Rios Building, 1200

Pennsylvania Avenue, NW., Washington, DC, 20460; [email protected]

>; (202) 564-9079 phone and (202) 565-2096 fax. Materials relevant to

this rulemaking are contained in Docket No. A-92-13. The Docket phone

is (202) 260-7548 and is located in room M-1500, First Floor, Waterside

Mall 401 M Street, SW., Washington, DC 20460. The materials may be

inspected from 8 a.m. until 4 p.m. Monday through Friday. A reasonable

fee may be charged by EPA for copying docket materials.

FOR FURTHER INFORMATION CONTACT: The Stratospheric Ozone Protection

Hotline at (800) 296-1996 or Erin Birgfeld, U.S. Environmental

Protection Agency, Stratospheric Protection Division, Office of Air and

Radiation (6205J), Ariel Rios Building, 1200 Pennsylvania Avenue, NW.,

Washington, DC, 20460; [email protected] >; (202) 564-9079 phone

and (202) 565-2096 fax.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. Allocation Process for the Calendar Year 2000

III. Allocation of Essential Use Allowances for Calendar Year 2000

IV. Response to Comments

V. Administrative Requirements

VI. Judiciary Review

VII. Congressional Review

I. Background

Overview of the Notice of Proposed Rulemaking

The Notice of Proposed Rulemaking (NPRM) for allocating essential

use allowances was published on November 2, 1999 (64 FR 59141). In the

NPRM, EPA proposed allocating chlorofluorocarbon (CFCs) for use in

metered dose inhalers (MDIs), and methyl chloroform for use in the

Space Shuttle and Titan Rocket. EPA explained that because of

additional requirements in the Clean Air Act that apply beginning in

calendar year 2000, before allocating CFCs for use in MDIs, EPA must

receive a determination from the Food and Drug Administration (FDA)

indicating the amount of CFCs that are necessary for use in MDIs. The

quantities of CFCs proposed to be allocated were the quantities that

were agreed upon at the Eighth Meeting of the Parties to the Montreal

Protocol. FDA's determination of the amount of CFCs that are necessary

for use in MDIs, which EPA has subsequently received, is substantially

lower than what was proposed in the NPRM. The allocations

[[Page 717]]

in this action reflect these lowered amounts. Because stakeholders have

not had a chance to comment on the lower amounts, today's action is

being issued as an interim final rule effective January 6, 2000. This

will allow essential use applicants access to necessary CFCs for

continued production of MDIs, and at the same time will allow for

further comment on and potential changes to the allocation.

In the NPRM, EPA also explained that due to requirements of the CAA

that apply beginning in calendar year 2000, the essential use exemption

for import and production of small amounts of high purity ozone

depleting substances (ODS) for laboratory and analytical uses may not

be available after January 1, 2000. Today's action does not address

this issue. EPA will issue a separate final rule on the topic of

laboratory essential uses.

Overview of the Essential Use Process

The Montreal Protocol on Substances that Deplete the Ozone Layer

(Protocol) sets specific deadlines for the phaseout of production and

importation of ozone depleting substances (ODS). At their Fourth

Meeting in 1992, the Parties to the Protocol (the Parties) amended the

Protocol to allow exemptions to the phaseout for uses agreed by the

Parties to be essential. At the same Meeting, the Parties also adopted

Decision IV/25, which established criteria for determining whether a

specific use should be approved as essential, and the process for

making such a determination.

The criteria for an essential use as set forth in Decision IV/25

are the following:

``(1) that a use of a controlled substance should qualify as

`essential' only if:

(i) it is necessary for the health, safety or is critical for the

functioning of society (encompassing cultural and intellectual

aspects); and

(ii) there are no available technically and economically feasible

alternatives or substitutes that are acceptable from the standpoint of

environment and health;

(2) that production and consumption, if any, of a controlled

substance for essential uses should be permitted only if:

(i) all economically feasible steps have been taken to minimize the

essential use and any associated emission of the controlled substance;

and

(ii) the controlled substance is not available in sufficient

quantity and quality from existing stocks of banked or recycled

controlled substances, also bearing in mind the developing countries'

need for controlled substances.''

The procedure set out by Decision IV/25 first calls for individual

Parties to nominate essential uses. The Protocol's Technology and

Economic Assessment Panel (TEAP or the Panel) evaluates the nominated

essential uses and makes recommendations to the Protocol Parties. The

Parties make the final decisions on essential use nominations at their

annual meeting.

Persons requesting essential use exemptions submit applications

which respond to the specific questions in the 1997 Handbook on

Essential Use Nominations. This document may be obtained from the

Stratospheric Protection Division, U.S. Environmental Protection Agency

or the Ozone Secretariat of the Montreal Protocol in Nairobi. The

Handbook can also be downloaded from the TEAP website at: http://

www.teap.org/html/teap__reports.html.

What does EPA do with the information in the essential use

applications?

The U.S. EPA carefully reviews all the information in each

essential use application and enters the information into a tracking

system which permits year by year comparison of quantities of ODS

requested, quantities allocated, quantities of ODS received in previous

years, and quantities of ODS used for the specific essential activity.

The review of data enables EPA to assess whether entities are

stockpiling ODS, whether there seem to be inflated requests relative to

actual use, and whether there is possible double-counting between

companies. For example, in 1998 we identified some double-counting in

the requests for CFCs among companies. Our analysis also revealed that

there were disparities between the total quantity of CFCs requested for

MDIs and the actual quantity used to manufacture MDIs in previous

years. To account for this inflation in the request for allocation, EPA

reduced the total U.S. nomination for 1998 by 10 percent before

forwarding the applications for consideration by the TEAP and the

Parties to the Protocol.

Every year since 1994, EPA has reviewed applications for essential

uses according to the above criteria and then forwarded the

applications to the Parties. The Parties then review the

recommendations by the TEAP and make final decisions on essential use

nominations.

What are the essential uses that EPA has nominated in the past?

Decision IV/25 was implemented initially in the context of halons

which were phased out of production at the end of 1993. At that time,

nominations for halons were separated from those for other ozone-

depleting substances. EPA issued a Federal Register notice requesting

nominations for essential uses of halons (February 2, 1993; 58 FR

06786). In response, the Agency received over ten nominations, but was

able to work with applicants to resolve their near-term requirements.

As a result, the U.S. did not nominate any uses for continued halon

production in 1994. About a dozen other nations put forth nominations

which were reviewed by the Panel, which determined that in each case

alternatives existed or that the existing supply of banked halons was

adequate to meet near-term needs. The Panel, therefore, did not

recommend approval for any of the nominations. In November of 1993, at

the Fifth Meeting, the Parties unanimously adopted the Panel's

recommendation not to approve any essential uses for production and

consumption of halons in 1994.

EPA issued a second notice requesting applications for essential

use applications for halons for the 1995 control period on October 18,

1993 (58 FR 53722). In response to this inquiry, EPA received no

applications. The TEAP received only one nomination (from France) for

essential use exemptions for halons for production and consumption of

halons for an essential use in 1995. The TEAP did not recommend

approval of this nomination.

In 1993, EPA issued a Federal Register notice requesting essential

use applications for CFCs, methyl chloroform, carbon tetrachloride, and

hydrobromofluorocarbons required beyond the 1996 phaseout of

consumption and production of these class I substances (May 20, 1993,

58 FR 29410). EPA received 20 applications in response to this notice.

For several of these applications, EPA determined that the criteria

contained in Decision IV/25 had not been satisfied. For example, EPA

rejected two applications seeking CFCs for use in servicing air-

conditioning equipment on the basis that adequate supplies of banked

and recycled CFCs were available. However, in rejecting these

nominations, the United States noted that servicing existing air-

conditioning and refrigeration equipment remains a major challenge to

the successful transition from ODSs and that a future nomination in

this area might be necessary if a

[[Page 718]]

combination of retrofits, replacements, recycling, recovery at

disposal, and banking do not adequately address these needs.

In 1993, the United States forwarded essential use nominations to

the Protocol Secretariat for the following uses of CFCs: metered dose

inhalers and other selected medical applications; rocket motor assembly

for the Space Shuttle; aerosol wasp killers; limited use in a specified

bonding agent and polymer application; and a generic application for

laboratory uses under specified limitations. (Letter from Pomerance to

the United Nations Environment Programme (UNEP), September 27, 1993).

The TEAP reviewed over 200 specific uses which were submitted to

the Montreal Protocol Secretariat by the Parties to the Protocol. In

March 1994, the Panel issued the ``1994 Report of the Technology and

Economic Assessment Panel,'' which included the Panel's recommendations

for essential-use production and consumption exemptions. The Panel

recommended that essential use exemptions be granted for nominations

of: methyl chloroform in solvent bonding for the Space Shuttle; CFCs

used in metered dose inhalers; and specific controlled substances

needed for laboratory and analytical applications. For each of the

other nominations submitted, the TEAP determined that one or more of

the criteria for evaluating an essential use had not been satisfied.

The Parties approved essential use exemptions for the uses recommended

in the 1994 TEAP report. The U.S. has continued to request and receive

exemptions for those same uses in subsequent years.

II. Allocation Process for the Calendar Year 2000

The domestic allocation process for this year differs from past

allocations due to changes in the requirements under the Clean Air Act

(CAA or the Act). The purpose of this section is to explain the legal

background behind these changes, and to outline the procedures that EPA

and the Food and Drug Administration (FDA) used to fulfill our

obligations under the CAA in allocating ozone depleting substances for

calendar year 2000.

Prior to the year 2000, EPA allocated essential use exemptions

under the original phase-out schedule contained in section 604 of the

Act. This schedule does not require the complete phaseout of any ODS

prior to calendar year 2000. Under section 606 of the Act, EPA was

obligated to create an accelerated phaseout through regulation to match

the accelerated phaseout under the Protocol. However, EPA had the

flexibility to create exemptions to the regulatory phaseout, where such

exemptions had been approved under the Montreal Protocol. Thus, for the

past several years, EPA has been able to authorize production and

import of ozone-depleting substances for essential uses allowed under

the Protocol, without regard to whether the Act contains exceptions for

those uses, as long as the total authorized production does not exceed

the amount permitted by the Act. However, January 1, 2000, is the

phaseout date under Section 604 of the Act for all class I substances

with the exception of methyl chloroform and methyl bromide. The

phaseout dates for methyl chloroform and methyl bromide are January 1,

2002 and January 1, 2005, respectively. After the phaseout date for a

particular substance has passed, EPA will no longer be able to

authorize production of that substance on the basis of the slower

phaseout schedule under the Act. Because CFCs are to be phased-out by

calendar year 2000 under the original phase-out schedule, EPA must now

implement essential use exemptions for these chemicals as specified

under the Act in section 604(d).

The phaseout date for methyl chloroform under the Act is January 1,

2002. Until that date, the Act permits production and import of methyl

chloroform equivalent to 20% of baseline. The amount of methyl

chloroform allocated for calendar year 2000 is well below this limit.

Beginning in the year 2002, EPA will implement the exception for

essential uses of methyl chloroform found in 604(d)(1) of the Act.

For calendar year 2000, the entities in Table I submitted

applications requesting class I controlled substances for essential

uses. The applications provided information in accordance with the

criteria set forth in Decision IV/25 of the Protocol and the procedures

outlined in the ``1997 Handbook on Essential Use Nominations.'' The

applications requested exemptions for the production and import of

specific quantities of certain class I controlled substances after the

phaseout. The EPA reviewed the applications and nominated these uses to

the Protocol Secretariat for analysis by the TEAP and its Technical

Option Committees (TOCs). The Parties to the Montreal Protocol approved

the U.S. nominations for essential-use exemptions during the Tenth

Meeting in 1998 (Decision IX/18). Today's action allocates essential-

use allowances to U.S. entities as authorized by the Parties to the

Montreal Protocol and to the extent consistent with the CAA.

The Act provides for the following essential use exemptions to the

ban on production and import. Section 604 (d)(2) states that

notwithstanding the phaseout, EPA shall, to the extent consistent with

the Montreal Protocol, authorize production of limited quantities of

class I substances for use in medical devices, if FDA, in consultation

with EPA, determines that such production is necessary. Section

604(d)(3) states that EPA may, to the extent consistent with the

Montreal Protocol, authorize production of limited quantities of halon-

1211, halon-1301, and halon-2402 solely for the purpose of aviation

safety, if the Federal Aviation Administration, in consultation with

EPA, determines that no safe and effective substitute has been

developed and that such authorization is necessary for aviation safety

purposes. Section 604(d)(1) provides that during the period from

January 1, 2002 to January 1, 2005, EPA may, to the extent consistent

with the Montreal Protocol, authorize the production of limited

quantities of methyl chloroform solely for use in essential

applications for which no safe and effective substitute is available.

Section 604(d)(4) states that EPA cannot use any of these three

exemptions to authorize any person to produce a class I substance in

annual quantities greater than 10 percent of that person's baseline

year as defined in Section 601(2). Section 604(g)(3) of the Act

provides that EPA may, to the extent consistent with the Montreal

Protocol, authorize the production of limited quantities of halon-1211,

halon-1301, and halon-2402 after December 31, 1999, and before December

31, 2004 for use in fire suppression and explosion prevention in

association with domestic production of crude oil and natural gas

energy supplies on the North Slope of Alaska, if it is determined that

no safe and effective substitute has been developed and that such

authorization is necessary for fire suppression or explosion prevention

purposes. EPA cannot use this exemption to authorize any person to

produce any of these halons in an amount greater than 3 percent of that

person's baseline. Finally, section 604(f) states that the President

may, to the extent consistent with the Montreal Protocol, provide an

exemption for production of CFC -114, halon-1211, halon-1301, and

halon-2402 as necessary to protect U.S. national security interests, if

the President finds that adequate substitutes are not

[[Page 719]]

available and that the production and use of the substance are

necessary to protect national security interests.

Today's action allocating CFCs for use in MDIs requires EPA to

implement the exception for medical devices found in section 604(d)(2)

of the Clean Air Act. ``Medical device'' is defined in section 601(8)

of the Clean Air Act as follows:

[A]ny device (as defined in the Federal Food, Drug, and Cosmetic Act

(21 U.S.C. 321), diagnostic product, drug (as defined in the Federal

Food, Drug, and Cosmetic Act), and drug delivery system--

(A) if such device, product, drug, or drug delivery system utilizes

a class I or class II substance for which no safe and effective

alternative has been developed, and where necessary, approved by the

Commissioner [of FDA]; and

(B) if such device, product, drug, or drug delivery system, has,

after notice and opportunity for public comment, been approved and

determined to be essential by the Commissioner [of FDA] in consultation

with the Administrator [of EPA].

The preamble to FDA's September 1, 1999, notice of proposed

rulemaking on essential use determinations (64 FR 47735) discusses

FDA's approach to determining whether ``safe and effective

alternative[s]'' have been developed. It states that ``A non-CFC

product simply having the same active moiety as a CFC product is only

one factor to be considered. Other factors, such as whether the non-CFC

product has the same route of administration, the same indication, and

can be used with approximately the same level of convenience, are

important considerations. Additionally, FDA must consider whether

patients who medically need the CFC product are adequately served by

the non-CFC product. FDA's approval of a non-CFC product is a

determination that the product is safe and effective, but it is not a

determination that the product is a safe and effective alternative to

any other product. That requires a separate and distinct analysis.''

FDA has not yet determined that any non-CFC product is a safe and

effective alternative to any CFC MDI. Accordingly, part (A) of the

definition of medical device has not affected today's allocation.

With respect to part (B) of the definition of medical device

(section 601(8)(B)), and in particular the use of the word

``essential'' in that part of the definition, EPA is relying on current

FDA regulations (21 CFR 2.125) which contain a list of uses of CFCs

that FDA in consultation with EPA has found to be essential. This list

includes, among others, metered-dose steroids, metered-dose adrenergic

bronchodilators, metered-dose cromolyn sodium, metered-dose ipratropium

bromide, and metered-dose nedocromil sodium, all drugs for oral

inhalation in humans. The companies for which EPA is granting essential

use allowances produce CFC MDIs that contain these active moieties.

Thus, the products for which EPA is granting essential use allowances

are ``determined to be essential'' by FDA.

Also with respect to part (B) of the definition of ``medical

device'', EPA and FDA considered how to interpret the language

regarding approval by FDA of the ``device, product, drug, or drug

delivery system.'' The complete phrase reads as follows: ``if such

device, product, drug, or drug delivery system, has, after notice and

opportunity for public comment, been approved and determined to be

essential by the Commissioner in consultation with the Administrator.''

The decision was made to interpret this phrase as referring to FDA's

approval of an essential use and not the approval of the specific

product in question through approval of the New Drug Application (NDA)

or Abbreviated New Drug Application (ANDA) for that product. This means

that any MDI whose active moiety appears on FDA's essential use list is

eligible to receive essential use allowances. This interpretation was

taken for the following reasons. The term ``approved'' must be

interpreted in light of the surrounding language. Section 601(8)(B)

requires notice and comment rulemaking and refers to action by FDA, in

consultation with EPA. Since approval of an NDA or ANDA under the FDCA

involves unilateral action by FDA without notice-and-comment

rulemaking, it is reasonable to conclude section 601(8)(B) does not

refer to approval of an NDA or ANDA under the FDCA. Therefore, FDA and

EPA are interpreting section 601(8)(B) to refer to FDA's approval of an

essential use. This interpretation is consistent with the surrounding

language, since FDA engages in notice-and comment rulemaking in listing

essential uses and since EPA has a strong interest in decisions about

essential uses. This means that an MDI is ``approved and determined to

be essential'' if the MDI contains an active moiety on FDA's essential

use list. All of the MDIs for which we are allocating CFCs today meet

this qualification.

Implementing the essential use exemption for MDIs under the Act

required EPA to consult with FDA regarding the quantity of CFCs to be

allocated. As stated earlier, section 604(d)(2) of the Act provides

that EPA shall authorize production and import of limited quantities of

class I substances for use in medical devices if FDA, in consultation

with EPA, determines such authorization to be necessary. Administrator

Carol Browner sent a letter to Dr. Jane Henney, Commissioner of FDA,

dated October 28, 1999, requesting that FDA make a determination on the

amount of CFCs that are ``necessary'' for the production of MDIs for

calendar year 2000. A December 23, 1999, letter was sent in response

from Commissioner Henney that contains FDA's determination.

EPA also collected additional information relevant to the

allocation. The 1997 TEAP Handbook on Essential Use Nomination

(Handbook), the guidance document for essential use exemption

applications, does not request information regarding specific products

for which the CFCs will be used. As a result, EPA sought more detailed

information including which drug products would be produced using the

allocated CFCs for calendar year 2000. EPA sent out letters to the

essential use applicants (separate letters were sent to the

International Pharmaceutical Aerosol Consortium (IPAC) member

companies) for medical devices, requesting this additional information

under section 114 of the Act. The responses to the letters included

confidential business information on the types of drug products to be

manufactured, as well as the quantity and the specific CFC chemical to

be used in the manufacture of each product. EPA shared the responses to

these letters with FDA to assist it in determining the amount of CFCs

for use in medical devices that are ``necessary.''

Dr. Henney's letter in response to the Administrator dated December

23, 1999, provided FDA's analysis of the amounts of CFCs that FDA

determined are necessary in calendar year 2000 for the production of

medical devices as defined under the Clean Air Act. FDA determined that

a total of 2737.3 metric tons are necessary for use in MDIs for

calendar year 2000. In contrast, the total amount of CFCs proposed to

be allocated in the NPRM (November 2, 1999 64 FR 59141) was 3735 metric

tons. The rationale underlying FDA's determination is provided in Dr.

Henney's December 23, 1999 letter:

``In listing the amounts we believe to be necessary for use in

medical devices, we referred to historical use and have included an

additional amount to allow for overage, for waste during manufacturing,

for uncertainties in the

[[Page 720]]

supply chain of CFCs since they are no longer produced in the United

States, for changes in future market shares of specific products, as

well as for unforeseen circumstances in the market. We also provided

additional amounts based on our knowledge of certain manufacturing

problems. In addition, we eliminated any double-counting we found and

eliminated allocations for uses not considered essential by the parties

to the Montreal Protocol, even if those uses are currently listed in

our regulation at 21 CFR 2.125(e).'' FDA also noted that they accounted

for CFCs for use in the production of MDIs that would ultimately be

exported to Canada.

FDA's determination that 2737.3 metric tons of CFCs are necessary

for use in MDIs is consistent with EPA's data on historical use and

import for MDIs. In order for companies to place an order for CFCs they

must provide a letter from EPA which indicates the amount of CFC that

they are allowed to purchase from chemical producers. Before issuing

these letters, EPA asks companies if they still need the entire

allocation of CFCs. In many cases, companies voluntarily give up part

of their CFC allocation for various reasons. The net result is that the

amount of CFCs actually purchased each year is substantially less than

the amount of CFCs allocated each year. For example, in 1998, 4,363

tons of CFCs were allocated for use in medical devices. However, only

2,235.6 tons were actually imported or produced for MDIs in that year,

and a total of 2,425.5 tons were actually used in the production of

MDIs. Similarly in 1997, 4,656.0 tons of CFCs were allocated for use in

MDIs while 2,032.3 tons were imported or produced, and 2,255.1 tons

were used in MDI production (data from the EPA CFC accounting

framework). Thus, the amount of CFCs that FDA has determined is

``necessary'' is about 300 metric tons higher than EPA's data on actual

use of CFCs in MDIs for 1998. As stated in the letter from FDA, this

additional amount will act as a safety factor accounting for any

unplanned interruptions in CFC supply that could occur during the

course of the year.

As mentioned above, section 604(d)(2) of the Act states that EPA's

allocation must be consistent with the Montreal Protocol. Article 2A(4)

of the Protocol states that Parties such as the United States may not

produce or import CFCs after January 1, 1996, except that the Parties

may decide collectively to permit a specified amount of production or

import for uses that they agree to be essential. The Parties to the

Protocol approved the U.S. nominations for essential use exemptions for

calendar year 2000 during their Tenth Meeting in 1998 (Decision IX/8).

The quantities we are allocating today do not exceed the amounts

approved by the Parties. Therefore, we believe that this action is

consistent with the Protocol.

Can I Submit Comments on This Interim Final Eule?

In the interest of maintaining as open and transparent a process as

possible, this year's allocation for medical devices and the space

program is being issued as an interim final rule instead of a final

rule. This will allow stakeholders to comment on the appropriateness

and accuracy of the allocation while still allowing pharmaceutical

companies access to CFCs in the near term for continued manufacture of

MDIs. Today's action allocates 2737.3 tons of CFCs for use in medical

devices instead of the 3735 metric tons proposed in the NPRM. EPA

received no comments on the NPRM stating that the proposed allocation

was insufficient for an applicant's needs. While we are accepting

comment on the lowered allocation figures, EPA, under the terms of the

Montreal Protocol cannot allocate CFCs in an amount higher than 3735

metric tons because no more than that amount has been approved for

essential use by the Parties to the Montreal Protocol. Because we are

issuing this action as an interim final rule, the following paragraphs

explain the relevant procedures under the CAA and the Administrative

Procedures Act (APA), as well as EPA's findings.

Section 307(d) of the CAA states that in the case of any rule to

which section 307(d) applies, notice of proposed rulemaking must be

published in the Federal Register (CAA 307(d)(3)). The promulgation or

revision of regulations under title VI of the CAA is generally subject

to section 307(d). However, section 307(d) does not apply to any rule

referred to in subparagraphs (A) or (B) of section 553(b) of the

Administrative Procedures Act (APA), 5 U.S.C. 551 et seq.

Section 553 of the Administrative Procedures Act, 5 U.S.C.

553(b)(B), provides that, when an agency for good cause finds that

notice and public procedure are impracticable, unnecessary or contrary

to the public interest, the agency may issue a rule without providing

notice and opportunity for public comment. In its proposed rule, 64 FR

59141 (Nov. 2, 1999), EPA provided notice that the allocation of

essential use allowances for MDIs for calendar year 2000 would be made

in accordance with CAA sections 601(8) and 604(d)(2). EPA also provided

preliminary interpretations of the relevant statutory language and

announced that the final allocation would be based on what FDA

determined was ``necessary'' under section 604(d)(2) of the CAA. The

proposed allocation reflected the quantities of CFCs that had been

approved by the Parties to the Montreal Protocol for this use. Because

the quantities that appear in today's allocation differ significantly

from the quantities that appeared in the proposal, EPA has decided to

provide an opportunity for post-promulgation comment on this

allocation.

EPA has determined that there is good cause for making today's

allocation final without prior notice of FDA's determination or an

opportunity to comment on the allocation, as adjusted to reflect FDA's

determination. The allocation of these essential-use allowances to the

specified MDI manufacturers will allow for the pharmaceutical industry

to continue to produce life-saving MDIs for the treatment of asthma and

chronic obstructive pulmonary disease. Thus, prior notice and an

opportunity to comment with regard to today's allocated quantities are

impracticable and contrary to the public interest. EPA finds that this

constitutes good cause under 5 U.S.C. 553(b)(B). Nonetheless, EPA is

providing 30 days for submission of public comments following today's

action. EPA will consider all written comments submitted in the

allotted time period to determine if any change to this action is

required.

Section 553(d) of the APA generally provides that rules may not

take effect earlier than 30 days after they are published in the

Federal Register. However, APA section 553(d) excepts from this

provision any action that grants or recognizes an exemption or relieves

a restriction. Since today's action grants an exemption to the phaseout

of production and consumption of CFCs, EPA is making this action

effective immediately to ensure the availability of CFCs for medical

devices during the 2000 control period.

III. Allocation of Essential Use Allowances for Calendar Year 2000

What Is EPA's Proposed Essential Use Allocation for Calendar Year 2000?

In today's action, EPA is allocating essential use allowances for

the year 2000 control period to entities listed in Table I for exempted

production or import of the specific quantity of class

[[Page 721]]

I controlled substances solely for the specified essential use. The

final allocation for CFCs for use in MDIs reflects FDA's determination

of the amounts of CFCs that are necessary as specified under section

604(d)(2) of the Act.

Table I.--Essential Use Allocation for Calendar Year 2000

------------------------------------------------------------------------

Quantity

Company Chemical (metric

tons)

------------------------------------------------------------------------

(i) Metered Dose Inhalers for Treatment of Asthma and Chronic

------------------------------------------------------------------------

International Pharmaceutical CFC-11................ 381.0

Aerosol Consortium (IPAC)--Medeva CFC-12................ 1169.0

Americas, Inc., Boehringer CFC-114............... 89.0

Ingelheim Pharmaceuticals, Glaxo

Wellcome, Rhone-Poulenc Rorer, 3M.

Medisol Laboratories, Inc.......... CFC-11................ 13.0

CFC-12................ 29.0

CFC-114............... 7.0

Schering Corporation............... CFC-11................ 301.0

CFC-12................ 747.0

CFC-114............... 0.0

Sciarra Laboratories, Inc.......... CFC-11................ 0.2

CFC-12................ 0.7

CFC-114............... 0.4

------------------------------------------------------------------------

(ii) Cleaning, Bonding and Surface Activation Applications for the Space

Shuttle Rockets and Titan Rockets

------------------------------------------------------------------------

National Aeronautics and Space Methyl Chloroform..... 56.7

Administration (NASA)/Thiokol

Rocket.

United States Air Force/Titan Methyl Chloroform..... 3.4

Rocket.

------------------------------------------------------------------------

The table above reflects FDA's determination of the quantities CFCs

that are necessary for calendar year 2000 and breaks down the amount of

CFC by molecule. However, in developing today's action, EPA has decided

to allocate essential-use allowances in aggregate amounts in accordance

with Decision X/6 of the Parties to the Montreal Protocol. Paragraph 2

of Decision X/6 states that the ``levels of production and consumption

necessary to satisfy essential uses of CFC-11, CFC-12, CFC-113, and

CFC-114, for metered-dose inhalers for asthma and chronic obstructive

pulmonary diseases * * * are authorized as specified in annex I to the

report of the Tenth Meeting of the Parties.'' Paragraph 5 of Decision

X/6 goes on to say that ``the quantities approved under paragraph 2

above and all future approvals are for total CFC volumes with

flexibility between CFCs within each group.'' EPA has determined that

allocating essential-use allowances for CFCs for the manufacture of

metered-dose inhalers in the aggregate instead of on a compound-by-

compound basis will add flexibility for protecting patient health by

allowing companies to better meet market demand for MDIs. Because CFC-

11, CFC-12 and CFC-114 all have an ozone depleting potential of 1.0,

allocating these substances in the aggregate will not cause any

additional damage to the stratospheric ozone layer.

The International Pharmaceutical Aerosol Consortium (IPAC)

consolidated the essential use exemption requests of its member

companies for administrative convenience. EPA will separately allocate

the essential-use allowances that FDA has determined to be

``necessary'' to each of IPAC's member companies by means of a

confidential letter.

Although the Montreal Protocol does allow for a global essential

use exemption for small quantities of high quality Class I ODS for use

in laboratory applications, the CAA does not contain an explicit

exemption for this use. Therefore, import and production of CFCs and

carbon tetrachloride for use in laboratory and analytical applications

may no longer be available for this use. Today's action allocates CFCs

for use in metered dose inhalers and methyl chloroform for use in the

Space Shuttle and the Titan Rocket. Laboratory essential uses will not

be addressed in today's rulemaking. A separate final rule addressing

laboratory essential uses will be published at a later date.

What Reporting Requirements Relate to the Essential Uses of Ozone

Depleting Substances?

Any person obtaining class I controlled substances after the

phaseout under the essential use exemptions in today's action is

subject to all the restrictions and requirements in other sections of

40 CFR part 82, subpart A. Holders of essential-use allowances or

persons obtaining class I controlled substances under the essential-use

exemptions must comply with the record keeping and reporting

requirements in 40 CFR 82.13.

IV. Response to Comments

EPA received comments from six organizations in response to the

proposed rule. Three of these organizations commented on various

aspects of the allocation of ODSs for medical devices, and three

discussed the possibility of the lack of essential use exemptions for

laboratory essential uses. Because a final rule addressing laboratory

essential uses will be published separately at a later date, the only

comments discussed in this section are those regarding the essential

use allocation for medical devices.

One commenter stated that EPA may only authorize production and/or

importation of CFCs for an MDI if EPA determines that there is no safe

and effective alternative propellant to the CFCs used in the MDI. The

commentor asserts that FDA approval of a product under the FDCA means

that the alternative propellant in that product is safe and effective

for purposes of the CAA. The effect of this interpretation would be

limited, according to the commentor, because ``it is only the CFC-

containing product that contains the same active moiety and same

labeled indications that no longer qualifies as a `medical device.' ''

We do not share the commentor's interpretation of the statutory

language.

[[Page 722]]

The first prong of the definition of ``medical device'' reads as

follows: ``The term ``medical device'' means any device * * *,

diagnostic product, drug * * *, and drug delivery system * * * if such

device, product, drug, or drug delivery system utilizes a class I or

class II substance for which no safe and effective alternative has been

developed, and where necessary, approved by the Commissioner.''

According to the commentor, the phrase ``for which no safe and

effective alternative has been developed'' modifies ``class I or class

II substance,'' and not ``device, product, drug, or drug delivery

system.'' The difficulty with the commenter's interpretation is that

FDA does not approve MDI propellants separately from drug products.

Thus, it is impossible for FDA to approve an alternative to the class I

or class II substance (i.e., the propellant) alone since FDA only

approves MDIs under an ANDA or NDA as a whole unit and not by approving

each of its components. For this reason, even if we were to agree with

the commentor that the statutory language was clear on its face, this

would be a situation where the literal meaning of the statutory text

would produce absurd results. We believe that the overall purpose of

the CAA language regarding medical devices is to ensure that EPA's

mission of environmental protection does not conflict with FDA's

mission of protecting the public health. Consistent with this purpose,

we believe that in drafting this prong of the definition, Congress was

focusing on the availability of alternative medical treatment for

patients who rely on CFC MDIs. We are not the appropriate agency to

decide whether such alternative medical treatment is available. We do

not believe that Congress intended EPA to make decisions involving

medical judgment. On such questions, we defer to FDA. Because FDA has

not identified any ``safe and effective alternative,'' as the phrase is

used in the CAA, for any CFC MDI, the first prong of the definition of

``medical device'' has not affected today's allocation.

One commentor asserted that ``the CAA contemplates a product-by-

product determination of essentiality at the time a particular product

is approved,'' and that this principle applies to generic drugs as well

as brand-name drugs. We do not believe that the statutory language

requires each product's essentiality to be determined in a vacuum, as

if no other products of that type existed. The definition of medical

device states that a device, product, drug, or drug delivery system is

a medical device if the first prong of the definition is satisfied and

``if such device, product, drug, or drug delivery system, has, after

notice and opportunity for public comment, been approved and determined

to be essential by the Commissioner in consultation with the

Administrator.'' This language does not prevent FDA from grouping

together particular types of products containing the same active moiety

and determining that all products using a given active moiety are

essential. Our understanding is that FDA has always added uses to its

essential use list through notice and comment rulemaking. Because FDA's

list of essential uses is determined by active moiety and makes no

reference as to whether a drug product is generic or branded, we

believe all MDIs for which we are allocating CFCs are covered by 21 CFR

2.125, regardless of whether they were or will be approved under an NDA

or ANDA.

This commentor also objects to EPA's use of FDA's pre-1990

determinations of essentiality in deciding whether an MDI qualifies as

a ``medical device'' for purposes of the 1990 CAA Amendments. The

commentor states that EPA cannot allocate essential use allowances for

particular MDIs until FDA finalizes the proposed revisions to its

essential use regulations or engages in a separate rulemaking to

determine whether those MDIs are essential.

While we are aware that FDA is currently engaged in rulemaking to

revise its essential use regulations, we are relying on FDA's current

essential use list at 21 CFR 2.125 for purposes of today's action. That

list contains all of FDA's determinations regarding ``essentiality'' to

date. The statute does not specify a particular time at which FDA must

make such a determination or invalidate determinations made prior to

the date of the 1990 CAA Amendments. Additionally, the 1990 Amendments

to the Clean Air Act use language consistent with FDA's regulations at

21 CFR 2.125. We presume that Congress was aware of FDA's regulations

when it passed the 1990 Amendments to the CAA. Therefore, we believe

that the current essential use list remains valid. If FDA revises its

regulations, we will take the revised list into account in future

allocation decisions.

We received several comments on the meaning of the word

``approved'' in section 601(8)(B). In the preamble to the proposed

rule, we stated that EPA and FDA were discussing how best to interpret

this term, and that there were at least two possible interpretations.

One such interpretation was that FDA had to approve the specific

product under the FDCA. The second interpretation was that FDA had to

have approved either that product or another product that contained the

same active moiety. Several commentors stated that the second

interpretation would be contrary to the plain meaning of the statute.

Section 601(8)(B) refers to approval as occurring ``after notice

and opportunity for comment.'' FDA has informed us that approvals of

drug products under the FDCA are issued without notice and comment. For

this reason, FDA has concluded that in using the word ``approved,''

Congress cannot have been referring to approval of the drug product

under the FDCA. We agree with this conclusion. We also note that the

statutory language refers to actions taken by FDA, in consultation with

EPA. FDA does not consult with EPA prior to approving drug products

under the FDCA. Furthermore, FDA points out that it has provided notice

and opportunity for comment prior to adding categories of drug products

to the essential use list in 40 CFR 2.125. (FDA has also informally

consulted with EPA in the course of such actions.) Therefore, FDA

interprets the phrase ``approved and determined to be essential'' as

referring to FDA's action in approving the use of CFCs in MDIs

containing a particular active moiety as an essential use. As a result,

FDA regards all MDIs containing an active moiety that appears on its

essential use list as ``approved'' for purposes of 601(8)(B). According

to this interpretation, an MDI that has not yet received approval of

its ANDA or NDA under the FDCA is considered to be approved as an

essential use if it contains an active moiety that appears on the

essential use list.

Two commentors stated that section 601(8)(B) requires FDA approval

of the ``medical device'' itself and that an active moiety cannot be a

``medical device''. We would like to clarify that the term ``device''

and the phrase ``medical device'' have two separate and distinct

definitions. ``Medical device'' is defined under 601(8) of the CAA.

``Device'' is defined under the FDCA. Furthermore, we are not stating

that the active moiety in an MDI is a ``medical device'' under the CAA.

Rather, FDA and EPA are interpreting section 601(8)(B) to allow MDIs to

be ``approved and determined to be essential'' by active moiety. That

is, if FDA, in consultation with EPA, has listed MDIs containing a

particular active moiety as essential, then a separate determination is

not necessary for each MDI that

[[Page 723]]

contains that active moiety. FDA has listed MDIs with reference to the

active moiety. Therefore, an MDI that contains an active moiety that

appears on FDA's essential use list has been ``approved and determined

to be essential.''

One commentor stated that according to principles of statutory

construction, the term ``approved'' should be interpreted the same way

in section 601(8)(A) and section 601(8)(B). We believe that the term

``approved'' must be interpreted in light of the surrounding language

in each instance. Section 601(8)(B) requires notice-and-comment

rulemaking and refers to action by FDA, in consultation with EPA. Since

approval under the FDCA involves unilateral action by FDA without

notice-and-comment rulemaking, it is reasonable to conclude that

section 601(8)(B) does not refer to approval of an NDA or ANDA under

the FDCA. Instead, we interpret the phrase ``approved and determined to

be essential'' as referring to any MDI that contains an active moiety

appearing on FDA's essential use list. This interpretation is

consistent with the surrounding language, as FDA adds uses to its list

through notice-and-comment rulemaking, and EPA has a clear interest in

being consulted regarding the listing of essential uses of ODS.

In regard to section 601(8)(A), we interpret this section as

requiring a determination by FDA that there is a ``safe and effective

alternative'' to a CFC MDI. Approval under the FDCA may be a

prerequisite to such a determination. (We note that the statutory

language calls for approval ``where necessary.'') Because section

601(8)(A) does not refer to notice and comment rulemaking or

consultation with EPA, it is reasonable to interpret the reference to

``approval'' as a reference to approval under the FDCA. However,

neither EPA nor FDA views FDA approval of a non-CFC product under the

FDCA as constituting a determination that the product is a ``safe and

effective alternative'' to any CFC MDI. That determination would

require a separate analysis. FDA has described some of the factors that

would enter into such an analysis in the preamble to its September 1,

1999 notice of proposed rulemaking on essential use determinations (64

FR 47735), and we refer the reader to that notice for further details.

This commentor also stated that the term ``approved'' as used in

section 601(8)(B) should be interpreted as it is interpreted under the

FDCA, to refer to the entire drug product rather than simply the active

ingredients. For the reasons stated above, we have concluded that the

word ``approved'' in section 601(8)(B) does not refer to approval under

the FDCA.

One commentor stated that EPA had not meaningfully addressed the

requirements of section 604(d)(2) of the CAA, the exception for medical

devices. This commentor stated that EPA must provide information on

``current market demand for the use of CFCs in particular MDIs, what

quantities of CFCs were requested by particular companies in their

annual applications for each particular active moiety and how the

essential use allowances are ``necessary'' or ``limited'', and how the

applicant met its burden of demonstrating that it qualifies for CFCs

under the essential use criteria set out in the Act.''

Section 604(d)(2) of the CAA states that ``the Administrator, after

notice and opportunity for public comment, shall, to the extent such

action is consistent with the Montreal Protocol, authorize the

production of limited quantities of class I substances solely for use

in medical devices if such authorization is determined by the

Commissioner, in consultation with the Administrator, to be necessary

for use in medical devices.'' As described in Section II of this

preamble, EPA and FDA have consulted on whether the limited quantities

contained in the proposed rule were ``necessary'' for use in medical

devices, and FDA has determined that 2737.3 tons of the proposed amount

are ``necessary.'' Accordingly, in this interim final rule, EPA is

allocating 2737.3 tons for use in medical devices.

With regard to the commentor's request for information, the letter

from FDA states the following: ``. . . we [FDA] have examine the table

in your [EPA] proposed rule that lists the essential use amounts

requested by sponsors for production of medical devices (64 FR 59143,

Table 1). We have also examined the information you obtained from

individual sponsors regarding their intended use of CFCs in specific

products. We compared this information to the information filed with us

by sponsors in their annual reports.'' FDA goes on to say ``In listing

the amounts we believe to be necessary for use in medical devices, we

referred to historical use and have included an additional amount to

allow for overage, for waste during manufacturing, for uncertainties in

the supply chain of CFCs since they are no longer produced in the

United States, for changes in future market shares of specific

products, as well as for unforeseen circumstances in the market. We

also provided additional amounts based on our knowledge of certain

manufacturing problems. In addition, we eliminated any double-counting

we found and eliminated allocations for uses not considered essential

by the parties to the Montreal Protocol, even if those uses are

currently listed in our regulation at 21 CFR 2.125(e).'' FDA also noted

that they accounted for CFCs for use in the production of MDIs that

would ultimately be exported to Canada. It should be noted that much of

the data that FDA used in their analysis were confidential business

information and cannot be shared publicly. These confidential data

included each applicant's response to EPA's request for information on

the quantity of each CFC to be used in the manufacture of specific

products in calendar year 2000, EPA's historical data on yearly import

and actual use of CFCs for each company, and information filed with FDA

by drug sponsors in their annual reports.

The commentor further stated that in order to achieve the

congressional objective of reducing and eliminating production and use

of ODS ``as expeditiously as possible,'' ``EPA and FDA must conclude

that new MDIs are not `necessary' where FDA has approved or issued an

`apposable' letter for a CFC-free alternative involving the same active

moiety and overlapping labeling as that in the CFC-containing MDI.''

The commentor also states that if EPA nonetheless finds that CFCs are

necessary for these MDIs, EPA must limit the quantities allocated to

those that are necessary until the CFC-free alternative is approved.

The commentor goes on to describe this stance as a ``policy.''

Under section 604(d)(2) of the CAA, FDA (in consultation with EPA)

determines whether production or import of CFCs for MDIs is necessary.

EPA does not independently make such a determination, as the comment

appears to suggest. We defer to FDA on the wisdom of adopting the

policy urged by the commentor. The commentor has not demonstrated that

this policy is compelled by the statutory language. For purposes of

today's action, we are relying on FDA's determination that the

quantities allocated in the final rule are ``necessary.''

One commenter stated that EPA must ensure that its allocation is

consistent with the decisions and recommendations of the Parties to the

Montreal Protocol. The commenter refers to two existing decisions:

Decision IV/25, which provides criteria for assessing essential uses

for purposes

[[Page 724]]

of the Protocol's control measures, and Decision VIII/10, which

addresses the transition away from CFC-based MDIs.

Decision IV/25 contemplates that Parties nominating essential uses

will apply the stated criteria at the time of nomination, and that the

Protocol's Technology and Economic Assessment Panel will apply these

criteria in developing its recommendations on whether the Parties

should approve the nominated uses and quantities at their yearly

meeting. Thus, these criteria drive the essential use process at the

international level. The uses to which we are allocating CFCs in

today's action were approved at the Tenth Meeting of the Parties, after

nomination by the U.S. and evaluation by the Technology and Economic

Assessment Panel. Therefore, we believe today's allocation is

consistent with the Protocol. In addition, the commenter has not

identified any respect in which these uses fail to meet the criteria in

Decision IV/25.

Decision VIII/10 describes a variety of actions that Parties are to

request MDI companies to undertake. For example, Parties are to

``request companies applying for MDI essential-use exemptions to

demonstrate that they are undertaking individual or collaborative

industry efforts, in consultation with the medical community, to

educate health-care professionals and patients about other treatment

options and the transition to non-CFC alternatives.'' (Decision VIII/

10(2)) The TEAP Handbook on Essential Use Nominations was revised in

1997 to incorporate requests relevant to Decision VIII/10. For example,

question B.2. of the form entitled ``Nomination of the Aerosol Metered

Dose Inhaler (MDI) as an Essential Use,'' in Appendix D of the TEAP

Handbook on Essential Use Nominations, requests applicants to ``List

and describe in detail the education efforts, individual and/or

collaborative, being undertaken to advise patients and health care

professionals about treatment options and the transition to non-CFC

alternatives.'' EPA requests companies applying for MDI essential-use

exemptions to submit the information specified in the TEAP Handbook,

including the information relevant to Decision VIII/10 . Nevertheless,

we do not view Decision VIII/10 as imposing barriers to allocation. The

Decision does not attach any consequences to the company's failure to

comply with any of the requests. The commenter incorrectly describes

Decision VIII/10 as ``requiring'' manufacturers of CFC MDIs to take the

specified actions. By its own terms, the Decision simply states that

Parties ``will request'' companies to take these actions.

One commenter stated that under the CAA EPA cannot allocate CFCs to

Medisol Laboratories for use in their generic albuterol MDI because

this product does not fall within the definition of a ``medical

device'' under the statute. For reasons stated above, EPA considers the

generic albuterol MDI to be a medical device as defined by the statute

and thus eligible to receive essential use allowances. While we are

aware that FDA has approved a CFC-free albuterol product, FDA has not

determined that this product is a ``safe and effective alternative'' to

the Medisol generic albuterol MDI. In addition, albuterol is an

adrenergic bronchodilator. FDA continues to regard the use of CFCs in

``[m]etered-dose adrenergic bronchodilator human drugs for oral

inhalation'' as essential (21 CFR 2.125(e)(3)). Because FDA's list of

essential uses makes no reference as to whether a drug product is

generic or branded, we believe all MDIs for which we are allocating

CFCs are covered under 21 CFR 2.125 regardless of whether they were or

will be approved under an NDA or ANDA. Therefore, we believe that CFC

albuterol MDIs are ``medical devices.'' Finally, we have based our

allocation of 49 tons of CFCs to Medisol on FDA's determination that

this quantity is ``necessary'' under CAA section 604(d)(2).

One commenter stated that Sciarra's application for essential use

allowances for production of albuterol, epinephrine hydrochloride,

ipratropium bromide, triamcinalone acetonide, beclomethasone

dipropionate, and cromolyn sodium MDIs should be denied because these

products do not satisfy many, if not all of the requirements set by the

CAA. According to the commenter, an albuterol MDI should not qualify as

a ``medical device'' under the CAA because there is a ``safe and

effective alternative propellant'' (HFC-134a), that is, a safe and

effective alternative to the CFCs used in albuterol MDIs. Additionally,

the commenter stated that FDA has not determined that the generic

products listed above are essential after notice and opportunity for

public comment. The commenter also noted that FDA has issued apposable

letters for CFC-free versions of all the above moieties except

epinephrine and ipratripium, and concluded that even if these products

qualify as ``medical devices,'' the allocation of CFCs is not

``necessary.'' Additionally, the commenter stated that Sciarra's

application provided inadequate information in its response to the

Protocol criteria. Specifically, Sciarra did not provide information

about the availability of alternatives to CFC MDIs or information on

its plans for implementation of these alternatives. The commenter did

note that Sciarra had stated that it would develop its own non-CFC

products after receiving approval for its CFC-containing products.

As stated before, while FDA has approved a CFC-free albuterol

product, FDA has not determined that this product is a ``safe and

effective alternative'' to any other albuterol product. In addition,

albuterol is an adrenergic bronchodilator. FDA continues to regard the

use of CFCs in ``[m]etered-dose adrenergic bronchodilator human drugs

for oral inhalation'' as essential (21 CFR 2.125(e)(3)). Therefore, we

believe that CFC albuterol MDIs are ``medical devices.'' Our

understanding is that FDA has always added uses to its essential use

list through notice and comment rulemaking. Because FDA's list of

essential uses makes no reference as to whether a drug product is

generic or branded, we believe all MDIs for which we are allocating

CFCs are covered under 21 CFR 2.125 regardless of whether they were or

will be approved under an NDA or ANDA. In Sciarra's response to the CAA

section 114 letter that EPA sent to MDI manufacturers on October 13,

1999, Sciarra provided a refined list of moieties for the MDIs for

which it is requesting CFCs. The use of any of these moieties in an MDI

is essential under 21 CFR 2.125(e). With the regard to the issue of

whether CFCs are ``necessary'' for the Sciarra MDIs, we are relying on

FDA's determination. FDA, in its analysis of the amount of CFCs

necessary for the production of MDIs, determined that much of the

quantity we had proposed to allocate to Sciarra was not ``necessary''

because at present, Sciarra does not have any currently approved CFC

MDIs. The essential use allocation for Sciarra was reduced accordingly

in this interim final rule.

The TEAP Handbook contains several questions relating to the

availability of alternatives. As we noted earlier, many of the

questions in the current TEAP Handbook derive from Decision VIII/10.

This Decision directs the Parties to request certain information from

companies applying for MDI essential-use exemptions. However, it does

not attach specific consequences to a company's failure to provide

information, nor does it state what constitutes an adequate response.

[[Page 725]]

One commenter stated that the application for CFCs from Schering

should be denied only if EPA also denies CFC applications for albuterol

MDIs for all other companies marketing such products. The commenter

identified Schering as the company that markets the non-CFC albuterol

MDI. For the reasons stated above, EPA is allocating CFCs to

manufacturers of CFC albuterol MDIs, including Schering.

One commenter stated that the public version of the application for

the International Pharmaceutical Aerosol Consortium (IPAC) did not

provide information about the specific products that would be

manufactured using the essential use allowances. The commenter noted

that Medeva Americas is one of the companies identified in the IPAC

proposal, and stated that this company markets a generic CFC albuterol

MDI. The commenter further stated that another IPAC company, Glaxo

Wellcome, markets a CFC albuterol MDI. According to the commenter,

neither of these companies should receive CFC allocations for these

products.

IPAC completed the application for essential use allowances in

accordance with the TEAP Handbook. EPA requested information about the

specific products for which the allowances would be used from IPAC's

member companies in a letter issued pursuant to section 114 of the CAA

on October 13, 1999. The responses to these letters are considered

confidential business information and are therefore not available in

the public docket. As stated earlier FDA used this information in its

analysis of what quantities of CFCs are necessary for the production of

medical devices as defined in the Act. Each of the products for which

FDA determined a quantity of CFCs to be necessary is ``essential''

under 21 CFR 2.125(e). Since the commenter specifically mentions

albuterol, we note again that albuterol is an adrenergic

bronchodilator. FDA continues to regard the use of CFCs in ``[m]etered-

dose adrenergic bronchodilator human drugs for oral inhalation'' as

essential (21 CFR 2.125(e)(3)). Our understanding is that FDA has

always added uses to its essential use list through notice and comment

rulemaking. Because FDA's list of essential uses makes no reference as

to whether a drug product is generic or branded, we believe all MDIs

for which we are allocating CFCs are covered under 21 CFR 2.125

regardless of whether they were or will be approved under an NDA or

ANDA. Furthermore, as stated before, while FDA has approved a CFC-free

albuterol product, FDA has not determined that this product is a ``safe

and effective alternative'' to any other albuterol product. Therefore,

we believe that CFC albuterol MDIs are ``medical devices.''

One commenter stated that EPA determines the safety and efficacy of

alternatives to CFCs under the Significant New Alternatives Policy

(SNAP) program (section 612 of the CAA). The commenter further stated

that EPA relies upon FDA's approval of medical products containing

alternative propellants as a determination that the alternative

propellant has no adverse human health effects. The commenter concluded

that ``when FDA approves a product containing an alternative propellant

as safe and effective under the FDCA, EPA concludes that the non-CFC

propellant in that product is safe and effective for the purposes of

the CAA.''

Under section 612 of the CAA, EPA determines whether substitutes

for ozone-depleting substances may present adverse effects to human

health or the environment. In the SNAP rule published in the Federal

Register on March 18, 1994 (59 FR 13044), EPA stated: ``Some medical

devices * * * currently contain class I or class II compounds. The

Agency has determined that such products are exempt from further review

for human health effects under the SNAP program where FDA approval of

such effects is required before a product can be introduced into

commerce. EPA will rely in its SNAP determination on FDA's conclusions

regarding health effects. The Agency believes this exemption is

justified because of the higher burden of proof placed on submitters

under the FDCA. However, the Agency will continue to evaluate all other

environmental effects of the proposed substitute, and will consult with

the FDA to determine the appropriate course of action.'' (59 FR

130660).

The quoted language simply indicates that EPA will conclude that a

substitute does not present adverse health effects if FDA approves,

under the FDCA, a product containing the substitute. It does not say

that EPA will treat the product approval as a determination that the

substitute is a ``safe and effective alternative'' to the ODS for

purposes of section 601(8)(A). FDA approval of a CFC-free MDI under the

FDCA does not constitute approval of the non-CFC propellant as safe and

effective. Such approval relates to the product in its entirety, not to

the propellant. Therefore, it would be inappropriate for the EPA to

conclude from FDA's approval of a non-CFC MDI that the non-CFC

propellant had been approved for use in MDIs generally. In listing

acceptable alternatives under the SNAP program, EPA does not intend to

preempt FDA's role in approving individual products or in deciding

whether a particular product is a safe and effective alternative for

another.

V. Administrative Requirements

A. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public

Law 104-4, establishes requirements for Federal agencies to assess the

effects of their regulatory actions on State, local, and tribal

governments and the private sector.

Under section 202 of the UMRA, EPA generally must prepare a written

statement, including a cost-benefit analysis, for proposed and final

rules with ``Federal mandates'' that may result in expenditures by

State, local, and tribal governments, in the aggregate, or by the

private sector, of $100 million or more in any one year. Before

promulgating an EPA rule for which a written statement is needed,

section 205 of the UMRA generally requires EPA to identify and consider

a reasonable number of regulatory alternatives and adopt the least

costly, most cost-effective or least burdensome alternative that

achieves the objectives of the rule. The provisions of section 205 do

not apply when they are inconsistent with applicable law. Moreover,

section 205 allows EPA to adopt an alternative other than the least

costly, most cost-effective or least burdensome alternative if the

Administrator publishes with the final rule an explanation why that

alternative was not adopted. Section 204 of the UMRA requires the

Agency to develop a process to allow elected state, local, and tribal

government officials to provide input in the development of any

proposal containing a significant Federal intergovernmental mandate.

Before EPA establishes any regulatory requirements that may

significantly or uniquely affect small governments, including tribal

governments, it must have developed under section 203 of the UMRA a

small government agency plan. The plan must provide for notifying

potentially affected small governments, enabling officials of affected

small governments to have meaningful and timely input in the

development of EPA regulatory proposals with significant Federal

intergovernmental mandates, and informing, educating, and advising

small governments on compliance with the regulatory requirements.

[[Page 726]]

Today's rule contains no Federal mandates (under the regulatory

provisions of Title II of the UMRA) for State, local, or tribal

governments or the private sector. Because this rule imposes no

enforceable duty on any State, local or tribal government it is not

subject to the requirements of sections 202 and 205 of the UMRA. EPA

has also determined that this rule contains no regulatory requirements

that might significantly or uniquely affect small governments;

therefore, EPA is not required to develop a plan with regard to small

governments under section 203. Finally, because this rule does not

contain a significant intergovernmental mandate, the Agency is not

required to develop a process to obtain input from elected state,

local, and tribal officials under section 204.

B. Executive Order 12866

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the

Agency must determine whether this regulatory action is ``significant''

and therefore subject to OMB review and the requirements of the

Executive Order. The Order defines ``significant regulatory action'' as

one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more,

or adversely affect in a material way the economy, a sector of the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local, or tribal governments or

communities;

(2) Create a serious inconsistency or otherwise interfere with an

action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlement, grants,

user fees, or loan programs or the rights and obligations of recipients

thereof; or

(4) Raise novel legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

the Executive Order. It has been determined by OMB and EPA that this

action is not a ``significant regulatory action'' under the terms of

Executive Order 12866 and is therefore not subject to OMB review under

the Executive Order.

C. Paperwork Reduction Act

This action does not add any information collection requirements or

increase burden under the provisions of the Paperwork Reduction Act, 44

U.S.C. 3501 et seq. The Office of Management and Budget (OMB)

previously approved the information collection requirements contained

in the final rule promulgated on May 10, 1995, and assigned OMB control

number 2060-0170 (EPA ICR No. 1432.16).

Burden means the total time, effort, or financial resources

expended by persons to generate, maintain, retain, or disclose or

provide information to or for a Federal agency. This includes the time

needed to review instructions; develop, acquire, install, and utilize

technology and systems for the purposes of collecting, validating, and

verifying information, processing and maintaining information, and

disclosing and providing information; adjust the existing ways to

comply with any previously applicable instructions and requirements;

train personnel to be able to respond to a collection of information;

search data sources; complete and review the collection of information;

and transmit or otherwise disclose the information.

An Agency may not conduct or sponsor, and a person is not required

to respond to, a collection of information unless it displays a

currently valid OMB control number. The OMB control numbers for EPA's

regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

D. Executive Order 13084: Consultation and Coordination With Indian

Tribal Governments

Under Executive Order 13084, EPA may not issue a regulation that is

not required by statute, that significantly or uniquely affects the

communities of Indian tribal governments, and that imposes substantial

direct compliance costs on those communities, unless the Federal

government provides the funds necessary to pay the direct compliance

costs incurred by the tribal governments, or EPA consults with those

governments. If EPA complies by consulting, Executive Order 13084

requires EPA to provide to the Office of Management and Budget, in a

separately identified section of the preamble to the rule, a

description of the extent of EPA's prior consultation with

representatives of affected tribal governments, a summary of the nature

of their concerns, and a statement supporting the need to issue the

regulation. In addition, Executive Order 13084 requires EPA to develop

an effective process permitting elected officials and other

representatives of Indian tribal governments ``to provide meaningful

and timely input in the development of regulatory policies on matters

that significantly or uniquely affect their communities.'' Today's rule

does not significantly or uniquely affect the communities of Indian

tribal governments. Accordingly, the requirements of section 3(b) of

Executive Order 13084 do not apply to this rule.

E. Regulatory Flexibility

After considering the economic impacts of today's final rule on

small entities, EPA has determined that it is not necessary to prepare

a regulatory flexibility analysis in connection with this final rule.

EPA has also determined that this action will not have a significant

economic impact on a substantial number of small entities. This rule

does not have a significant impact on a substantial number of small

entities. The only entities that are directly affected by this

allocation are those to which CFCs and other ODSs are being allocated.

There are only ten entities which are affected by this rulemaking (see

table 1 above). This rule does not have an adverse economic impact on

any entity because it grants exceptions to a pre-existing ban.

F. Applicability of Executive Order 13045: Protection of Children From

Environmental Health Risks and Safety Risks

Executive Order 13045: ``Protection of Children from Environmental

Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies

to any rule that (1) is determined to be ``economically significant''

as defined under Executive Order 12866, and (2) concerns an

environmental health and safety risk that EPA has reason to believe may

have a disproportionate effect on children. If the regulatory action

meets both criteria, the Agency must evaluate the environmental health

or safety effects of the planned rule on children, and explain why the

planned regulation is preferable to other potentially effective and

reasonably feasible alternatives considered by the Agency. EPA

interprets Executive Order 13045 as applying only to those regulatory

actions that are based on health or safety risks, such that the

analysis required under section 5-501 of the Order has the potential to

influence the regulation. This rule is not subject to Executive Order

13045 because it implements the phaseout schedule and exemptions

established by Congress in Title VI of the Clean Air Act.

G. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement

Act of 1995 (``NTTAA''), Public Law No. 104-113, section 12(d) (15

U.S.C. 272 note) directs EPA to use voluntary consensus standards in

its regulatory activities unless to do so would be

[[Page 727]]

inconsistent with applicable law or otherwise impractical. Voluntary

consensus standards are technical standards (e.g., materials

specifications, test methods, sampling procedures, and business

practices) that are developed or adopted by voluntary consensus

standards bodies. The NTTAA directs EPA to provide Congress, through

OMB, explanations when the Agency decides not to use available and

applicable voluntary consensus standards. This rule does not involve

technical standards. Therefore, EPA did not consider the use of any

voluntary consensus standards.

H. Executive Order 13132 (Federalism)

Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August

10, 1999), requires EPA to develop an accountable process to ensure

``meaningful and timely input by State and local officials in the

development of regulatory policies that have federalism implications.''

``Policies that have federalism implications'' is defined in the

Executive Order to include regulations that have ``substantial direct

effects on the States, on the relationship between the national

government and the States, or on the distribution of power and

responsibilities among the various levels of government.'' Under

Executive Order 13132, EPA may not issue a regulation that has

federalism implications, that imposes substantial direct compliance

costs, and that is not required by statute, unless the Federal

government provides the funds necessary to pay the direct compliance

costs incurred by State and local governments, or EPA consults with

State and local officials early in the process of developing the

proposed regulation. EPA also may not issue a regulation that has

federalism implications and that preempts State law unless the Agency

consults with State and local officials early in the process of

developing the proposed regulation.

If EPA complies by consulting, Executive Order 13132 requires EPA

to provide to the Office of Management and Budget (OMB), in a

separately identified section of the preamble to the rule, a federalism

summary impact statement (FSIS). The FSIS must include a description of

the extent of EPA's prior consultation with State and local officials,

a summary of the nature of their concerns and the agency's position

supporting the need to issue the regulation, and a statement of the

extent to which the concerns of State and local officials have been

met. Also, when EPA transmits a draft final rule with federalism

implications to OMB for review pursuant to Executive Order 12866, EPA

must include a certification from the agency's Federalism Official

stating that EPA has met the requirements of Executive Order 13132 in a

meaningful and timely manner. This interim final rule will not have

substantial direct effects on the States, on the relationship between

the national government and the States, or on the distribution of power

and responsibilities among the various levels of government, as

specified in Executive Order 13132. This interim final rule will affect

only the ability of private entities and the national government to

request production of controlled ozone-depleting substances. Thus, the

requirements of section 6 of the Executive Order do not apply to this

rule.

VI. Judicial Review

Under Section 307(b)(1) of the Act, EPA finds that these

regulations are of national applicability. Accordingly, judicial review

of this action is available only by the filing of a petition for review

in the United States Court of Appeals for the District of Columbia

Circuit within sixty days of publication of this action in the Federal

Register. Under Section 307(b)(2), the requirements of this rule may

not be challenged later in judicial proceedings brought to enforce

those requirements.

VII. Congressional Review

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the

Small Business Regulatory Enforcement Fairness Act of 1996, generally

provides that before a rule may take effect, the agency promulgating

the rule must submit a rule report, which includes a copy of the rule,

to each House of the Congress and to the Comptroller General of the

United States. Section 808 allows the issuing agency to make a rule

effective sooner than otherwise provided by the CRA if the agency makes

a good cause finding that notice and public procedure is impracticable,

unnecessary or contrary to the public interest. This determination must

be supported by a brief statement. 5 U.S.C. 808(2). As stated

previously, EPA has made such a good cause finding, including the

reasons therefor, and established an effective date of January 6, 2000.

EPA will submit a report containing this rule and other required

information to the U.S. Senate, the U.S. House of Representatives, and

the Comptroller General of the United States prior to publication of

the rule in the Federal Register. This action is not a ``major rule''

as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 82

Environmental protection, Administrative practice and procedure,

Air pollution control, Chemicals, Chlorofluorocarbons, Exports,

Hydrochlorofluorocarbons, Imports, Ozone layer, Reporting and

recordkeeping requirements.

Dated: December 30, 1999.

Carol M. Browner,

Administrator.

40 CFR Part 82 is amended as follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

1. The authority citation for part 82 continues to read as follows:

Authority: 42 U.S.C. 7414, 7601, 7671-7671q.

Subpart A--Production and Consumption Controls

2. Section 82.4(t)(2) is amended by revising the table to read as

follows:

Sec. 82.4 Prohibitions.

* * * * * *

(t) * * *

(2) * * *

[[Page 728]]

Table I.--Essential Use Allocation for Calendar Year 2000

------------------------------------------------------------------------

Quantity

Company Chemical (metric

tons)

------------------------------------------------------------------------

(i) Metered Dose Inhalers for Treatment of Asthma and Chronic

------------------------------------------------------------------------

International Pharmaceutical CFC-11 or............. 1639.0

Aerosol Consortium (IPAC)--Medeva CFC-12 or

Americas, Inc., Boehringer CFC-114

Ingelheim Pharmaceuticals, Glaxo

Wellcome, Rhone-Poulenc Rorer, 3M.

Medisol Laboratories, Inc.......... CFC-11 or............. 49.0

CFC-12 or

CFC-114

Schering Corporation............... CFC-11 or............. 1048.0

CFC-12 or

CFC-114

Sciarra Laboratories, Inc.......... CFC-11 or............. 1.3

CFC-12 or

CFC-114

------------------------------------------------------------------------

(2)(ii) Cleaning, Bonding and Surface Activation Applications for the

Space Shuttle Rockets and Titan Rockets

------------------------------------------------------------------------

National Aeronautics and Space Methyl Chloroform..... 56.7

Administration (NASA)/Thiokol

Rocket.

United States Air Force/Titan Methyl Chloroform..... 3.4

Rocket.

------------------------------------------------------------------------

* * * * *

[FR Doc. 00-273 Filed 1-5-00; 8:45 am]

BILLING CODE 6560-50-P