Removal of Exemption for Certain Pseudoephedrine Products Marketed Under the Federal Food, Drug, and Cosmetic Act (FD&C Act)

Federal RegisterAug 7, 1996

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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Parts 1309, 1310 and 1313

[DEA-138F]

RIN 1117-AA32

Removal of Exemption for Certain Pseudoephedrine Products

Marketed Under the Federal Food, Drug, and Cosmetic Act (FD&C Act)

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION: Final rule.

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SUMMARY: This rule is issued by the Deputy Administrator of the Drug

Enforcement Administration (DEA) to remove the exemption for certain

products containing pseudoephedrine (which are lawfully marketed under

the Federal Food, Drug, and Cosmetic Act) from the regulatory chemical

control provisions of the Controlled Substances Act (CSA) and the

Controlled Substances Import and Export Act. This rule finalizes a

Notice of Proposed Rulemaking (NPRM) published in the Federal Register

on October 31, 1995 (60 FR 55348).

Due to the large scale utilization of over-the-counter (OTC)

pseudoephedrine products for the clandestine manufacture of controlled

substances, the DEA has determined that certain products should be

subject to recordkeeping, reporting, registration and notification

requirements of the CSA to prevent their diversion. Such products

include OTC tablets, capsules and powder packets containing

pseudoephedrine alone or in combination with antihistamines,

guaifenesin or dextromethorphan. This action also reduces the threshold

for pseudoephedrine to 48.0 grams pseudoephedrine base. Such a

threshold is sufficient to permit the purchase of up to a 244 day

supply of OTC pseudoephedrine drug products without the application of

regulatory requirements. In addition, the cumulative threshold

requirement for multiple transactions of pseudoephedrine drug products

in a calendar month will not apply to sales for personal use. To

further ensure the availability of pseudoephedrine products to

legitimate consumers at the retail level, this action also waives the

registration requirement for retail distributors of regulated

pseudoephedrine products.

EFFECTIVE DATES: October 7, 1996. Persons seeking registration must

apply on or before November 20, 1996, in order to continue to

distribute, import or export pseudoephedrine products for which

registration is required pending final action by the DEA on their

application.

FOR FURTHER INFORMATION CONTACT:

Howard McClain Jr., Chief, Drug and Chemical Evaluation Section, Office

of Diversion Control, Drug Enforcement Administration, Washington, DC

20537. Telephone (202) 307-7183.

SUPPLEMENTARY INFORMATION: On October 31, 1995, the DEA published a

Notice of Proposed Rulemaking (NPRM) which proposed the removal of the

exemption for certain over-the-counter (OTC) pseudoephedrine products

from the chemical control provisions of the Controlled Substances Act

(CSA). The NPRM documented the increasing problem of OTC product

diversion for use as precursor material in the clandestine production

of methamphetamine.

The clandestine manufacture and distribution of methamphetamine are

serious national public health problems which require Federal action.

Methamphetamine, a Schedule II Controlled Substance, is the most

prevalent controlled substance clandestinely synthesized in the United

States. Between January 1, 1994 and December 31, 1995, the DEA has been

involved in the domestic seizure of 587 methamphetamine laboratories.

Ephedrine and/or pseudoephedrine were utilized as the precursor

material at the vast majority of these laboratories.

The significance of the abuse of methamphetamine is well known and

documented. In recent years the problem has increased dramatically. In

1994. alone, there were over 700 methamphetamine related deaths in the

United States.

The DEA monitors Medical Examiner (ME) data from approximately 42

medical examiners located in major cities in the contiguous 48 states.

Nationally, ME reported deaths related to methamphetamine increased

145% from 1992 to 1994 and there were 1816 deaths for the period 1991

to 1994. In addition, methamphetamine emergency room episodes increased

significantly in 1993 and 1994. Current data indicate the illicit

production, distribution and abuse of methamphetamine remain a serious

problem.

In addition, evidence of the illicit utilization of pseudoephedrine

in clandestine laboratories is increasing. The identification of OTC

pseudoephedrine products at clandestine methamphetamine laboratories

increased dramatically in 1995.

The NPRM documented that pseudoephedrine was utilized in 22 percent

of the laboratories seized from January 1, 1995 through September 1995.

DEA thereby acted to place regulatory controls on these products in an

effort to further minimize the availability of widely used precursor

material and ultimately protect the public health. Since publication of

the NPRM, the extent of diversion of OTC pseudoephedrine products has

intensified in the United States. End of year data for 1995 indicates

that at least 28 percent of the clandestine methamphetamine

laboratories seized utilized pseudoephedrine.

In recent years, the diversion of OTC products has been the

predominant source of precursor material for the clandestine synthesis

of methamphetamine. As regulatory controls were implemented to counter

the diversion of specific types of OTC products, clandestine laboratory

operators have been successful in circumventing these controls to

obtain precursor material through the diversion of millions of OTC

dosage units of exempt products. The NPRM documents the progression of

the diversion from bulk ephedrine, to single entity OTC ephedrine

products, to OTC ephedrine combination products and OTC pseudoephedrine

products.

As stated in the NPRM, since 1989 ephedrine has been the primary

precursor used in the clandestine synthesis of methamphetamine in the

United States. Clandestine laboratory operators exploited the lack of

control on OTC ephedrine products (such as tablets/capsules) to

purchase millions of dosage units for the synthesis of methamphetamine

and methcathinone.

[[Page 40982]]

The Domestic Chemical Diversion Control Act (DCDCA) of 1993 (Pub.

L. 103-200) became effective on April 16, 1994. This Act further

amended the CSA and the Controlled Substances Import and Export Act and

removed the exemption for those transactions involving products which

are marketed or distributed lawfully in the United States under the

Federal Food, Drug, and Cosmetic Act, if these products contain

ephedrine (or its salts, optical isomers, or salts of optical isomers)

as the only active medicinal ingredient or contain ephedrine in

combination with therapeutically insignificant quantities of another

active medicinal ingredient. Thus, single entity ephedrine products

became subject to registration, reporting, recordkeeping and

notification requirements of the CSA. The DCDCA, however, did not

remove the exemption provided for pseudoephedrine OTC products, since

the known illicit use of pseudoephedrine was relatively infrequent when

the DCDCA was enacted.

The DCDCA also provided the Attorney General with the authority (21

U.S.C. 814) to remove the exemption for any drug product containing a

listed chemical upon a determination that the drug product is being

diverted for use in the illicit production of a controlled substance.

In addition, the DCDCA imposed registration requirements for List I

chemical distributors, importers and exporters.

The Chemical Diversion and Trafficking Act (CDTA) established a

system of thresholds for each listed chemical to determine which

transactions would be subject to regulatory controls. Reporting,

recordkeeping and notification requirements apply to all regulated

transactions which meet or exceed these threshold amounts of a listed

chemical. The threshold for ephedrine was originally established as 1.0

kilogram for domestic, import and export transactions. The threshold of

1.0 kilogram of ephedrine base is equivalent to greater than 48,800

ephedrine 25 mg dosage units. Even though the dosage form exemption was

eliminated by the DCDCA, a 1.0 kilogram threshold was not adequate to

prevent the significant diversion of ephedrine to clandestine

laboratories in the United States.

Given evidence of the large-scale diversion of ephedrine from

various types of outlets and the public health threat imposed by the

diversion of these products, the DEA determined that additional action

was needed to prevent further diversion. Effective November 10, 1994,

(59 FR 51365) the DEA eliminated the threshold for ephedrine.

Subsequently, all regulated transactions of ephedrine became subject to

reporting recordkeeping and notification requirements of the CSA

regardless of size.

In response to regulatory and other actions taken against single-

entity ephedrine products, clandestine laboratory operators have again

attempted to circumvent CSA chemical controls in an effort to obtain

precursor material. The search for unregulated sources of precursor

material has led to the diversion and illicit utilization of OTC

ephedrine combination products and OTC pseudoephedrine products. The

DEA is currently reviewing the regulatory options which address the

diversion of OTC ephedrine combination products. This issue will be

addressed in the near future.

Pseudoephedrine and ephedrine are related as disastereomers.

Because of this structural relationship, pseudoephedrine can serve as a

direct substitute for ephedrine in the synthesis of methamphetamine.

Clandestine laboratory operators are exploiting the lack of regulatory

controls on OTC pseudoephedrine products by obtaining pseudoephedrine

for use as precursor material for the synthesis of controlled

substances.

The DEA is aware of the large scale legitimate use of OTC

pseudoephedrine products and their widespread distribution. However,

the DEA believes that the registration, recordkeeping, reporting and

notification requirements that have been successfully used to limit the

diversion of other chemicals to clandestine laboratories are needed for

some pseudoephedrine products to control this problem.

The DEA has documented both mail order and retail diversion of OTC

pseudoephedrine products for use in the clandestine production of

methamphetamine. In proposing these regulations the DEA has

specifically attempted to target both sources of the problem. In order

for such regulatory action to be effective, it should include

provisions which directly target the problem of indiscriminate

distribution of wholesale level quantities by retail, mail order and

wholesale distributors.

While there is an urgent need to counter the diversion of OTC

pseudoephedrine products for the clandestine production of

methamphetamine, these regulations go to extreme lengths to protect the

availability of these pseudoephedrine decongestant products for

legitimate medical use. While all mail order and wholesale distributors

will be subject to the full extent of CSA chemical regulatory controls,

specific exemptions and waivers have been provided for retail

distributors selling personal use quantities so that these retail

distributors are not adversely impacted.

In writing the NPRM, the DEA proposed the inclusion of four

provisions which would eliminate potentially burdensome requirements

for practically all of the estimated 750,000 retail distributors who

would be impacted if pseudoephedrine products were made subject to the

full extent of the CSA chemical provision established by law. First,

the DEA has provided a waiver from registration for these distributors.

Secondly, the DEA has limited controls to a specific group of products.

Thirdly, the NPRM proposed the establishment of a threshold of 24.0

grams pseudoephedrine base and therefore would allow for the purchase

and sale of up to a 120 day supply of pseudoephedrine for personal

legitimate medical use, without the application of regulatory

requirements. In this final rule, this threshold has been increased to

48.0 grams. Such a threshold would allow for the purchase and sale of

up to a 244 day supply of pseudoephedrine without the application of

regulatory requirements. (A 244 day supply of pseudoephedrine at the

maximum recommended FDA dosage of 240 mg/day would be 976

pseudoephedrine 60 mg tablets.) Lastly, the proposal specifies that the

threshold quantity applies only to a single transaction. Therefore no

cumulative threshold for multiple transactions applies to OTC

pseudoephedrine transactions and there is no requirement to record each

transaction as long as the individual transaction is below the

threshold quantity.

Because of these provisions, no retail distributor will be required

to register or maintain records as long as they distribute only below-

threshold quantities in a single transaction. A retail distributor will

only be required to reports suspicious regulated transactions to the

DEA as per 21 CFR 1310.05.

Public Comments

Interested parties were provided with 60 days in which to comment

on the proposed regulations. The DEA received a total of 17 comments.

While the general tone of the comments was supportive of the need to

counter the clandestine production of controlled substances such as

methamphetamine, the commentors raised a number of concerns regarding

specific provisions of the proposed regulation as follows:

(1) Five commentors requested that the comment period be extended.

The

[[Page 40983]]

DEA responded that the 60 day comment period provided for in the NPRM

was adequate and provided sufficient time for comments. Therefore the

requests for extension were denied.

(2) In response to the NPRM, the National Association of Boards of

Pharmacy (NABP) submitted a letter of strong support for the proposed

regulations. NABP wrote that a nationwide Federal effort, under the

auspices of DEA, was necessary to deal with the diversion of such OTC

products and accordingly NABP supports the present effort to bring the

diversion of drug products containing pseudoephedrine under control.

(3) Numerous commentors expressed concern that the term ``threshold

quantity'' is not defined and that it is not clear in the NPRM whether

the threshold is calculated on a single transaction or on a cumulative

total of multiple purchases during a calendar month. These commentors

stated that the proposed rule will affect the availability of

pseudoephedrine products and retail distributors will be severely

impacted by this proposal if a cumulative threshold applies. Commentors

also expressed concerns that in order to ensure that a cumulative

threshold was not exceeded during a calendar month, retailers would

have to place non-exempt pseudoephedrine products behind the counter

(thus creating a third class of drug products), maintain records of

each and every transaction, register with the DEA and potentially pay

large fines in the event that the cumulative threshold was exceeded.

Several commentors stated that under such regulatory requirements they

feared that retailers would cease to carry non-exempt pseudoephedrine

products and these products would be placed at a competitive

disadvantage. Commentors also stated that most of the distributors will

not be able to afford or simply will not pay the registration fees and

increased costs of paperwork associated with DEA registration or

recordkeeping.

These commentors misread the proposal which states that the sale of

non-exempt pseudoephedrine products in quantities below 24.0 grams

pseudoephedrine base applies to a single transaction. The phrase ``in a

single transaction'' was specifically included in Sec. 1309.28

(Exemption for retail distributors) which states that the sale for

personal use means the sale of below-threshold quantities in a single

transaction to an individual for legitimate medical use. The cumulative

threshold requirements for multiple transactions of pseudoephedrine

products within a calendar month will not apply to sales for personal

use. Therefore, the DEA reemphasizes that retail sales of personal use

quantities for legitimate medical use in a single transaction will not

require (1) The placement of these pseudoephedrine products behind the

counter, (2) maintenance of records for each transaction, or (3)

registration with the DEA. In order to further clarify that the

cumulative threshold requirements for multiple transactions of

pseudoephedrine products within a calendar month will not apply to

sales for personal use, Secs. 1309.28 and 1310.04 have been modified

accordingly. In addition, Sec. 1309.71 has been modified to reflect

that the requirement that certain drug products to be stocked behind a

counter where only employees have access does not apply to drugs

containing List I chemicals that are regulated pursuant to

Sec. 1310.01(f)(1)(iv)(A)(2).

(4) Several commentors stated that the NPRM does not present

sufficient evidence of the scope, duration and significance of OTC

pseudoephedrine diversion to justify the proposed action.

The NPRM addresses each of these issues and includes a thorough

discussion of the evolution and extent of the diversion of OTC drug

products as precursor material for the clandestine synthesis of

methamphetamine in the United States. The NPRM also describes actions

taken to counter such diversion and specifically outlines steps taken

by clandestine laboratory chemist to circumvent controls implemented at

the Federal level.

On October 31, 1995, the DEA published the NPRM in an attempt to

counter the growing problem of pseudoephedrine diversion and thereby

protect the public health and safety. This NPRM notes that (as of the

date of publication) 22 percent of the methamphetamine laboratories

seized in 1995 in the United States utilized pseudoephedrine as the

precursor material. In addition, the NPRM documents specific increases

in the percentage of clandestine methamphetamine laboratories using

pseudoephedrine as precursor material between 1994 and 1995.

Since publication of the NPRM, all indicators show clear evidence

that the scope of the diversion of pseudoephedrine for the clandestine

synthesis of methamphetamine continues to grow.

Current data indicates that the DEA was involved in the seizure of

327 methamphetamine laboratories in calendar year 1995 and that at

least 28 percent of these laboratories utilized pseudoephedrine as the

precursor material. Smuggling of bulk powder has not been shown to be a

significant source of pseudoephedrine for use at these laboratories and

investigative data indicates that essentially all pseudoephedrine

utilized involved the diversion of OTC pseudoephedrine products.

In regard to the significance of the problem, the adverse impact of

methamphetamine abuse in the United States is clear. The NPRM clearly

documents that the production of methamphetamine is the United States'

most significant clandestine laboratory problem.

Nationally, over 700 methamphetamine related deaths were documented

in the United States in 1994. In addition, there is substantial

evidence that the abuse of methamphetamine is associated with violent

behavior and criminal activity. Coupled with the public health and

safety consequences from the abuse of methamphetamine, the extensive

use of pseudoephedrine as precursor material (in 28 percent of 1995

seized laboratories) provides overwhelming support for the need to

control OTC pseudoephedrine products in a manner which prevents their

use as precursor material while permitting the unencumbered sale for

legitimate use. In proposing these pseudoephedrine regulations, the DEA

acted in a timely manner to counter a growing public health and safety

problem. The increase in seizures of methamphetamine laboratories

utilizing pseudoephedrine further justifies the proposed regulations.

(5) Two commentors stated that the exemption for retail

distributors arbitrarily discriminates against other legitimate

distributors who provide consumers with convenience and savings of

shopping at home (such as mail order distributors). One of these

commentors further stated that the registration exemption is being

provided to businesses (such as retail distributors) which have the

least ability to monitor sales. In contrast, however, several

commentors stated the converse. Specifically these commentors stated

that the DEA should restrict its efforts to target mail order

distribution and not impact retail distribution activity.

The issue pertaining to the exclusion of mail order activities from

the definition of retail distributor was addressed in the June 22,

1995, Federal Register Notice (60 FR 32447) which implemented

provisions of the DCDCA. As stated in that notice, it has been DEA's

experience that mail order distributors deal with both individuals and

businesses, the volume of product

[[Page 40984]]

sales can be quite large, and such firms are often less readily able to

positively identify their customers. In addition, investigations will

be significantly more complex and time consuming for a mail order

distributor than a retail distributor. It is therefore appropriate that

mail order activities not be provided the same waiver as retail

distributors.

In addition several commentors stated that the DEA has no evidence

of retail diversion and instead should target the source of the problem

such as mail order distributors. In response to these comments, the DEA

has documented both mail order and retail diversion of OTC

pseudoephedrine products for use in the clandestine production of

methamphetamine. In implementing these regulations the DEA is

specifically attempting to target both sources of the problem. In order

for such regulatory action to be effective, it should include

provisions which directly target the problem of indiscriminate

distribution of wholesale level quantities by retail, mail order and

wholesale distributors.

While all mail order and wholesale distributors will be subject to

the full extent of CSA chemical regulatory controls, specific

exemptions and waivers have been provided for retail distributors

selling personal use quantities. However, the regulation will affect

large sales of non-exempt pseudoephedrine products by retail

distributors. The following are several anecdotal examples of the

diversion of pseudoephedrine which illustrate the need for regulating

large purchases of pseudoephedrine that are not consistent with

personal use quantities at all levels of distribution.

The following are several examples of retail diversion: DEA has

documented that individuals have successfully solicited pharmacists to

order and sell excessive quantities of 60 mg pseudoephedrine OTC

tablets. The DEA was initially notified by a pharmacist employee of a

large chain pharmacy of an excessive pseudoephedrine purchase. DEA met

with the pharmacist and was informed that the purchaser initially

requested 300 pseudoephedrine 60 mg tablets but gradually increased his

request to 10,000 pseudoephedrine 60 mg tablets. The pharmacist

subsequently ordered and received the 10,000 tablets which the

individual picked up and paid for in cash. The individual then

requested a second order be placed for 50,000 pseudoephedrine 60 mg

tablets which the pharmacist ordered and received. When the individual

telephoned to inquire whether the order had been received, the

pharmacist further questioned the individual about the intended

purpose. After this phone conversation, however, the individual neither

picked up his order or called the pharmacy again. DEA then conducted a

random survey of other pharmacists in the nearby area for

pseudoephedrine purchases. DEA investigators found that the same

individual had also ordered excessive quantities from three other

retail pharmacies. The individual ordered 20,000 pseudoephedrine 60 mg

tablets, 100,000 tablets and 100,000 tablets respectively from these

other pharmacies. At each of the retail distributors, the same

individual had given different reasons for needing the pseudoephedrine.

In an unrelated incident, the DEA was notified of a large purchase

of pseudoephedrine tablets by a large chain pharmacy in California.

Further investigation revealed that an individual had taken a bottle of

pseudoephedrine off the shelf and requested that the pharmacy staff

place a large order for the product on his behalf. Upon consultation

with the pharmacist-in-charge, an order for 4,000 bottles was placed.

According to pharmacy records, the pharmacy had purchased a total of

550,000 pseudoephedrine tablets in five separate orders over a 3 month

period. The individual never provided any identification, address or

telephone number and always called the pharmacy to ask if the order had

come in. After placing several orders, the pharmacist learned from a

third party that pseudoephedrine tablets may be used to manufacture

methamphetamine. At that point the pharmacist informed the individual

that she would not order any more tablets because of possible misuse.

In a separate action, the DEA was notified by a large retail drug

chain that individuals had just purchased about $800 worth of

pseudoephedrine tablets from four of their pharmacies. A license plate

check revealed that the vehicle utilized at the time of purchase

belonged to the wife of a DEA fugitive and subject of a state

methamphetamine investigation. During the investigation, investigators

also learned of an unrelated purchase from another retail pharmacy

whereby an individual attempted to order and purchase 100,000

pseudoephedrine tablets for ``export purposes'' to the Orient.

In an another incident, the DEA received a call from loss

prevention personnel for a large chain drug store advising of two

incidents of pseudoephedrine diversion that day. The entire inventory

of pseudoephedrine product was purchased off the shelf of the pharmacy

through 3 purchases. The purchases were made in cash.

In a separate case, DEA served an administrative subpoena on a

pharmacy for records of receipt and sales of pseudoephedrine tablets.

When the subpoena was served, DEA investigators found the pharmacy

manager hiding in an adjacent room. After a consent to search, the DEA

seized 300,000 pseudoephedrine tablets and $65,000 cash at the

pharmacy. Agents later seized an additional $50,000 cash from a vehicle

belonging to an individual who came to the pharmacy to buy

pseudoephedrine from the pharmacy manager.

In mid 1995, two retail distributors were identified as selling

large quantities of OTC pseudoephedrine. During an 8 month period one

retailer sold 70,000 pounds of pseudoephedrine tablets and the second

retail distributor sold approximately 8,500 pounds of pseudoephedrine

tablets. As a result of an investigation into these excessive sales,

several employees and individuals associated with these establishments

were arrested by DEA.

In another instance, with the arrest of an individual for

possession and manufacture of methamphetamine, DEA investigators found

3 liters of methamphetamine and sufficient chemicals for the production

of approximately one kilogram of methamphetamine. In addition,

investigators found pseudoephedrine/antihistamine combination OTC

tablets (consisting of pseudoephedrine 60 mg and triprolidine 2.5 mg)

and receipts for the purchase of OTC pseudoephedrine tablets from a

local chain drug store. Later, investigators interviewed the drug store

manager and reviewed store cash register receipts which documented the

sale of pseudoephedrine combination OTC tablets.

The following are several examples which illustrate the magnitude

of mail order diversion:

In October of 1995, the DEA seized a large methamphetamine

laboratory utilizing pseudoephedrine capable of manufacturing 200

pounds of methamphetamine per month. Precursor material was obtained

through the mail order purchase of OTC pseudoephedrine tablets.

In a long term DEA methamphetamine investigation, DEA seized 7.5

million dosage units of OTC pseudoephedrine and 1.8 million OTC

ephedrine dosage units and other chemicals used in the manufacture of

methamphetamine. The OTC products used as precursor material were

obtained through mail order distributors. In the course of the

investigation over 7.8 million dollars

[[Page 40985]]

was seized from the trafficking organization.

In another investigation, after the undercover purchase of 20

million pseudoephedrine tablets from an OTC manufacturer and

distributor, DEA seized 25 metric tons of pseudoephedrine, ephedrine

and phenylpropanolamine. Five tractor trailer trucks were required to

remove the material to a secure storage facility. The company, which

dealt extensively in mail order distribution, has been identified as

purchasing 191 metric tons of pseudoephedrine and ephedrine between

January 1994 and May 1995.

The above examples of significant diversion illustrate the need for

regulation at all levels of distribution of non-personal use

quantities, whether it be wholesale, retail or mail order distribution.

(6) One commentor noted that agencies are required to prepare and

make available for public comment an initial regulatory flexibility

analysis which describes the impact of a proposed rule on small

entities. This commentor states that the NPRM is therefore deficient in

that it does not adequately set forth such an analysis. The commentor

did, however, recognize that this provision does not apply to instances

where the head of the agency certifies that the rule will not have

significant impact on a substantial number of small entities.

The NPRM documents the various provisions which were specifically

provided in order to minimize the impact on small businesses. These

provisions were the result of a reasoned analysis of the potential

impact of implementation of the full extent of CSA regulations on the

affected industry and small businesses in particular. In providing for

these special provisions, DEA gave special care and consideration to

industry concerns and given these provisions, ensured that these

regulations ``will not have significant impact on a substantial number

of small entities''.

As previously stated in the NPRM, the DEA met with and consulted

with industry representatives prior to proposing these regulations in

an effort to minimize any adverse impact. In addition, the NPRM

specifically details provisions designed to eliminate the adverse

impact on small businesses at the retail level. First, the DEA proposed

that retail distributors not be subject to registration. Secondly, the

DEA has limited controls to a specific group of products. Thirdly, the

NPRM proposed the establishment of a threshold of 24.0 grams

pseudoephedrine base and therefore would allow for the purchase and

sale of up to a 120 day supply of pseudoephedrine for personal

legitimate medical use, without the application of regulatory

requirements. The proposed threshold was subsequently raised to 48.0

grams in this final rule. Lastly, the NPRM specifies that the threshold

quantity applies only to a single transaction.

(7) One commentor suggested that small package sizes would be

enormously expensive to divert and implied that these products

therefore would not be cost effective sources of pseudoephedrine as

precursor material for the synthesis of methamphetamine. Prior to

proposing these regulations, however, the DEA reviewed the cost of

various brand name pseudoephedrine products in various package sizes

and formulations. The DEA undertook this examination for the specific

purpose of determining whether certain products should remain exempt

from the proposed regulations based solely on the fact that their use

in the synthesis of methamphetamine would not be financially

profitable. This review indicated that even the most expensive brand

name pseudoephedrine dosage form products (including the more expensive

syrups and products containing multiple active ingredients) would be

cost effective sources of precursor material.

(8) Several commentors stated that the DEA has not provided a

rationale for its selection of the group of drugs whose legal exemption

would be revoked. These commentors stated that the NPRM provides

insufficient scientific explanation as to why the exemption was removed

for certain products. One commentor challenged that its scientists

state that removal of pseudoephedrine in combination with

antihistamines, guaifenesin and dextromethorphan is at least as

difficult, if not more so, than analgesics and less efficient than from

liquids, syrup and soft gelatin capsules. The commentor further stated

that the DEA must consider whether the drug or group of drugs are

formulated in such a way that cannot be easily used in the illicit

production of controlled substances.

As stated in the NPRM, the DEA performed a review of the various

pseudoephedrine dosage forms and available combinations of ingredients

to determine which products are (1) formulated in such a way that the

product itself cannot be easily used in the illicit production of

methamphetamine; and (2) whether pseudoephedrine can be readily

recovered from the product. In making determinations as to which

product formulations should be subject to control, the DEA laboratory

system undertook a study which utilized different types of OTC

pseudoephedrine dosage forms and combinations of ingredients to see

which of these formulations were most easily used in the clandestine

synthesis of controlled substances using the procedures most commonly

utilized by clandestine chemists. In addition, the study assessed

whether pseudoephedrine could be readily extracted using clandestine

laboratory techniques. In making its conclusions regarding which

products and formulations should be regulated, the DEA considered,

among other information, which products and formulations required

modifications to normal clandestine manufacturing or extraction

procedures and therefore required a more extension knowledge of

chemistry. In response to comments that the DEA should elaborate

further on its studies to determine the simplicity with which products

may be converted to methamphetamine, the disclosure of such information

would only serve to educate clandestine laboratory operators as to how

to better produce methamphetamine and reveal which pseudoephedrine

formulations provide the easiest source of precursor material.

(9) One commentor questioned the basis for DEA's claim that certain

formulations and products can not be readily recovered. The commentor

stated that liquids would be easier to convert and that the DEA

provided no explanation as to why aspirin, acetaminophen or ibuprofen

combinations are less likely to be diverted for clandestine use. In

response to this comment, in attempting to manufacture methamphetamine

from liquid formulations and combination products having formulations

which contained an analgesic, DEA found that when a typical clandestine

laboratory procedure was utilized, it was necessary to modify the

manufacturing procedure in order to achieve acceptable results.

In determining which products should be subject to CSA chemical

regulatory controls, the DEA has taken a conservative approach. As

such, exemptions are being removed only for those products which did

not require procedural changes when a typical methamphetamine

clandestine manufacturing procedure was utilized. The exemptions are

being retained for all pseudoephedrine products which required changes

in these procedures.

(10) Several commentors stated that the NPRM would require training

of employees to recognize a threshold transaction. The DEA acknowledges

that retail distributors will need to provide instruction to their

personnel so that

[[Page 40986]]

they are able to recognize an above-threshold transaction. In

consultation with industry, the DEA has been informed that the most

common package sizes range from 10 to 60 solid dosage units per package

at the retail level. In proposing the establishment of the threshold of

24.0 grams pseudoephedrine base the DEA specifically ensured that such

common package sizes are not adversely impacted.

DEA believes that the identification of above-threshold

transactions will not be difficult, given package sizes routinely sold

at the retail level. For example, one commentor stated that the vast

majority of their brand name pseudoephedrine product is sold in package

sizes of 24 dosage units or less with each unit containing 30 mg or 60

mg pseudoephedrine hydrochloride. Such packages would only contain

between 0.6 grams and 1.2 grams pseudoephedrine base. An above-

threshold purchase of greater than 24.0 grams of pseudoephedrine base

contained in such products would be conspicuous and thereby difficult

to conceal. An individual would have to purchase more than 976 dosage

units of a 30 mg/dosage unit product. In the package size indicated,

this would involve the purchase of more than 40 packages of such a

product in a single transaction. For a 60 mg per dosage unit product

packaged in bottles of 24 tablets, an above-threshold purchase would

involve the purchase of over 488 dosage units in greater than 20

packages. Given the large size of the above transactions, it is not

unreasonable to expect that retail distributors should be able to

instruct personnel to recognize such conspicuous quantities in a single

transaction.

Several commentors stated that in determining whether a transaction

is above-threshold, retail distributors would have to differentiate

between exempt and non-exempt pseudoephedrine products. These

commentors stated that in the event that exempt and non-exempt

pseudoephedrine products are both purchased in a single transaction, it

will be difficult to determine whether the threshold has been exceeded.

In response to this comment, if both exempt and non-exempt

pseudoephedrine products are purchased in a single transaction, the

quantities of OTC cough-cold medication necessary to exceed the

pseudoephedrine threshold would be even larger and more conspicuous

than the quantities outlined above. The comment submitted by the

National Association of Chain Drug Stores (NACDS) mentioned point of

sale scanning as a possible way to monitor threshold quantities in a

single transaction.

While the DEA believes that such transactions at the proposed

threshold of 24.0 grams would be conspicuous and therefore easy to

identify, the DEA has decided that in an effort to further reduce any

potential burden on retailers, the threshold for pseudoephedrine will

be increased to 48.0 grams. This quantity is double the proposed

threshold. This would allow for the below-threshold purchase of 976

dosage units of a pseudoephedrine 60 mg product or 1953 dosage units of

a 30 mg product in a single transaction. Such transactions would be

sufficient for at least a 244 day supply of pseudoephedrine in a single

transaction at the maximum recommended FDA dosage.

Concerns regarding the difficulty in providing instruction to

employees to recognize a threshold transaction are therefore minimized

by the implementation of the larger threshold and the magnitude of an

above-threshold transaction. To further assist retailers in providing

instruction to employees, the DEA will make available for distribution

through industry associations, notices which provide further

clarification of which pseudoephedrine products are regulated and

guidance in recognizing a threshold transaction.

Given the large quantities of product necessary to exceed a

threshold of 48.0 grams, it is not unreasonable to expect that retail

distributors should be able to provide the rudimentary instruction

necessary to recognize such conspicuous quantities. Retail distributors

dealing only in quantities below these levels will not have to register

with DEA and will not have to maintain records of transactions.

Therefore, any impact on retail distributors is minimal

While the DEA has established the threshold at 48.0 grams

(pseudoephedrine base) to permit the unregulated purchase of up to a

244 day supply at the maximum FDA recommended dosage of 240 mg

pseudoephedrine HCl per day, the DEA is in no way encouraging consumers

to exceed or ignore the warnings contained on the labeling of these

pseudoephedrine products. This labeling, which is required by the FDA,

warns that ``if symptoms do not improve within 7 days or are

accompanied by a fever, consult a doctor''. In addition, some

pseudoephedrine products warn the consumer ``Do not take this product

for more than 7 days.'' Therefore, when the product is used in a manner

consistent with its labeling, the purchase of a threshold quantity of

48.0 grams, will far exceed a 244 day supply of pseudoephedrine for

personal legitimate medical use.

(11) Several commentors stated that before taking action against

OTC pseudoephedrine products, the DEA should first use the enforcement

tools such as registration requirements that Congress imposed under the

DCDCA. In response to this comment, the DCDCA amended 21 U.S.C. 822 and

21 U.S.C. 823 to require registration of handlers of List I chemicals.

However, the DCDCA stated that registration ``shall not be required for

the distribution of a drug product that is exempted under section

102(39)(A)(iv).'' Therefore, registration requirements implemented

under the DCDCA would not pertain to handlers of OTC pseudoephedrine

products lawfully marketed under the Federal Food, Drug and Cosmetic

Act. Since the DEA has already seen a shift toward the utilization of

OTC pseudoephedrine products in clandestine laboratories, the

registration of only bulk handlers of pseudoephedrine and ephedrine

products would have no direct beneficial impact on preventing the

diversion of these products.

(12) One commentor raised concerns that under the CSA chemical

regulatory provisions, records will have to be maintained for a period

of 4 years rather than a 2 year period. The commentor further states

that while normal business records are adequate to meet the CSA

regulatory requirements, the retention requirement will increase the

recordkeeping burden. In response to this comment, the 4 year

recordkeeping requirement for the chemical control provisions of the

CSA was legislated by Congress (21 U.S.C. 830) and therefore is not

within DEA's authority to change.

(13) One commentor requested a 45 day grace period allowing sales

of covered products pending DEA action on registration applications.

The commentor noted that, as written, the NPRM appears to prohibit

above-threshold pseudoephedrine sales between the date the rule is

finalized and the date registration is approved by DEA.

DEA agrees. In response to this comment, DEA has determined that

each person required to obtain a registration because of implementation

of this rule will be temporarily exempted from the registration

requirement until the person has made proper application and the

Administration has approved or denied such application, provided that

the

[[Page 40987]]

application has been submitted within 45 days following the effective

date of this regulation. (Section 1310.09 has been modified to reflect

this.) This exemption only applies to the registration requirement; all

other chemical control requirements set forth under the CSA will be in

full force and effect as of the effective date of this regulation.

(14) One commentor noted that its independent distributors do not

squarely meet the definition of ``retail distributors'' as defined as

sales directly to ``walk-in'' customers for personal use. This

commentor stated that most of their transactions are face-to-face but

not walk-in. The commentor requested that the definition of retail

distributor as set forth in Section 1309.02(g) be modified.

DEA agrees. Therefore, the DEA is modifying Secs. 1309.28 and

1309.02(f) to reflect that the term retail distributor means a

distributor whose List I chemical activities are restricted to the sale

of drug products that are regulated as List I chemicals pursuant to

Sec. 1310.01(f)(1)(iv), in face-to-face transactions directly to

individuals for personal use. The intent of this provision is for the

distributor to be in the physical presence of the individual who is

acquiring the pseudoephedrine for personal use.

In addition, the commentor noted that some distributions are from

one of their independent distributors to another of their independent

distributors. The commentor requested that these sales also be exempt

since they are primarily below-threshold. However, the DEA has

determined that these types of transactions do not meet the definition

of retail distributor since such transactions would be intended for

further distribution and would not be intended for personal use.

(15) One commentor requested clarification of the registration

requirement for pharmacies. This commentor stated that because

pharmacies are already registered, it could be implied that they would

be subject to recordkeeping and reporting requirements.

In response to this request, pharmacies that do not engage in

above-threshold transactions are treated the same as other retail

distributors. However, pharmacies that sell above-threshold quantities

in a single transaction will not meet the definition of retail

distributor and will be required to register with DEA. In order to

avoid the imposition of duplicative registration requirements on these

registrants, 21 CFR 1309.25 provides for an exemption from chemical

registration for controlled substance registrants. Although these

entities will not be required to obtain a separate chemical

registration, they will be required to comply with other chemical

regulatory requirements such as recordkeeping and reporting

requirements. Therefore, these pharmacies which sell above-threshold

quantities of regulated pseudoephedrine products will be required to

maintain a record of each transaction which exceeds the threshold in a

single transaction and report any suspicious regulated transactions to

the DEA.

(16) Two commentors inquired whether the exemption for their

specific pseudoephedrine products could be reinstated if the products

were modified in such a way that prevented their use as precursor

material. In response to this comment, the DCDCA includes specific

provisions for reinstatement of exemptions for particular drug products

(21 U.S.C. 814). The DCDCA provides that upon application by a

manufacturer of a particular drug product that has been removed from

exemption, the exemption shall be reinstated with respect to the

particular drug product if it is determined to be manufactured and

distributed in a manner that prevents diversion. The DCDCA further

states that factors to be considered shall include (1) the package

sizes and manner of packaging of the drug product; (2) the manner of

distribution and advertising of the drug product; (3) evidence of

diversion of the drug product; (4) any actions taken by the

manufacturer to prevent diversion of the drug product; and (5) such

other factors as are relevant to and consistent with the public health

and safety.

One commentor raised concerns regarding the limitation that only

manufacturers may petition for reinstatement of the regulatory

exemption of a specific product. This commentor stated that the

regulations should be amended to allow distributors of private-brand

products or any interested party to submit applications for

reinstatement of exemption. In response to this request, please note

that this provision was legislated by Congress under the DCDCA (21

U.S.C. 814) and specifies that ``on application by a manufacturer of a

particular drug product'' the exemption may be reinstated if the

particular drug product is manufactured or distributed in a manner that

prevents diversion. Any such change would require Congressional

legislation.

(17) Two commentors requested a hearing on the proposal pursuant to

21 U.S.C. 875. In response to these requests, unlike other rulemaking

conducted pursuant to the CSA, the present rulemaking presents no

requirement that the rule be made on the record after opportunity for a

hearing. For example, 21 U.S.C. 811(a) requires the opportunity for a

hearing whenever there is a proposed rescheduling of controlled

substances. In addition, 21 U.S.C. 875 identifies general powers

available to the DEA when exercising its authority under the CSA. Thus,

21 U.S.C. 875 complements existing hearing provisions under the CSA

rather than conferring independent hearing authority. In any event, the

DEA believes that the notice and comment conducted pursuant to this

rulemaking enabled interested parties to provide meaningful comment on

the final rule.

(18) One commentor stated that the rule is a significant regulatory

action and should be reviewed by the Office of Management and Budget.

This commentor also noted that the rule could have an annual effect on

the economy of $100 million or more.

As outlined above, these regulations go to great lengths to avoid

impacting retail distribution of these OTC products. Since the vast

majority of distributors who handle these products will not need to

extremely small. This rule is therefore not a significant regulatory

action.

Final Rule

After careful consideration of each of the above comments, this

regulation is finalized as follows:

Removal of Exemption

21 U.S.C. 814(a) provides that the Attorney General shall remove

from exemption under 21 U.S.C. 802(39)(A)(iv) and drug or group of

drugs that the Attorney General finds is being diverted to obtain a

listed chemical for use in the illicit production of a controlled

substance. 21 U.S.C. 814(b) further provides that in removing the

exemption for a drug or group of drugs, the Attorney General shall

consider (1) the scope, duration, and significance of the diversion,

(2) whether the drug or group of drugs is formulated in such a way that

it cannot be easily used in the illicit production of a controlled

substance and (3) whether the listed chemical can be readily recovered

from the drug or group of drugs.

Pseudoephedrine is available in a variety of dosage forms either as

single entity products or in combination with one or more other active

medicinal ingredients. While the majority of OTC pseudoephedrine

products currently used for the illicit production of

[[Page 40988]]

methamphetamine are single entity products, combination products have

been identified at clandestine laboratories. The DEA has reviewed the

various pseudoephedrine dosage forms and available combinations of

ingredients. Some of these products are formulated in such a way that

the product itself can be used in the illicit production of

methamphetamine; others are formulated in such a way that

pseudoephedrine can be readily recovered from the product; and some of

these products are formulated in such a way that the manufacture of

methamphetamine is impeded. Based on this analysis, the DEA has

determined that OTC solid dosage form products (i.e. tablets, capsules

and powder packets) lawfully marketed under the Federal Food, Drug, and

Cosmetic Act and which contain pseudoephedrine in combination with

acetaminophen, aspirin or ibuprofen are formulated in such a way that

pseudoephedrine cannot be readily recovered and these products are not

easily used as precursors for the illicit production of

methamphetamine. In addition, the DEA has determined that OTC liquids,

syrups and soft gelatin capsules, which are lawfully marketed under the

Federal Food, Drug, and Cosmetic Act and which contain pseudoephedrine

either as the sole active ingredient or in combination with other

active ingredients, are formulated in such a way that the

pseudoephedrine cannot be readily recovered and the products cannot be

easily used in the illicit production of methamphetamine.

Thus the DEA is removing the exemption under 21 CFR

1310.01(f)(1)(iv) and 21 CFR 1313.02(d)(1)(iv) for OTC solid dosage

form pseudoephedrine products (i.e. tablets, capsules and powder

packets) lawfully marketed under the Federal Food, Drug, and Cosmetic

Act, which do not contain therapeutically significant quantities of

acetaminophen, aspirin or ibuprofen. These products, which include

tablets, capsules and powder packets containing pseudoephedrine as the

sole active ingredient or in combination with one or more active

ingredients such as antihistamines, guaifenesin or dextromethorphan,

will be subject to the regulatory requirements of the CSA.

For purposes of this paragraph, the term ``therapeutically

significant quantities'' shall apply if the product formulation (i.e.

the qualitative and quantitative composition of active ingredients

within the product) is listed in current editions of the American

Pharmaceutical Association (APhA) Handbook of NonPrescription Drugs;

Drug Facts and Comparisons (published by Wolters Kluwer Company); or

USP DI (published by the authority of the United States Pharmacopeial

Convention, Inc.). For drug products having a formulation not found in

the above compendiums, the DEA Administrator shall determine, pursuant

to a written request as specified in Section 1310.14, whether the

active medicinal ingredients are present in quantities considered

therapeutically significant for purposes of this paragraph.

The exemption provided under 21 CFR 1310.01(f)(1)(iv) and 21 CFR

1313.02(d)(1)(iv) will remain for liquids, syrups, and soft gelatin

capsules containing pseudoephedrine (regardless of formulation) and any

type of solid dosage form product which contains pseudoephedrine in

combination with therapeutically significant quantities of either

acetaminophen, aspirin or ibuprofen provided that the product is

lawfully marketed under the Federal Food, Drug, and Cosmetic Act. In

addition, the final regulations allow pseudoephedrine prescription

products, regardless of the product formulation, to remain exempt from

the final regulations, given existing distribution and dispensing

requirements already imposed under the Federal Food, Drug and Cosmetic

Act.

While certain pseudoephedrine products remain exempt from the

regulatory controls of the CSA, all pharmaceutical products containing

pseudoephedrine are List I chemicals, and as such, are subject to the

criminal provisions of the CSA. Specifically, 21 U.S.C. 841(d) provides

that any person who possesses or distributes any listed chemical

knowing, or having reasonable cause to believe that it will be used to

manufacture a controlled substance, shall be fined in accordance with

Title 18, or imprisoned not more than 10 years, or both.

Pursuant to 21 U.S.C. 814(c), the DEA has considered the evidence

of diversion of the above listed pseudoephedrine products, the pattern

of diversion of ephedrine products, including combination products and

other relevant data, and has determined that the affected groups of

pseudoephedrine products is limited to that currently necessary to

prevent the diversion of pseudoephedrine products to illicit

methamphetamine laboratories.

Revision of Threshold

The threshold for pseudoephedrine is being changed from 1.0

kilogram to 48.0 grams pseudoephedrine base for domestic, import and

export transactions. Even if the exemption for certain OTC

pseudoephedrine products is eliminated, a 1.0 kilogram threshold is not

adequate to prevent the significant diversion of these pseudoephedrine

products to clandestine laboratories. The threshold of 1.0 kilogram of

pseudoephedrine base in equivalent to greater than 20,000

pseudoephedrine HCl 60 mg dosage units. Therefore the DEA is reducing

the threshold for pseudoephedrine. In order to ensure that OTC

pseudoephedrine products remain available to those individuals who

utilize these decongestants for legitimate medical purposes, the DEA is

establishing the threshold for pseudoephedrine at a level which will

have no impact on personal use. As such, individuals who purchase

below-threshold quantities intended for legitimate personal medical

use, and retailers who sell below-threshold quantities for use by

individuals for legitimate personal medical use, will not be adversely

impacted by these regulations.

The FDA has established a labeling requirement which sets the

maximum adult daily dosage of pseudoephedrine at 60 mg every 6 hours or

240 mg per day. A 244 day supply of pseudoephedrine at the maximum

daily recommended dose of 240 mg pseudoephedrine hydrochloride per day

is equivalent to 58.56 grams of pseudoephedrine hydrochloride or 47.97

grams pseudoephedrine base. Therefore the DEA is establishing a

threshold of 48.0 grams pseudoephedrine base. Such a threshold will

allow the purchase and sale of up to a 244 day supply of

pseudoephedrine for personal legitimate medical use at the maximum FDA

recommended dosage, without the application of regulatory requirements.

This will allow continued access to these products for legitimate use.

Waiver of Registration

In an effort to ensure the continued availability of

pseudoephedrine products for legitimate personal use at the retail

level, the DEA is providing a waiver from registration for any retail

distributor of regulated pseudoephedrine products. Therefore retail

distributors (defined under 21 CFR 1309.02) of regulated

pseudoephedrine products will not be required to obtain a DEA

registration to distribute personal use quantities of OTC

pseudoephedrine to individuals for legitimate medical use. The

authority for providing a waiver is clearly set forth in 21 U.S.C.

Section 822(d) whereby ``The Attorney General may, by regulation, waive

the requirement for registration of certain manufacturers,

[[Page 40989]]

distributors, or dispensers if he finds it consistent with the public

health and safety.''

As discussed, it is estimated that there are approximately 750,000

retail distributors of pseudoephedrine in the United States. Such a

waiver will benefit the vast majority of these distributors. Firms

engaging in above-threshold transactions of non-exempt pseudoephedrine

products, however, will not be considered retail distributors.

Therefore they will be required to obtain a DEA registration as a

distributor, maintain records as specified in 21 CFR 1310.04 and report

suspicious regulated transactions as specified in 21 CFR 1310.05

notification requirement. In addition, all importers, exporters and

other types of distributors (such as mail order distributors) of non-

exempt pseudoephedrine products will be required to register with the

DEA and will be subject to the full regulatory provisions of the CSA

Act and the Controlled Substances Import and Export Act.

Conclusion

The clandestine manufacture and abuse of methamphetamine are

serious national public health problems which require Federal action.

Companies operating on the fringe of legitimate commerce are supplying

these clandestine laboratories with needed precursor material such as

ephedrine and pseudoephedrine. In an effort to minimize the impact of

the final regulations on the legitimate industry, the DEA has examined

various options available.

The DEA is aware of the large scale legitimate use of OTC

pseudoephedrine products and their widespread distribution at retail

outlets. However, the DEA believes that the registration,

recordkeeping, reporting and notification requirements that have been

successfully used to limit the diversion of other chemicals to

clandestine laboratories are needed to control this problem.

The Attorney General has delegated authority under the CSA and all

subsequent amendments to the CSA to the Administrator of the DEA (28

CFR 0.100). The Administrator, in turn, has redelegated this authority

to the Deputy Administrator pursuant to 28 CFR 0.104.

The Deputy Administrator has reviewed this regulation and by

approving it certifies that while this regulation will necessitate that

retail distributors of regulated pseudoephedrine products instruct

employees to recognize a threshold transaction, the level of

instruction needed is minimal, given the magnitude of the quantities

needed to exceed the threshold in a single transaction. In addition,

the vast majority of retail distributors deal only in quantities far

below the threshold in a single transaction and therefore will not need

to register with the DEA and will not need to maintain records.

Therefore the Deputy Administrator certifies that this regulation will

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

entities.

The Drug Enforcement Administration has determined that this rule

is not a ``significant regulatory action'' under Executive Order 12866

Section 3(f) and the Office of Management and Budget (OMB) has waived

its review under section 6(a)(3)(A) of the order.

This final action has been analyzed in accordance with the

principles and criteria in Executive Order 12612, and it has been

determined that the final rule does not have sufficient federalism

implications to warrant the preparation of a Federalism Assessment.

List of Subjects

21 CFR Part 1309

Administrative practice and procedure, Drug traffic control, List I

and List II chemicals, Security measures.

21 CFR Part 1310

Drug traffic control, List I and II chemicals, Reporting and

recordkeeping requirements.

21 CFR Part 1313

Drug Traffic Control, Exports, Imports, List I and II chemicals,

Transshipment and in-transit shipments.

For reasons as set out above, 21 CFR Parts 1309, 1310 and 1313 are

amended as follows:

PART 1309--[AMENDED]

1. The authority citation for part 1309 continues to read as

follows:

Authority: 21 U.S.C. 821, 822, 823, 824, 830, 871(b), 875, 877,

958.

2. Section 1309.02 is amended by revising paragraph (g) to read as

follows:

* * * * *

(f) The term retail distributor means a distributor whose List I

chemical activities are restricted to the sale of drug products that

are regulated as List I chemicals pursuant to Section 1310.01(f)(1)(iv)

of this chapter, in face-to-face transactions directly to individuals

for personal use. For purposes of Sec. 1309.28, sale for personal use

means the sale of below threshold quantities in a single transaction to

an individual for legitimate medical use.

3. Section 1309.28 is added to read as follows:

Sec. 1309.28 Exemption of retail distributors of certain

pseudoephedrine products.

The requirement of registration is waived for any retail

distributor, for the distribution of any product containing

pseudoephedrine that is regulated pursuant to

Sec. 1310.01(f)(1)(iv)(A)(2) of this chapter. The term retail

distributor, as defined in Sec. 1309.02(f), means a distributor whose

List I chemical activities are restricted to the sale of drug products

that are regulated as List I chemicals pursuant to

Sec. 1310.01(f)(1)(iv) of this chapter, in face-to-face transactions

directly to individuals for personal use. For purposes of this

paragraph, sale for personal use means the sale of below-threshold

quantities in a single transaction to an individual for legitimate

medical use. The cumulative threshold requirements for multiple

transactions within a calendar month will not apply to sales for

personal use of any product containing pseudoephedrine that is

regulated pursuant to Sec. 1310.01(f)(1)(iv)(A)(2) of this chapter.

(The threshold of 48.0 grams pseudoephedrine base is equivalent to 976

pseudoephedrine hydrochloride 60 mg dosage units.)

4. Section 1309.71 is amended by revising paragraph (a)(2) to read

as follows:

Sec. 1309.71 General security requirements.

* * * * *

(a) * * *

(2) In retail settings open to the public where drugs containing

List I chemicals that are regulated pursuant to

Sec. 1310.01(f)(1)(iv)(A)(1) of this chapter are distributed, such

drugs will be stocked behind a counter where only employees have

access. This requirement does not apply to drugs containing List I

chemicals that are regulated pursuant to Sec. 1310.01(f)(1)(iv)(A)(2)

of this chapter.

* * * * *

21 CFR part 1310 is amended as follows:

PART 1310--[AMENDED]

1. The authority citation for part 1310 continues to read as

follows:

Authority: 21 U.S.C. 802, 830, 871(b).

2. Section 1310.01 is amended by revising paragraph (f)(1)(iv)(A)

to read as follows:

[[Page 40990]]

Sec. 1310.01 Definitions.

* * * * *

(f) * * *

(1) * * *

(iv) * * *

(A)(1) The drug contains ephedrine or its salts, optical isomers,

or salts of optical isomers as the only active medicinal ingredient or

contains ephedrine or its salts, optical isomers, or salts of optical

isomers and therapeutically insignificant quantities of another active

medicinal ingredient. For purposes of this paragraph, the term

``therapeutically insignificant quantities'' shall apply if the product

formulation (i.e. the qualitative and quantitative composition of

active ingredients within the product) is not listed in current

editions of the American Pharmaceutical Association (APhA) Handbook of

NonPrescription Drugs; Drug Facts and Comparisons (published by Wolters

Kluwer Company); or USP DI (published by the authority of the United

States Pharmacopeial Convention, Inc.); or the product is not listed in

Section 1310.15 as an exempt drug product. For drug products having

formulations not found in the above compendiums, the Administrator

shall determine, pursuant to a written request as specified in Section

1310.14, whether the active medicinal ingredients are present in

quantities considered therapeutically significant for purposes of this

paragraph; or

(2) The drug is an over-the-counter (OTC) solid dosage form product

(tablet, capsule or powder packet) which contains pseudoephedrine or

its salts, optical isomers, or salts of optical isomers but does not

contain either acetaminophen, aspirin or ibuprofen in therapeutically

significant quantities. (This provision applies only to OTC

pseudoephedrine products and does not include those pseudoephedrine

products dispensed only pursuant to a prescription.) For purposes of

this paragraph, the quantities of either acetaminophen, aspirin or

ibuprofen present in a pseudoephedrine drug product shall be considered

to be present in ``therapeutically significant quantities'' if the

product formulation (i.e. the qualitative and quantitative composition

of active ingredients within the product) is listed in current editions

of the American Pharmaceutical Association (APhA) Handbook of

NonPrescription Drugs; Drug Facts and Comparisons (published by Wolters

Kluwer Company); or USP DI (published by the authority of the United

States Pharmacopeial Convention, Inc.); or the product is listed in

Sec. 1310.15 as an exempt drug product. For drug products having a

formulation not found in the above compendiums, the Administrator shall

determine, pursuant to a written request as specified in Sec. 1310.14,

whether the active medicinal ingredients (acetaminophen, aspirin or

ibuprofen) are present in quantities considered therapeutically

significant for purposes of this paragraph; or

* * * * *

3. Section 1310.04 is amended by revising the introductory text in

paragraph (f) and paragraph (f)(1)(x) to read as follows:

Sec. 1310.04 Maintenance of records.

* * * * *

(f) Except as provided in Sec. 1309.28 of this chapter for sales

for personal use, for those listed chemicals for which thresholds have

been established, the quantitative threshold or the cumulative amount

for multiple transactions within a calendar month to be utilized in

determining whether a receipt, sale, importation, or exportation is a

regulated transaction is as follows:

(1) List I Chemicals:

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

Chemical Threshold by base weight

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

(x) Pseudoephedrine, its salts, optical 48 grams.

isomers and salts of optical isomers.

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

* * * * *

4. Section 1310.09 is revised to read as follows:

Sec. 1310.09 Temporary exemption from registration.

Each person required by section 3(b) of the Domestic Chemical

Diversion Control Act of 1993 (Pub. L. 103-200, effective April 16,

1994), to obtain a registration to manufacture, distribute, import, or

export a list I chemical (other than those list I chemicals exempted

under Sec. 1310.01(f)(1)(iv)), is temporarily exempted from the

registration requirement. The registration exemption will remain in

effect for each person until the person has made proper application for

registration and the Administration has approved or denied such

application, provided that the application has been submitted within 45

days following the effective date of the regulations in part 1309

implementing the Domestic Chemical Diversion Control Act of 1993. In

addition, each person required to obtain a registration to manufacture,

distribute, import, or export a drug or group of drugs removed from

exemption under Sec. 1310.01(f)(1)(iv) is also temporarily exempted

from the registration requirement. The registration exemption will

remain in effect for each person until the person has made proper

application for registration and the Administration has approved or

denied such application, provided that the application has been

submitted within 45 days following the effective date of the regulation

which eliminates the exemption under Sec. 1310.01(f)(1)(iv). These

registration exemptions apply only to registration; all other chemical

control requirements set forth in the Domestic Chemical Diversion

Control Act of 1993 and in parts 1310 and 1313 of this chapter remain

in full force and effect.

5. Section 1310.14 is amended by revising the heading and by

revising paragraph (a) to read as follows:

Sec. 1310.14 Exemption of certain ephedrine or pseudoephedrine

combination drug products.

(a) Any manufacturer of a drug product containing ephedrine in

combination with another active medicinal ingredient, the product

formulation of which is not listed in the compendiums set forth in

Sec. 1310.01(f)(1)(iv)(A)(1), or any manufacturer of a drug product

containing pseudoephedrine in combination with acetaminophen, aspirin

or ibuprofen, the product formulation of which is not listed in the

compendiums set forth in Sec. 1310.01(f)(1)(iv)(A)(2), may request that

the Administrator exempt the product as one which contains ephedrine

together with therapeutically significant quantities of the other

active medicinal ingredients or pseudoephedrine in combination with

therapeutically significant quantities of acetaminophen, aspirin or

ibuprofen.

* * * * *

6. Section 1310.15 is amended by revising the heading, by revising

paragraph (a), and by revising paragraph (d) to read as follows:

Sec. 1310.15 Exempt combination drug products containing ephedrine or

pseudoephedrine.

(a) The drug products containing ephedrine in combination with

therapeutically significant quantities of another active medicinal

ingredient, or pseudoephedrine in combination with therapeutically

significant quantities of acetaminophen, aspirin, or ibuprofen; listed

in paragraph (d) of this section, have been exempted by the

Administrator from application of sections 302, 303, 310, 1007, and

1008 of the Act (21 U.S.C. 822-3, 830, and 957-8) to the extent

described in

[[Page 40991]]

paragraphs (b), (c), and (d) of this section. * * *

(d) In addition to the drug products listed in the compendium set

forth in Secs. 1310.01(f)(1)(iv)(A)(1) and 1310.01(f)(1)(iv)(A)(2), the

following drug products, in the form and quantity listed in the

application submitted (indicated as the ``date'') are designated as

exempt drug products for the purposes set forth in this section:

Exempt Drug Products Containing Ephedrine in Combination With Therapeutically Significant Quantities of Another

Active Medicinal Ingredient and Exempt Drug Products Containing Pseudoephedrine in Combination With

Therapeutically Significant Quantities of Acetaminophen, Aspirin or Ibuprofen

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Supplier Product name Form Date

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[Reserved]........................... ....................... ....................... .......................

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21 CFR part 1313 is amended as follows:

PART 1313--[AMENDED]

1. The authority citation for part 1313 continues to read as

follows:

Authority: 21 U.S.C. 802, 830, 871(b), 971.

2. Section 1313.02 is amended by revising paragraph (d)(1)(iv)(A)

to read as follows:

Sec. 1313.02 Definitions.

* * * * *

(d) * * *

(1) * * *

(iv) * * *

(A)(1) The drug contains ephedrine or its salts, optical isomers,

or salts of optical isomers as the only active medicinal ingredient or

contains ephedrine or its salts, optical isomers, or salts of optical

isomers and therapeutically insignificant quantities of another active

medicinal ingredient. For purposes of this paragraph, the term

``therapeutically insignificant quantities'' shall apply if the product

formulation (i.e. the qualitative and quanitative composition of active

ingredients within the product) is not listed in current editions of

the American Pharmaceutical Association (APhA) Handbook of

NonPrescription Drugs; Drug Facts and Comparisons (published by Wolters

Kluwer Company); or USP DI (published by the authority of the United

States Pharmacopeial Convention, Inc.); or the product is not listed in

Sec. 1310.15 as an exempt drug product. For drug products having

formulations not found in the above compendiums, the Administrator

shall determine, pursuant to a written request as specified in Section

1310.14, whether the active medicinal ingredients are present in

quantities considered therapeutically significant for purposes of this

paragraph; or

(2) The drug is an over-the-counter (OTC) solid dosage form product

(tablet, capsule or powder packet) which contains pseudoephedrine or

its salts, optical isomers, or salts of optical isomers, but does not

contain either acetaminophen, aspirin or ibuprofen in therapeutically

significant quantities. (This provision applies only to OTC

pseudoephedrine products and does not include those pseudoephedrine

products dispensed only pursuant to a prescription.) For purposes of

this paragraph, the quantities of either acetaminophen, aspirin or

ibuprofen present in a pseudoephedrine drug product shall be considered

to be present in ``therapeutically significant quantities'' if the

product formulation (i.e. the qualitative and quantitative composition

of the active ingredients within the product) is listed in current