Firms using ephedrine, pseudoephedrine, and phenylpropanolamine in drug products must apply by April 1 each year for the following year's manufacturing quotas, under a July 10 interim final rule to implement the Combat Meth Act.

In a Federal Register ¹ notice, the Drug Enforcement Administration says under the act it "must utilize all tools at its disposal" to control ephedrine, PSE and PPA imports and the manufacturing of products made with those chemicals.

The urgency of implementing Combat Meth regulations authorizes making the interim final rule effectively immediately, without the 30-day period for comment required under the Administrative Procedure Act, DEA says.

DEA published rules in 2006 to implement Combat Meth provisions requiring behind-the-counter sales and limiting retail purchases of PSE-containing products (² [A#05140420003], p. 5).

The latest rule implements the act's provisions that require DEA to assess U.S. drug manufacturing firms' annual needs for ephedrine, PSE and PPA and to limit production of both Rx and OTC drugs containing the substances by establishing manufacturing quotas for individual firms.

DEA says it estimates a firm's annual cost for the quota application process to be $35,880, but expects "the larger cost of this rule" to come from the constraint on OTC product sales caused by the quotas.

Similarly, the agency says in setting manufacturing quotas, it will "consider the likelihood that OTC sales ... may be reduced" by retail sales restrictions. In addition, the quota levels will be affected by DEA's assessment of "the quantity of the chemicals now being diverted to illicit use."

According to the rule, the quota for a firm already manufacturing products containing the substances will be based on "100 percent of the estimated net disposal of that applicant for the next calendar year."

The rule defines net disposal as total amount of ephedrine, PSE and PPA a firm distributes, uses to make another chemical or product, otherwise disposes of or receives in returns from manufacturing and distribution customers.

Quotas may be adjusted by the amount necessary to increase or reduce the estimated inventory of an applicant on Dec. 31 of the current year to the estimated inventory allowance for the next year.

For firms that are not manufacturing the products in the year before a quota is set, quotas will be "reasonably estimated" of their 100 percent net disposal, with adjustments allowed by the amount necessary to provide applicants' estimated inventory allowance for the next year.

All firms' quotas may be adjusted by other factors, such as changes in an applicant's rates of net disposal, or changes in national rates, and the availability of raw materials for use in manufacturing and for inventory purposes, according to the rule.

DEA says the rule applies to individuals or firms registered to manufacture - including repackaging or re-labeling - or to import ephedrine, PSE and PPA as bulk chemicals, or to import prescription and OTC products containing the chemicals for lawful U.S. marketing and distribution under the Food, Drug and Cosmetic Act.

DEA Notes Differences In Business Types

The Consumer Healthcare Products Association stresses the importance of the distinctions DEA makes in the different types of operations that manufacture drugs containing the chemicals and in how the rule will affect quotas for the different types.

"DEA has clearly distinguished between manufacturers of OTC medicines sold through conventional outlets such as drug stores, grocery stores, mass merchandisers and electronic mail order, and firms that sell product almost exclusively through non-conventional outlets, such as independent convenience stores, liquor stores, etc.," David Spangler, CHPA's senior vice president for policy and international affairs, said in an e-mail.

"CHPA members are among those selling through conventional outlets, where DEA does not anticipate a significant economic impact. We agree," he added.

"We applaud DEA for emphasizing its experience to combat diversion of products sold almost exclusively through non-conventional outlets," Spangler said.

According to the rule, "Importers and manufacturers of OTC products that are sold through conventional outlets are likely to receive the quotas requested adjusted only to account for general estimates of diversion and declines in demand."

However, the agency expects quotas for firms selling OTC products with the chemicals through non-conventional outlets "will be more severely affected." DEA says "products sold almost exclusively through non-conventional outlets are far more likely to be diverted in substantial quantities."

The agency says it has determined some non-conventional outlets sell products in quantities "20 to 40 times what such stores would be expected to sell to meet legitimate needs." Many of this type of manufacturer have marketed products in packages that are no longer legal for retail sales because they contain more than 3.6 grams of PSE, according to DEA.

Under the rule, DEA also will set annual quotas for the single U.S. manufacturer of bulk PSE (Novus Fine Chemicals) and importers or manufacturers of prescription products containing the three chemicals.

Assessing Industry-Wide Needs

DEA will estimate annually the U.S. industry's needs for ephedrine, PSE and PPA by assessing the total net disposal of the chemicals during the current and two preceding years; trends in the national rate of net disposal of each chemical; total actual, or estimated inventories of the chemicals and of all substances manufactured from them; trends in inventory accumulation; and projected demand for each chemical as indicated by procurement and import quotas requested.

Other factors will affect the determination, including changes in the currently accepted medical use of the chemicals, the physical and economic availability of raw materials for use in manufacturing and for inventory purposes, yield and stability problems, potential disruptions to production and unforeseen emergencies such as floods and fires.

By May 1 each year, the agency will publish a notice of its assessment in the Federal Register and mail a copy to each person or firm registered to manufacture or import the chemicals. A comment period will be allowed before DEA adopts its assessment and sets quotas, but the agency is not required to conduct a public hearing on issues raised by the comments.

- Malcolm Spicer (m.spicer@elsevier.com)

Combat Meth Pseudoephedrine Manufacturing Quota Rule Effective – DEA

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