ECONOMIC IMPACT ANALYSIS

Of

Final Rule on the Disposal of Controlled Substances, DEA-316

Drug Enforcement Administration

U.S. Department of Justice

June 2014
Table of Contents

CHAPTER 1: INTRODUCTION...................................................................................................................................1

CHAPTER 2: REGULATORY ANALYSES INVESTIGATED ..................................................................................3

2.1 EXECUTIVE ORDERS 12866 AND 13563..............................................................................................................3

2.2 REGULATORY FLEXIBILITY ACT..........................................................................................................................3

2.3 UNFUNDED MANDATES REFORM ACT................................................................................................................4

2.4 CONGRESSIONAL REVIEW ACT...........................................................................................................................4

CHAPTER 3: SCOPE OF ANALYSIS..........................................................................................................................6

CHAPTER 4: REGISTRANT AND NON-REGISTRANT DISPOSAL: REGULATORY ALTERNATIVES

CONSIDERED..................................................................................................................................................9

4.1 NON-REGISTRANT DISPOSAL..............................................................................................................................10

4.1.1 Single Collection .....................................................................................................................................10

4.1.2 Open Collection.......................................................................................................................................11

4.1.3 Multiple Collection (Selected Methodology)..........................................................................................12

4.2 REGISTRANT DISPOSAL ......................................................................................................................................13

4.2.1 Retain Existing Regulations....................................................................................................................13

4.2.2 Establish Consistent National Standards (Selected Methodology)..........................................................13

4.3 REVERSE DISTRIBUTORS ....................................................................................................................................14

4.3.1 On-site Requirement................................................................................................................................15

4.3.2 Prompt Requirement................................................................................................................................16

4.3.3 No Requirement ......................................................................................................................................16

4.3.4 No Later Than 30 Calendar Day Requirement (Selected Methodology).................................................17

CHAPTER 5: ANTICIPATED ECONOMIC IMPACT OF MANDATORY PORTIONS OF REGULATORY 

ACTION: REGISTRANT DISPOSAL............................................................................................................18

5.1 GENERAL RELATIONSHIP BETWEEN REGISTRATIONS, ENTITIES, AND SMALL ENTITIES .....................................18

5.2 ENTITIES AFFECTED BY MANDATORY PORTIONS OF THE RULE..........................................................................20

5.2.1 Number of Registrations Affected by the Mandatory Portions of the Rule.............................................20

5.2.2 Number of Entities and Small Entities Affected by the Mandatory Portions of the Rule .......................21

5.3 QUANTITATIVE ANALYSIS OF MANDATORY PORTIONS ......................................................................................21

5.3.1 Registrant Disposal: Impact on Reverse Distributors that Destroy Controlled Substances....................21

5.3.2 Reverse Distributor Additional Destruction Costs ..................................................................................25

5.3.3 Reverse Distributor Additional Transport Costs .....................................................................................26

5.3.4 Reverse Distributor Additional Labor Costs ...........................................................................................27

5.3.5 Reverse Distributor Additional Travel Costs: Per Diem and Vehicle Cost............................................28

5.3.6 Manufacturer Additional Labor Cost ......................................................................................................29

5.3.7 Distributor Additional Labor Cost...........................................................................................................30

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5.3.8 Combined Costs/Annual Cost of the Mandatory Portions of the Rule ....................................................32

CHAPTER 6: ESTIMATED ECONOMIC IMPACT OF VOLUNTARY PARTICIPATION IN REGULATORY 

ACTIVITY: NON-REGISTRANT DISPOSAL ..............................................................................................33

6.1 NUMBER OF ENTITIES AND SMALL ENTITIES AFFECTED.....................................................................................34

6.2 SCENARIO 1: RETAIL PHARMACY COLLECTION RECEPTACLE............................................................................35

6.2.1 Retail Pharmacy Participation Rate.........................................................................................................37

6.2.2 Cost to Pharmacies at Low Participation Rate ........................................................................................38

6.2.3 Cost to Pharmacies at Medium Participation Rate ..................................................................................40

6.2.4 Cost to Pharmacies at High Participation Rate........................................................................................41

6.3 SCENARIO 2: HOSPITAL/CLINIC WITH ON-SITE PHARMACY COLLECTION RECEPTACLE .....................................43

6.4 SCENARIO 3: LONG-TERM CARE FACILITY COLLECTION RECEPTACLE .............................................................45

6.4.1 Scenario 3A: Long-Term Care Facility in an Urban or Suburban Location...........................................46

6.4.2 Scenario 3B: Long-Term Care Facility in a Rural Location...................................................................48

6.4.3 Estimated Cost of Long-Term Care Facility Collection Receptacle........................................................50

6.5 SCENARIO 4: MANUFACTURER COLLECTION RECEPTACLE................................................................................51

6.6 SCENARIO 5: DISTRIBUTOR COLLECTION RECEPTACLE .....................................................................................54

6.7 SCENARIO 6: NARCOTIC TREATMENT PROGRAM COLLECTION RECEPTACLE.....................................................55

6.8 SCENARIO 7: MAIL-BACK PROGRAM .................................................................................................................57

CHAPTER 7: SUMMARY OF COSTS.........................................................................................................................63

CHAPTER 8: IMPACT ON SMALL ENTITIES ..........................................................................................................65

8.1 CRITERIA FOR “SIGNIFICANT” ECONOMIC IMPACT .............................................................................................65

8.2 ANALYSIS ...........................................................................................................................................................65

8.2.1 Manufacturers..........................................................................................................................................65

8.2.2 Distributors..............................................................................................................................................67

8.2.3 Reverse Distributors................................................................................................................................69

8.2.4 Narcotic Treatment Programs..................................................................................................................69

8.2.5 Hospitals/Clinics with On-Site Pharmacy ...............................................................................................71

8.2.6 Retail Pharmacies....................................................................................................................................75

8.2.7 Long Term Care Facilities.......................................................................................................................77

8.2.8 Results Summary.....................................................................................................................................81

8.3 CRITERIA FOR “SUBSTANTIAL NUMBER”............................................................................................................82

CHAPTER 9: COST-BENEFIT ANALYSIS OF REGULATORY ACTION ..............................................................84

9.1 COSTS OF THE RULE ...........................................................................................................................................84

9.2 BENEFITS OF THE RULE ......................................................................................................................................84

9.2.1 Prescription Drug Abuse Epidemic .........................................................................................................84

9.2.2 Monetary Costs of Prescription Drug Abuse...........................................................................................86

9.3 EVALUATION OF THE COSTS AND BENEFITS OF THE RULE (THRESHOLD ANALYSIS)...........................................88

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CHAPTER 10: CERTIFICATION STATEMENTS......................................................................................................91

10.1 EXECUTIVE ORDERS 12866 AND 13563............................................................................................................91

10.2 REGULATORY FLEXIBILITY ACT ......................................................................................................................91

10.3 UNFUNDED MANDATES REFORM ACT..............................................................................................................93

10.4 CONGRESSIONAL REVIEW ACT.........................................................................................................................93

APPENDIX A – AFFECTED ENTITIES AND SMALL ENTITIES.............................................................................94

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List of Tables

Table 1. Number of Affected Registrations by Business Activity..............................................................................21

Table 2. Number of Affected Entities and Small Entities...........................................................................................21

Table 3. Manufacturer Additional Labor Cost............................................................................................................30

Table 4. Distributor Additional Labor Cost................................................................................................................31

Table 5. Summary of Costs of Mandatory Portions of the Rule.................................................................................32

Table 6. Number of Affected Entities and Small Entities (Voluntary Participation)..................................................35

Table 7. Estimated Cost to Retail Pharmacy Operating a Collection Receptacle (Low or Medium 

Participation Rate)............................................................................................................................................... 39

Table 8. Cost to Pharmacies Operating Collection Receptacles at Low Participation Rate .......................................40

Table 9. Cost to Pharmacies Operating Collection Receptacles at Medium Participation Rate .................................41

Table 10. Estimated Annually Recurring Cost to Retail Pharmacy Operating a Collection 

Receptacle (High Participation Rate) ...................................................................................................................42

Table 11. Cost to Pharmacies Operating Collection Receptacles at High Participation Rate.....................................43

Table 12. Cost to Hospitals with On-site Pharmacies Operating Collection Receptacles at Registered Locations....45

Table 13. Annually Recurring Costs Associated with Operating a Collection Receptacle at a 

LTCF in an Urban or Suburban Location.............................................................................................................47

Table 14. Annual Recurring Costs Associated with Operating a Collection Receptacle at a 

LTCF in a Rural Location ....................................................................................................................................49

Table 15. Cost of Operating Collection Receptacles at Long Term Care Facilities ...................................................51

Table 16. Estimated Costs to Manufacturer Operating a Collection Receptacle ........................................................53

Table 17. Cost of Manufacturers Operating Collection Receptacles..........................................................................54

Table 18. Cost of Distributors Operating Collection Receptacles..............................................................................55

Table 19. Estimated Costs to NTPs Operating Collection Receptacles......................................................................56

Table 20. Cost of NTPs Operating Collection Receptacles........................................................................................57

Table 21. Estimated Costs to Conduct a Mail-Back Program ....................................................................................60

Table 22. Cost of Reverse Distributors Operating Mail-back Program......................................................................62

Table 23. Summary of Costs at Low, Medium, and High Voluntary Participation Rates..........................................64

Table 24. General Criteria for "Significant" Economic Impact..................................................................................65

Table 25. Cost to Manufacturers as Percentage of Total Value of Shipment per Establishment................................67

Table 26. Cost to Distributors as Percentage of Total Value of Shipment per Establishment....................................69

Table 27. Cost to NTP as Percentage of Revenue per Establishment.........................................................................71

Table 28. Cost to Hospital/Clinic with On-site Pharmacy as Percentage of Revenue per Establishment ..................73

Table 29. Cost to Retail Pharmacies as Percentage of Revenue per Establishment ...................................................77

Table 30. Cost to Long Term Care Facilities as Percentage of Revenue per Establishment ......................................79

Table 31. Summary of Impact on Small Entities........................................................................................................82

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Table 32. General Criteria for “Substantial Number”.................................................................................................82

Table 33. U.S. Costs of Nonmedical Use of Prescription Opioids 2001 and 2006.....................................................87

Table A1: Summary of Affected Business Activities.................................................................................................94

Table A2: Estimated number of affected entities .......................................................................................................99

Table A3: Estimated percentage of establishments/firms that are small entities......................................................100

Table A4: Estimated number of affected entities and small entities affected by mandatory portions......................109

Table A5: Estimated number of affected entities that are small entities...................................................................109

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CHAPTER 1: INTRODUCTION

This rule governs the secure disposal of controlled substances by registrants and ultimate 

users. These regulations will implement the Secure and Responsible Drug Disposal Act of 2010 

(Pub. L. 111-273) by expanding the options available to collect pharmaceutical controlled 

substances from ultimate users for the purpose of disposal, including: take-back events, mailback programs, and collection receptacles. These regulations contain specific language allowing 

law enforcement to voluntarily continue to conduct take-back events, administer mail-back 

programs, and maintain collection receptacles. These regulations allow authorized 

manufacturers, distributors, reverse distributors, narcotic treatment programs (NTPs), 

hospitals/clinics with an on-site pharmacy, and retail pharmacies to voluntarily administer mailback programs and maintain collection receptacles. In addition, this rule expands the authority 

of authorized hospitals/clinics and retail pharmacies to voluntarily maintain collection 

receptacles at long-term care facilities. This rule also reorganizes and consolidates previously 

existing regulations on disposal, including the role of reverse distributors.

In response to the notice of proposed rulemaking (NPRM), the Drug Enforcement 

Administration (DEA) received public comments regarding the economic impact of the rule. In 

response to the public comments, the DEA has made changes in the final rule, and accordingly, 

has updated the economic analysis. Because economic impact estimates changed, the rule has 

been designated as economically significant, with an economic impact that may be greater than 

$100 million in at least one year. Additionally, the DEA’s updated assessment of economic 

impact by size category continues to indicate that the rule will not have a significant effect on a 

substantial number of small entities. Details regarding the requirements of the rule, comments 

received, and changes in the final rule can be found in the NPRM and the final rule.

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This document describes the economic analysis conducted by the DEA in support of 

regulatory analyses statements published with the final rule. Chapter 2 describes the regulatory 

analyses that have economic analysis components, which are analyzed in later chapters. Chapter 

3 describes the scope of analysis. Chapter 4 describes alternatives considered. Chapter 5

contains the economic analysis for the mandatory portions of the rule. Chapter 6 contains the 

economic analysis for voluntary participation in accordance with the rule. Chapter 7 contains the 

summary of costs. Chapter 8 contains the analysis of the rule’s impact on small entities. 

Chapter 9 contains a cost-benefit analysis. Finally, Chapter 10 contains the certification 

statements.

2
CHAPTER 2: REGULATORY ANALYSES INVESTIGATED

2.1 EXECUTIVE ORDERS 12866 AND 13563

Pursuant to Executive Order 12866 (58 FR 51735, October 4, 1993), an agency must submit 

to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs 

(OIRA) a regulatory impact analysis for “significant regulatory actions.” A “significant 

regulatory action” is any regulatory action that is likely to result in a rulemaking 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 entitlements, 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 Executive Order 12866.1

 

Executive Order 13563 (76 FR 3821, January 18, 2011) affirms and supplements Executive 

Order 12866.

2.2 REGULATORY FLEXIBILITY ACT

The Regulatory Flexibility Act (RFA) (Pub. L. No. 96-354, 94 Stat. 1164 (1980) (codified at 

5 U.S.C. 601)) requires agencies to consider the impact of their regulatory proposals on small 

entities, analyze effective alternatives that minimize small entity impacts, and make their 

analyses available for public comment. The RFA does not seek preferential treatment for small 

entities, require agencies to adopt regulations that impose the least burden on small entities, or 

1 E.O. 12866, Section 3(f). 

3

 
mandate exemptions for small entities. Rather, it requires agencies to examine public policy 

issues using an analytical process that identifies, among other things, barriers to small business 

competiveness and seeks a level playing field for small entities, not an unfair advantage.2

2.3 UNFUNDED MANDATES REFORM ACT

The Unfunded Mandates Reform Act (UMRA) (Pub. L. 104-4, 109 Stat. 48 (1995) (codified 

at 2 U.S.C. 1501 et seq.)) was enacted to avoid imposing unfunded Federal mandates on State, 

local, and tribal governments (SLTG), or the private sector. Most of UMRA’s provisions apply 

to proposed and final rules:

• for which a general notice of proposed rulemaking was published; and

• that include a Federal mandate that may result in the expenditure of funds by 

SLTG, in the aggregate, or by the private sector of $100 million or more in any 

one year, adjusted for inflation.

2.4 CONGRESSIONAL REVIEW ACT

Under the Congressional Review Act (CRA) (Pub. L. 104-121, sec. 251, 110 Stat. 847 (1996) 

(codified at 5 U.S.C. 801-808)), a rule generally cannot take effect until the agency submits a 

rule report to each House of Congress and to the Comptroller General of the United States (head 

of the United States Government Accountability Office). Rules that are not considered “major”

under the CRA may take effect as they otherwise would under other applicable law once a rule 

report is submitted. A rule is “major” if it results in an annual effect on the economy of $100 

million or more; a major increase in costs or prices; or significant adverse effects on competition, 

2 SBA Office of Advocacy. “Introduction: The RFA and Related Law,” A Guide for Government Agencies: How to Comply with the 

Regulatory Flexibility Act (May 2012).

4

 
employment, investment, productivity, or the ability of United States companies to compete with 

foreign companies.

5
CHAPTER 3: SCOPE OF ANALYSIS

While some of the requirements in the final rule are mere codification of existing business 

practices, having nominal economic impact, the final rule contains specific requirements for 

registrants that transport or receive controlled substances from other registrants for the purposes 

of disposal, as well as requirements for disposal programs voluntarily established to collect 

controlled substances from ultimate users: take-back events, mail-back programs, and collection 

receptacles.

In the NPRM, based on the initial economic impact analysis, the DEA estimated that this rule 

would have minimal to no economic impact. Based on comments received regarding the

mandatory requirements of the registrant disposal portion of the rule, the DEA has updated the 

economic impact of the requirement for reverse distributors to destroy controlled substances 

within 30 days (relaxed from 14 days proposed in the NPRM). The requirement that two

employees accompany or transport controlled substances to an unregistered location for 

destruction remains unchanged. When transporting and disposing of controlled substances, 

registered manufacturers, distributors, and reverse distributors are currently required to employ 

precautions to guard against in-transit losses. 21 CFR 1301.74(e). Therefore, many nonpractitioners currently utilize two employees to accompany or transport controlled substances to 

an unregistered location for destruction as a counter-measure against theft and diversion. 

Additionally, the current Form DEA-41 (Registrant’s Inventory of Drugs Surrendered) requires 

two signatures, one of the person who witnesses the destruction and one of the person who 

actually destroys the controlled substances. 

Additionally, the DEA received comments related to the cost of voluntarily participating in 

the rule (i.e., collecting pharmaceutical controlled substances from ultimate users for the purpose 

6
of disposal). While these activities are voluntary, the DEA has estimated the level of 

participation and the economic impact of the voluntary activities and included this in the estimate 

of the economic impact of the rule.

The DEA considers two mandatory requirements (30-day destruction requirement and twoperson transportation requirement) of registrant disposal, and voluntary participation in 

accordance with the rule described above as having material costs. The estimated cost of the two 

requirements and the voluntary participation activities represent the total economic impact of the 

rule. Furthermore, the impact of the two requirements and the voluntary participation activities

is analyzed by Small Business Administration (SBA) size category to determine whether or not 

the rule will have a significant impact on a substantial number of small entities. While there is 

an underlying assumption that voluntary collection activities will only be implemented by 

eligible registrants if there is a net benefit, tangible or intangible, to the registrant, the DEA has 

estimated the cost of voluntary participation, and the cost of voluntary participation is included 

in the estimated total economic impact and analysis by size category.

Finally, the DEA does not have a basis for projecting future activities of existing reverse 

distributors such as business growth/increased disposal services, entrance of new reverse 

distributors, or changes in the pharmaceutical or healthcare industry that can affect controlled 

substance disposal activities. Therefore, the DEA assumes, while there will be increases in the 

number of disposal events due to the 30-day destruction requirement, for the purposes of this 

analysis, the number of reverse distributors and the total quantity of controlled substances 

destroyed remain constant for the mandatory portion of the rule before the rule and after 

7
promulgation of the rule. Any increase in controlled substances being destroyed is due to the 

voluntary participation elements of the rule.3

 

3 The estimated cost attributable to additional controlled substances received by distributors or reverse distributors from those entities that 

volunteer to be collectors is included in chapter 6.

8

 
CHAPTER 4: REGISTRANT AND NON-REGISTRANT DISPOSAL: REGULATORY 

ALTERNATIVES CONSIDERED

In developing this final rule, the DEA considered several options for both registrant and nonregistrant disposal. The DEA analyzed alternative regulatory approaches keeping in mind its 

statutory obligations under the Controlled Substances Act (CSA). First, the DEA is required to 

promulgate disposal regulations that will prevent the diversion of controlled substances. 21 

U.S.C. 822(g)(1)(B). Second, in developing the disposal regulations, the DEA is required to 

consider the public health and safety, ease and cost of program implementation, and participation 

by various communities. 21 U.S.C. 822(g)(2). Finally, the DEA cannot implement regulations 

that require any person to establish or operate a delivery or disposal program. 21 U.S.C. 

822(g)(2). The DEA found that in order to properly address the disposal of controlled substances 

by non-registrants, it was necessary to conduct a comprehensive review of DEA policies and 

regulations related to each element of the disposal process, including the transfer, delivery, 

collection, destruction, return, and recall of controlled substances, by both registrants and nonregistrants.

To this end, the DEA considered three options for non-registrant disposal: (1) Single 

Collection; (2) Open Collection; and (3) Multiple Collection. In addition, the DEA considered 

two options for registrant disposal: (1) Retain Existing Regulations and (2) Establish Consistent 

National Standards. Finally, the DEA considered four options for reverse distributors: (1) Onsite Requirement; (2) Prompt Requirement; (3) No Requirement; and (4) No Later Than 30

Calendar Day Requirement.

4

 The DEA performed a qualitative analysis of each of these 

alternatives and selected the “Multiple Collection” option for non-registrant disposal, the 

4 Relaxed from 14 days proposed in the NPRM.

9

 
“Establish Consistent National Standards” option for registrant disposal, and the “No Later Than 

30 Calendar Day Requirement” option for reverse distributors. 

4.1 NON-REGISTRANT DISPOSAL

The DEA considered several alternatives for the disposal of controlled substances by nonregistrants, such as ultimate users and long-term care facilities (LTCF). After a qualitative 

analysis of each of the alternatives, the DEA selected the “Multiple Collection” option for the 

disposal of non-registrant controlled substances.

4.1.1 Single Collection

The DEA considered implementing the “Single Collection” option, which would have 

permitted non-registrants to utilize only one method of collection to dispose of their lawfully 

possessed controlled substances. First, the DEA considered permitting non-registrants to utilize 

only mail-back programs to dispose of their lawfully possessed controlled substances, and not 

collection receptacles or take-back events. Second, the DEA considered permitting nonregistrants to utilize only collection receptacles to dispose of controlled substances. Finally, the 

DEA considered maintaining an existing option for ultimate user disposal and permit nonregistrants to utilize take-back events to dispose of their controlled substances. 

In implementing the Disposal Act, the DEA is required to consider participation by various 

communities, in addition to ease and cost of program implementation and public health and 

safety. The DEA believes that permitting just one disposal option would reduce participation by 

various communities and be of reduced benefit to the public health. With three very different 

disposal options, the possibility for greater participation is increased because more entities will 

have the opportunity to establish or operate a disposal program that reaches more members of the 

public. For example, the mail-back option is potentially more costly than the other options, but it 

10
also has the potential to reach members of the public, such as rural communities, that might not 

have easy access to take-back events or collection receptacles. While take-back events may be 

the most secure collection method, because they must be under the control and supervision of 

law enforcement, the cost of participation may be unreasonable for local law enforcement whose 

resources may be limited. Finally, while collection receptacles strike a balance between 

convenience and safety, as mentioned above, such locations might not be easily accessible to all 

members of the public. As a result, the DEA does not believe that implementing just one 

disposal option would result in optimal public participation, cost effectiveness, or public health 

and safety.

4.1.2 Open Collection

The DEA also considered implementing the “Open Collection” option. Under this option, 

the DEA considered authorizing any person to collect controlled substances from ultimate users 

for disposal, regardless of their status as a DEA registrant. The DEA believes that this option 

would not effectively protect the public health and safety or prevent the diversion of controlled 

substances consistent with the statutory framework of the CSA. 

Rather, the DEA’s final rule contains specific language to continue to allow law 

enforcement, and to additionally authorize certain registrants, to collect controlled substances 

from ultimate users for the purpose of disposal. The DEA is authorizing to become collectors 

those persons registered as manufacturers, distributors, reverse distributors, NTPs, 

hospitals/clinics with an on-site pharmacy, and retail pharmacies because, as registrants, these 

persons are accountable, have experience handling controlled substances, and are subject to 

controls related to their DEA registration. These considerations protect against the diversion of 

controlled substances in the process of ultimate user collection. Further, the DEA believes that 

11
ultimate user collection should occur only at authorized collector locations or in the presence of 

law enforcement. DEA registered locations and controlled premises are subject to DEA 

inspection, security, and other controls. Such requirements ensure that proper security and other 

controls are in place to minimize the risk of diversion from the collection of controlled 

substances. 

4.1.3 Multiple Collection (Selected Methodology)

The DEA considered and selected the “Multiple Collection” option. The DEA is authorizing

the following safe and convenient options for non-registrants to transfer pharmaceutical 

controlled substances for purposes of disposal: take-back events, mail-back programs, and 

collection receptacle locations. The DEA is also revising return and recall procedures for 

ultimate users, as discussed below. Pursuant to the final rule, registered manufacturers, 

distributors, reverse distributors, NTPs, hospitals/clinics with an on-site pharmacy, and retail 

pharmacies may obtain authorization from the DEA to be a collector. A collector is a registrant 

authorized to receive controlled substances for the purpose of destruction from non-registrants in 

lawful possession of controlled substances. The DEA is also specifying that law enforcement 

may continue to voluntarily collect controlled substances from non-registrants. 

The DEA selected this alternative because, consistent with Congress’s goal in passing the 

Disposal Act, these three options will allow public and private entities to develop a variety of 

methods for collecting and destroying pharmaceutical controlled substances in a secure, 

convenient, and responsible manner. The disposal options for non-registrants are intended to 

maximize cost efficiency, participation, and accessibility while simultaneously promoting the 

secure and responsible disposal of pharmaceutical controlled substances in order to prevent 

diversion and abuse.

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4.2 REGISTRANT DISPOSAL

The DEA also considered several alternatives for the disposal of controlled substances by 

DEA registrants, and selected the “Establish Consistent National Standards” option.

4.2.1 Retain Existing Regulations

The DEA considered implementing the “Retain Existing Regulations” option, which would 

have made no changes to the existing registrant disposal regulations (21 CFR 1307.12 and 

1307.21). Currently, “any person in possession of any controlled substance and desiring or 

required to dispose of such substance may request assistance from the SAC in the area in which 

the person is located for authority and instructions” for disposal. 21 CFR 1307.21(a). The 

procedures for the disposal of controlled substances by registrants are often determined on a 

case-by-case basis by the DEA Special Agent in Charge (SAC) in the area where the registrant is 

located. In many circumstances, the SAC has the discretion to determine how the registrant 

disposes of the controlled substance, including to whom the substances may be transferred or 

delivered. 21 CFR 1307.21(a) and (b). While this approach is effective, with the enactment of 

the Disposal Act and an increased need for the responsible disposal of controlled substances by 

registrants and non-registrants alike, the DEA believes that in order to securely and effectively 

dispose of unwanted or unused controlled substances, consistent national standards are 

necessary. 

4.2.2 Establish Consistent National Standards (Selected Methodology)

The DEA considered and selected the “Establish Consistent National Standards” option. 

This option removes existing regulations on the disposal of controlled substances (21 CFR 

1307.12 and 1307.21), revises parts 1300, 1301, 1304, 1305, and 1307 and promulgates a new 

part 1317. The selected methodology establishes uniform requirements on proper disposal 

13
procedures, security, and recordkeeping for registrants, and comprehensively outlines the process 

and procedure for the disposal of controlled substances by registrants and non-registrants. The 

DEA is establishing clear disposal procedures for all registrants that they can follow each time 

they dispose, regardless of geographic location. This rule will also reduce the burden on 

registrants by eliminating the existing requirement for every registrant to contact the SAC in 

their area when they wish to destroy controlled substances. Although this rule revises the 

regulations to authorize registrants to dispose of controlled substances without prior approval 

from the SAC, a practitioner disposing of inventory may continue to request assistance from the 

SAC in their area in accordance with 21 CFR 1317.05(a)(4). The procedures and security and 

recordkeeping requirements that the DEA is establishing are intended to codify existing practice 

and set singular and consistent procedures for DEA registrants in accordance with their 

authorized business activities while protecting the public health and safety and minimizing the 

risk of diversion. The DEA also revised regulations for reverse distributors that are clear and 

consistent. The DEA believes that these regulations will help reverse distributors comply with 

the CSA in a manner that effectively decreases the risk of diversion of controlled substances 

during the disposal process. 

4.3 REVERSE DISTRIBUTORS

Reverse distributors are a unique group of registrants whose primary function is to receive

controlled substances for the purpose of destruction or return. In this regard, reverse distributors 

provide a valuable service to other registrants in the disposal process. In the transfer of 

controlled substances between registrants, each registrant serves as a check on the other and 

verifies whether the controlled substance has reached its lawful destination. This is 

accomplished through existing reporting, recordkeeping, and order form requirements. 21 

14
U.S.C. 827 and 828; 21 CFR parts 1304 and 1305. However, a reverse distributor that acquires a

controlled substance from another registrant for destruction is the last person to possess such 

substance before destruction and there is no recipient to verify that the substance has been 

destroyed rather than diverted. Furthermore, reverse distributors accumulate greater amounts of 

controlled substances that are destined for destruction in comparison to other registrants. This is 

because reverse distributors routinely acquire controlled substances for destruction from other 

registrants and may also be authorized as collectors pursuant to the final rule. The DEA 

considered several alternatives and selected the “No Later Than 30 Calendar Day Requirement” 

option. The DEA is establishing this disposal requirement specific to reverse distributors in 

order to prevent the accumulation of vast amounts of controlled substances, in a single location, 

pending destruction.

4.3.1 On-site Requirement

The DEA considered the “On-site Requirement” option, which would have required reverse 

distributors to have and utilize an on-site method of destruction. An effective way to reduce the 

risk of diversion is to minimize the transfer of controlled substances between various locations. 

The DEA considered this option but rejected it because the DEA wanted to maintain the existing 

practice of many reverse distributors (and many other registrants) to use off-site destruction. 

Accordingly, reverse distributors may destroy controlled substances on-site or off-site. The DEA 

is requiring all registrants that choose to destroy a controlled substance to follow certain security 

procedures related to employees, transportation, handling, and recordkeeping. The DEA is 

establishing these requirements in order to strengthen the integrity of the destruction process, and 

to help deter and detect diversion. 

15
4.3.2 Prompt Requirement

The DEA considered the “Prompt Requirement” option, which would have required reverse 

distributors, like all other registrants, to promptly destroy controlled substances. The “prompt” 

destruction requirement is flexible enough to ensure that controlled substances destined for 

destruction do not accumulate and are destroyed in a timely manner, but still account for the 

individual circumstances of certain registrants that destroy controlled substances. The DEA 

considered this option for reverse distributors and rejected it because the primary business 

activity of reverse distributors, unlike other registrants, is to acquire controlled substances for the 

purpose of destruction or return. As a result, reverse distributors generally accumulate greater 

amounts of controlled substances that are destined for destruction in comparison to other 

registrants. They are typically the last registrant to handle the controlled substance with no other 

registrant reporting and recording receipt, or non-receipt, of the substance as a check against 

diversion. 

4.3.3 No Requirement

The DEA considered the “No Requirement” option, which would have retained the current 

destruction standard and would not have put any deadline on when reverse distributors must 

destroy controlled substances acquired for destruction. The DEA considered and rejected this 

option. The DEA is establishing a comprehensive regulatory framework for the collection and 

destruction of controlled substances. All registrants that destroy will be required to destroy 

controlled substances within a certain time period – reverse distributors will be required to 

destroy the controlled substances no later than 30 days after receipt and all other registrants will 

be required to destroy their lawfully possessed controlled substances promptly. The DEA is 

establishing destruction deadlines because, just as there is a greater risk of diversion when 

16
controlled substances are being transported,5 there is also an increased risk of diversion the 

longer controlled substances accumulate and remain in storage awaiting destruction.

4.3.4 No Later Than 30 Calendar Day Requirement (Selected Methodology)

The DEA considered and selected the “No Later Than 30 Calendar Day Requirement” 

option, which requires reverse distributors to destroy controlled substances received for the 

purpose of destruction no later than 30 days after receipt. The “No Later Than 30 Calendar Day 

Requirement” is unique to reverse distributors – other registrants that destroy must do so 

promptly and do not have to follow a specific time limit – because the primary business activity 

of reverse distributors, unlike other registrants, is to acquire controlled substances for the 

purpose of destruction. As a result, reverse distributors generally accumulate far greater amounts 

of controlled substances that are destined for destruction in comparison to other registrants. 

Generally, other registrants destroy only a minimal amount of controlled substances because they

acquire controlled substances for the purpose of further distribution through the supply chain or 

healthcare delivery system. Records of these acquisitions and transfers can be verified by other 

registrants’ records in order to deter and detect diversion. In contrast, reverse distributors 

acquire large amounts of controlled substances for the purpose of destruction, and are entrusted 

to ensure that these substances are actually destroyed. The 30-day destruction requirement will 

ensure that reverse distributors destroy controlled substances in a timely manner, and will

prevent the accumulation of large amounts of controlled substances pending destruction, while 

also enabling them sufficient time to prepare the necessary records required for destruction. 

5 From 2010 to 2013, there were a total of 5,798 instances of theft/loss of controlled substances reported to the DEA by manufacturers, 

distributors, and reverse distributors, totaling 31,899,665 finished dosage units, 35,879,428 milligrams of raw powder, and 23,664,820 milliliters 

of liquid controlled substances. Of these thefts/losses, in transit thefts/losses accounted for 72% of the number of theft/loss incidents, 91% of the 

finished dosage units, 53% of the milligrams of raw powder, and 92% of the milliliters of liquid controlled substances.

17

 
CHAPTER 5: ANTICIPATED ECONOMIC IMPACT OF MANDATORY PORTIONS 

OF REGULATORY ACTION: REGISTRANT DISPOSAL

5.1 GENERAL RELATIONSHIP BETWEEN REGISTRATIONS, ENTITIES, AND 

SMALL ENTITIES

DEA registrations are held by a variety of entities, including businesses such as 

manufacturers, distributors, and pharmacies, as well as individuals such as practitioners6 and 

mid-level practitioners. It is very common for businesses and individuals to hold more than one 

DEA registration, such as where a registrant handles controlled substances at multiple locations 

or engages in multiple types of DEA-registered activities. However, RFA requirements and 

SBA size standards are applicable to entities and businesses. Because the DEA does not, in the 

general course of business, collect or otherwise maintain information regarding associated or 

parent organizations holding multiple registrations, the DEA needs some way of correlating and 

applying the parameters of the RFA and corresponding SBA size standards to DEA registrations 

(i.e., develop a relationship between the number of registrations and the number of entities). 

This rule affects some registrant categories differently than other registrant categories, and it 

affects different registrants within the same registrant category differently. In addition, some 

registrants will be differently affected depending on factors outside the DEA’s control (e.g., the 

number of registrants that volunteer to have a collection receptacle may have an economic effect 

on the overall cost), and it affects non-registrants (e.g., LTCFs and ultimate users). Accordingly, 

the DEA evaluated multiple data sources for this economic analysis. 

The number of affected entities for each business activity is estimated from a combination of 

DEA registration records and the 2007 Economic Census, the most recent census with a 

6 For the purposes of this Economic Impact Analysis, “practitioner” means an individual registered with the DEA as a “practitioner” (physicians, 

veterinarians, podiatrists, and dentists), but does not include hospitals/clinics, pharmacies, or mid-level practitioners.

18

 
complete set of available data. The DEA registration records form the basis for all DEA 

registrants affected by this rule and an industry report which estimates the number of LTCFs 

forms the basis of analysis for LTCFs. The method of estimating the number of affected entities 

and small entities is the same for all business activities, with the exception of reverse 

distributors. The analyses pertaining to the number of entities and small entities for reverse 

distributors and the other business activities are presented in Appendix A.

The same general method for estimating the number of affected entities and affected small 

entities is applied to all business categories, except reverse distributors. The general method is 

described below:

1. The number of DEA registrations by business activity forms the basis of the estimate 

(except LTCFs, where an industry report is used to estimate the number of LTCF 

facilities, because LTCFs are not registered with the DEA).

2. North American Information Classification System (NAICS) codes that most closely 

represent the affected entities (e.g., manufacturer, distributor, pharmacy, etc.) are 

identified.

3. To account for entities with multiple registrations, the relationship between the 

number of establishments and entities is developed for each NAICS code from the 

Economic Census and applied to the number of registrations to estimate the number 

of affected entities.

4. The census data for employee size or annual revenue is compared to the SBA size 

standards to determine the percentage of entities, for each business activity, that are 

small.

19
5. The percentage of businesses that are below SBA size standards is applied to the 

number of affected entities above SBA size standards to estimate the number of 

affected small entities.

In-depth information on this topic is found in appendix A, which details the specific 

methodology used by the DEA to determine the number of entities affected by the rule and the 

number of entities that are small entities.

5.2 ENTITIES AFFECTED BY MANDATORY PORTIONS OF THE RULE

5.2.1 Number of Registrations Affected by the Mandatory Portions of the Rule

Upon effect of this final rule, all controlled substance DEA registrations will be required to 

comply with this rule. As of November 2013, there were 1,511,389 controlled substances 

registrations.

However, only a very small subset of the 1.5 million controlled substance registrations are 

associated with activities where the rule imposes new mandatory requirements: the 30-day 

destruction requirement and two-person transportation requirement. Manufacturers and 

distributors that choose to transport controlled substances to reverse distributors or to an 

unregistered, off-site location for destruction are only affected by the two-person transportation

requirement. Reverse distributors that destroy on-site are affected by the 30-day requirement. 

Reverse distributors that pick up controlled substances at a registered location and/or transport 

controlled substances to an unregistered, off-site location for destruction or to another reverse 

distributor are affected by both requirements. Therefore, the number of registrations affected by 

the mandatory portions of the final rule is the total number of current manufacturer, distributor, 

and reverse distributor registrations, 1,425. Table 1 lists the number of affected registrations by 

business activity.

20
Table 1. Number of Affected Registrations by Business Activity

Business activity Number of registrations

Manufacturer 536 

Distributor 829 

Reverse distributor 60 

Total 1,425

5.2.2 Number of Entities and Small Entities Affected by the Mandatory Portions of the 

Rule

As previously discussed, manufacturers and distributors are only affected by the mandatory 

two-person transportation requirement of this rule. Reverse distributors are affected by both

mandatory portions of the rule (30-day destruction and two-person transportation requirement).

Appendix A contains the detailed analysis estimating the number of affected entities and 

small entities. Table 2 contains the summary of results, by DEA business activity, of the 

estimated number of affected entities and affected small entities. 

Table 2. Number of Affected Entities and Small Entities

Business activity

Number of 

registrations

Number of 

affected entities

Percent below 

SBA size 

standards

Number of 

affected small 

entities

Manufacturer

 

536 

 

439 96.3

 

423 

Distributor

 

829 

 

585 94.9

 

555 

Reverse distributor*

 

60 

 

55 69.1

 

38 

Total

 

1,425 

 

1,079 

 

1,016 

* Reverse distributor figures are displayed for reference. As described in Appendix A, figures for reverse distributors were determined from 

research of the affected registrants.

5.3 QUANTITATIVE ANALYSIS OF MANDATORY PORTIONS

5.3.1 Registrant Disposal: Impact on Reverse Distributors that Destroy Controlled 

Substances

Reverse distributors that receive controlled substances for the purpose of destruction must 

destroy those substances no later than 30 calendar days after receipt. For all registrants that 

destroy controlled substances or cause controlled substances to be destroyed (e.g., by 

21
transporting the substance to an off-site, unregistered location for destruction), the DEA is 

requiring that such registrants follow certain security procedures related to employees, 

transportation, handling, and destruction. Additionally, a registrant that destroys a controlled 

substance or causes controlled substances to be destroyed is required to maintain a record of that 

destruction on a form issued by the DEA (Form DEA-41). The DEA has modified Form DEA41 to accurately reflect the destruction, including the signature of the two employees who 

witnessed the destruction. 

In the initial EIA for the NPRM, the DEA estimated that such proposed disposal procedures 

would have minimal to no economic impact on reverse distributors that destroy controlled 

substances and invited public comment. Based on public comments received, the DEA has 

updated the EIA as it pertains to the no later than 30-day requirement and two-person

transportation requirement.

The final rule specifies the maximum time limit for reverse distributors to destroy or cause 

the destruction of any controlled substance received for the purpose of destruction: no later than 

30 days after receipt. In addition, two employees are required to accompany controlled 

substances that are transported to an off-site, unregistered location for destruction.

To estimate the impact of these requirements, the DEA examined destruction, transfer, and 

transport practices of reverse distributors, specifically:

• Whether the reverse distributor destroys controlled substances or transfers to 

another reverse distributor for destruction;

• If the reverse distributor destroys controlled substances, whether destruction is 

conducted on-site, or off-site;

• Destruction frequency;

22
• If destruction is conducted off-site, the distance to the off-site location; and

• Number of employees involved in transport.

Below are operating parameters that may result in increased costs due to the final rule:

• Reverse distributors that destroy on-site: additional on-site destructions to comply 

with 30-day destruction requirement;

• Reverse distributors that transfer or destroy off-site: additional trips to 

unregistered destruction locations or other reverse distributors; or additional 

shipments to other reverse distributors to comply with 30-day destruction 

requirement;

• Distance and driving time to registered location or unregistered destruction 

facility; and

• Additional employee(s) to accompany transport.

Transfer, Destruction, On-site, or Off-site

Below are the results of whether or not the affected entities transfer or destroy controlled 

substances, and if they destroy whether they destroy on-site or off-site:

• 42 destroy off-site

• 10 destroy on-site

• 3 transfer only (do not destroy controlled substances)

Destruction or Transfer Frequency (number of trips per year)

To comply with the 30-day destruction requirement while making the fewest number of trips, 

reverse distributors would need to make 12 destruction trips per year. The destruction frequency 

was reviewed for 20 of the affected entities where destruction information was available. 

Destruction frequencies range from semi-annually (two per year) to daily (365 times per year), 

23
with median destruction frequency of 12 times per year.7

 The median destruction frequency of 

12 per year was used for the remaining 35 entities where there was no specific destruction

frequency information available. 

Based on the information that the DEA obtained from 20 of the affected reverse distributors 

and the information that the DEA estimated for the remaining 35 affected reverse distributors, 

the DEA estimates that 46 of 55 affected entities currently meet the 30-day requirement. The 

remaining nine affected entities would be required to conduct additional destructions or transfers 

to meet the 30-day requirement. Of the nine entities that would be required to make additional 

destructions or transfers, seven entities conduct destructions at off-site facilities, one entity 

conducts transfers only, and one entity conducts destructions on-site. The difference between the 

baseline number of trips and the number of trips after promulgation of the rule resulted in an 

increased number of trips.

Distance and Driving Time to Transfer Location or Destruction Facility

Distance from the registered location to the transfer location (e.g., another reverse 

distributor) or unregistered destruction facility was estimated using online mapping applications. 

The estimated distance and driving time are from the zip code of the registered location to the zip

code of the destination. When only the destination city was available, distance is estimated from 

the zip code of the registered location to the destination city. The destination location was not 

found for six reverse distributors that destroy off-site. For these reverse distributors, the DEA 

estimated the distance by determining the distance from their registered location to the nearest 

7 The 20 destruction frequencies (destructions per year) as reported to the DEA are: 2, 3, 4, 4, 4, 4, 4, 5, 10, 12, 12, 12, 12, 20, 25, 25, 50, 50, 

360, and 360.

24

 
destruction facility identified by other reverse distributors that identified specific destruction 

facilities.

Baseline Number of Employees for Transport

The number of employees used to accompany the transport of controlled substances for 

destruction was determined for reverse distributors. However, the number of employees for 

transport was not found for 11 of the 42 reverse distributors that destroy off-site. Excluding the

one reverse distributor that exclusively used common carriers, the average number of 1.7 

employees for transport was used as an estimate for these 11 reverse distributors.

The two-person transportation requirement mandates that two employees accompany the 

transport of controlled substances (unless the substances are transported by common or contract 

carrier). The difference between the baseline number and two employees contributes to 

additional labor and possible travel costs.

5.3.2 Reverse Distributor Additional Destruction Costs

Additional destructions may be required as a result of the 30-day destruction requirement. 

As discussed, the difference between the baseline number of trips and the number of trips after 

promulgation of the rule represents the increased number of trips required as a result of the 30-

day destruction requirement. This includes reverse distributors that only transfer to other reverse 

distributors for destruction. These reverse distributors may incur costs for additional transfers.

The cost of the additional destructions is determined for each reverse distributor by 

multiplying the number of additional destructions by the estimated cost of each destruction, $250 

for 100 to 300 pounds of controlled substances. The same amount is used for on-site, off-site, 

and transferred destructions. The estimated $250 for each destruction is based on a number of 

data points, i.e., publicly available research, public comments, and waste-to-energy company 

25
websites. Destruction cost estimates are mostly expressed in dollars per pound. However, as 

one source indicated, it is reasonable to estimate a minimum cost per batch. The cost of $250 per 

batch of 100 to 300 pounds equates to $0.83 to $2.50 per pound. If no additional destruction is 

required, the cost will be zero. 

Forty-six of 55 affected businesses, as described in section 5.3.1, are estimated to already 

meet the 30-day destruction requirement and are not expected to make additional destructions or 

transfers as a result of this rule. Nine of 55 affected businesses are estimated to make a 

combined total of 68 additional trips, for a total cost of $17,000 ($250 per destruction x 68

additional destructions). 

5.3.3 Reverse Distributor Additional Transport Costs

When additional destruction or transfer for destruction is required, the reverse distributor is 

expected to incur corresponding transport costs, i.e., the cost of transporting the controlled 

substance for destruction or transfer. On-site destructions are estimated to incur no additional 

transport cost. As discussed above, nine entities may need to make additional destructions, one

of which destroys on-site, incurring no additional transportation costs. Therefore, eight entities 

may need to make additional destructions and destroy off-site or transfer to other reverse 

distributors for destructions and are anticipated to incur additional transport costs.

The additional transport costs are estimated by multiplying the number of additional trips by 

estimated distance (described in above section) by $2.60 per mile. The $2.60 per mile is based 

on an average van rate of $1.868 with a 40% premium for controlled substances. For example, a 

reverse distributor who needs to make nine additional trips to a disposal site 617 miles away will 

8 www.dat.com. 

26

 
incur $14,460 ($1.86 per mile x 1.4 x 9 additional trips x 617 miles) in additional transport cost. 

This method is applied to all reverse distributors who need to make additional destruction trips or 

transfers as a result of this rule. The estimated total additional transport costs are $69,738. 

5.3.4 Reverse Distributor Additional Labor Costs

The ‘additional labor costs’ are the labor costs associated with transporting controlled 

substances for disposal. These costs arise from a combination of additional off-site destructions

or transfers and the requirement to have two employees accompany the transport for disposal.

There are no additional labor costs for additional on-site destructions. 

The additional labor costs are determined by first, estimating the baseline labor cost 

associated with the number of off-site destructions or transfers and number of employees 

accompanying the transport, then, estimating the labor cost associated with the number of offsite destructions or transfers after the implementation of the 30-day destruction requirement and 

with two employees accompanying the transport. The difference between the labor cost after 

implementation of the rule and the baseline labor cost is the calculated additional labor cost.

The labor costs for baseline and final rule scenarios is estimated by multiplying the loaded 

labor rate of $37.729 by the estimated round-trip driving time plus rest time for driving long 

distances. The United States Department of Transportation (DOT) regulates the number of hours 

a truck driver may drive per day as well as the total number of hours. The DOT’s General Hours 

of Service Guidelines state that drivers may drive up to 11 hours, but are limited to 14 hours in a 

duty period and drivers must take a mandatory 30-minute break by their eighth hour of coming 

9 The average of the Bureau of Labor Statistics, 2012, “mean hourly wages” for 11-3071 Transportation, Storage, and Distribution Managers in 

the Warehousing and Storage industry ($38.72) and 53-0000 Transportation and Material Moving Occupations in the Specialized Freight 

Trucking industry ($18.22), plus 32.5% load applied for taxes and benefits.

27

 
on duty. Therefore, there is zero additional rest time for round-trip distances between 0 and 8 

hours, from 8 to 11 hours the additional rest time of 30 minutes is needed, and for distances more 

than 11 hours a paid night of rest, or 13 additional hours, is needed. Sample calculation: 

One reverse distributor who is currently sending one employee to destroy

controlled substances at an off-site location at an estimated 3.85 hour (7.7 hours 

round trip) drive on a quarterly basis will need to send two employees monthly. 

The eight additional trips and the additional employee will result in higher 

additional labor cost. The estimated labor cost prior to the rule is $1,162 ($37.72 

per hour x 1 employee x 7.7 hours x 4 trips). The estimated labor cost after 

promulgation of the rule is $6,971 ($32.72 per hour x 2 employees x 7.7 hours x 

12 trips). The difference, additional labor cost, is $5,809 ($6,971 - $1,162).

Applying this method to all affected reverse distributors, the additional labor cost to 

transport controlled substances for disposal is $144,418.

5.3.5 Reverse Distributor Additional Travel Costs: Per Diem and Vehicle Cost

Per diem for lodging and incidental expenses is incurred when round-trip driving time is 

more than 11 hours. After 11 hours of driving time, a night of rest is added. The Fiscal Year 

2014 standard continental United States per diem rate used by the Federal government of $88 is 

used to estimate the cost of lodging and incidental expense.

10 For example, a reverse distributor

currently sending two employees to a destruction site at a distance requiring an estimated 29 

hours of round trip driving time ten times per year is estimated to make two additional trips per 

year. The estimated driving time of 29 hours requires two days of per diem cost per employee. 

Therefore, this reverse distributor is estimated to incur $704 ($88 per diem x 2 days x 2 

employees x 2 additional trips) in additional per diem cost. Applying this method to all affected 

10 Fiscal year 2014, standard “CONUS” per diem is $129, which includes $83 for lodging, $7 for breakfast, $11 for lunch, $23 for dinner, and $5 

for incidental expenses, http://www.gsa.gov/portal/content/103168#FY14PerDiemFiles. Since the employee receiving per diem would have 

eaten breakfast, lunch, and dinner, the meals portion of per diem represents a transfer of cost from the employee to the employer and not a cost 

above the baseline of meal expenditure by the employee. Therefore, the per diem cost, as a result of the rule, is $88, lodging and incidental 

expense.

28

 
reverse distributors, the estimated total per diem cost for lodging and incidental expense is 

$16,262.

The two-person transportation requirement requires two employees to accompany the 

controlled substances being transported (unless the substances are transported by common or 

contract carrier). The DEA estimates that there will be no additional vehicle costs for the 

baseline scenario where there were one or two employees accompanying the transport. The 

additional vehicle cost is estimated by multiplying the round-trip mileage by the Internal 

Revenue Service reimbursement rate of $0.56 per mile. Whether the reverse distributor has a 

vehicle available for the two employees to use to accompany the transport or the two employees 

use a privately owned vehicle, the DEA believes the use of the mileage reimbursement rate of 

$0.56 is a reasonable estimate. One reverse distributor is estimated to incur additional vehicle

cost of $307 ($0.56 per mile x 274 one-way miles x 2).

5.3.6 Manufacturer Additional Labor Cost

Manufacturers are also affected by the two-person transportation requirement. Any 

manufacturer that itself transports controlled substances to reverse distributors or to an 

unregistered, off-site location for destruction is required to have two employees transport or 

accompany the controlled substances. Based on the DEA’s knowledge and experience with 

manufacturers, most manufacturers hire reverse distributors to pick up from their registered

location controlled substances destined for destruction, and any manufacturers that transport the 

controlled substances themselves for destruction do so infrequently and with two employees. 

Additionally, a manufacturer’s primary business activity is to produce pharmaceutical controlled 

substances in dosage form or in bulk for downstream customers and thus, a manufacturer would 

generally destroy residual amounts of controlled substances. While the DEA believes this 

29
requirement affects far less than half of the manufacturers, the DEA utilizes the top of the likely 

range to be conservative. For the purposes of this analysis, the DEA assumes 50% of 

manufacturers make 12 trips per year with one employee, thus requiring one additional employee 

to accompany the transport. Additionally, the DEA assumes each trip will require eight hours of 

round-trip travel time. Applying the same labor rate used for reverse distributors of $37.72,11 to 

eight hours of travel time and 12 trips per year, the DEA estimates that each manufacturer will 

incur an additional annual cost of $3,621 ($37.72 x 8 x 12). Applying this cost to 50% of

manufacturers, the DEA estimates the annual cost of the two-person transportation requirement

to the affected manufacturers combined is $970,531. The calculation is summarized in table 3 

below:

Table 3. Manufacturer Additional Labor Cost

Manufacturer additional labor cost elements

Number of manufacturers 536 

Percentage affected 50

Number of manufacturers affected 268

Trips per year 12 

Additional labor cost per trip $ 302 

Additional cost per manufacturer $ 3,621 

Cost to manufacturers $ 970,531 

* Figures are rounded.

5.3.7 Distributor Additional Labor Cost

Like manufacturers, distributors are also affected by the two-person transportation

requirement when transporting controlled substances themselves. Any distributor that transports 

controlled substances to a reverse distributor or to an unregistered, off-site location for 

11 See note 12.

30

 
destruction is required to have two employees transport or accompany the controlled substances. 

Based on the DEA’s knowledge and experience with distributors, most distributors hire reverse 

distributors to pick up from their registered location controlled substances destined for 

destruction and any distributors that transport the controlled substances themselves for 

destruction do so infrequently and with two employees. Additionally, a distributor’s primary 

business activity is to transfer pharmaceutical controlled substances in dosage form to the retail 

market, and therefore a distributor would rarely need to destroy controlled substances. 

Distributors may have to destroy expired or tainted controlled substances, but this is also a 

relatively rare occurrence. While the DEA believes this requirement affects far less than half of 

the distributors, the DEA utilizes the top of the likely range to be conservative. For the purposes 

of this analysis, the DEA assumes 50% of distributors make 12 trips per year with one employee, 

thus, requiring one additional employee to accompany the transport. Additionally, the DEA 

assumes each trip will require eight hours of round-trip travel time. Applying the same labor rate 

used for reverse distributors of $37.72,12 to eight hours of travel time and 12 trips per year, the 

DEA estimates that each distributor will incur an additional annual cost of $3,621 ($37.72 x 8 x 

12). Applying this cost to 50% of distributors, the DEA estimates the annual cost of the twoperson transportation requirement to the affected distributors combined is $1,501,064. The 

calculation is summarized in table 4 below:

Table 4. Distributor Additional Labor Cost

Distributor additional labor cost elements

Number of distributors 829 

Percentage affected 50

12 See note 12.

31

 
Number of distributors affected 415

Trips per year 12 

Additional labor cost per trip $ 302 

Additional cost per distributor $ 3,621 

Cost to distributors $ 1,501,064 

* Figures are rounded

5.3.8 Combined Costs/Annual Cost of the Mandatory Portions of the Rule

Below is a summary of the cost categories:

Table 5. Summary of Costs of Mandatory Portions of the Rule

Summary of costs

Manufacturers $ 970,531

Distributors $ 1,501,064

Reverse distributors

Additional destruction cost: $ 17,000

Additional transport cost: $ 69,738

Additional labor cost: $ 144,418

Additional lodging and incidental

 expenses cost: $ 16,262

Additional vehicle cost: $ 307

Subtotal reverse distributor additional costs $ 247,725

Total $ 2,719,319

* Figures are rounded

The annual cost of the mandatory portion of the rule is estimated to be $2,719,319.

32
CHAPTER 6: ESTIMATED ECONOMIC IMPACT OF VOLUNTARY 

PARTICIPATION IN REGULATORY ACTIVITY: NON-REGISTRANT DISPOSAL

Manufacturers, distributors, reverse distributors, NTPs, hospitals/clinics with an on-site 

pharmacy, and retail pharmacies may be authorized to collect ultimate user pharmaceutical 

controlled substances if certain conditions are met. Collecting pharmaceutical controlled 

substances from ultimate users is completely voluntary, not mandated. Manufacturers, 

distributors, reverse distributors, NTPs, hospitals/clinics with an on-site pharmacy, retail 

pharmacies and law enforcement that choose to engage in the collection activities described in 

this section, do so based on their own evaluation of costs and benefits (tangible and intangible). 

For the purposes of the EIA, the DEA assumes that an entity will volunteer to perform the 

activities to facilitate Non-Registrant Disposal only if there is a positive benefit to the entity; and 

any manufacturer, distributor, reverse distributor, NTP, hospital/clinic with an on-site pharmacy, 

retail pharmacy or law enforcement that chooses to engage in these activities can decide to cease 

these activities at any time without suffering any negative consequences. Although there is 

limited information from which to anticipate the level of participation in the voluntary activities, 

the DEA estimated the level of participation and the costs of participating in voluntary collection 

activities. Each potential scenario and associated costs are described below.

Upon promulgation, this final rule will provide ultimate users, persons lawfully entitled to 

dispose of ultimate user decedent’s property, and, in some circumstances, long-term care 

facilities, the following safe and convenient options to transfer controlled substances for 

purposes of disposal: take-back events, mail-back programs, and collection receptacles. These 

new options are in addition to the methods of disposal currently in use by many ultimate users. 

For long-term care facilities, the rule provides additional options for disposal and does not 

remove any methods currently used by long-term care facilities to destroy controlled substances 

33
that are consistent with Federal, State, tribal, and local laws and regulations.

Registered manufacturers, distributors, reverse distributors, NTPs, hospitals/clinics with an 

on-site pharmacy, and retail pharmacies may obtain authorization from the DEA to be a 

collector. A collector is a registrant authorized by the DEA to receive a pharmaceutical 

controlled substance for the purpose of destruction from an ultimate user or other authorized 

non-registrant person in lawful possession of the controlled substance. 

While the DEA specifies certain requirements, collectors have a myriad of options for 

implementation. Based on the chosen implementation, costs and benefits can vary widely from 

collector to collector. It is possible for collectors to incorporate collection activities as part of 

their promotional activities and/or develop partnerships with other businesses and agencies to 

maintain a collection receptacle or mail-back program in order to minimize costs and maximize 

benefits. For example, a pharmacy with a collection receptacle may derive tangible benefits, 

such as additional revenue from increased retail traffic to the pharmacy. Collectors may also 

derive intangible benefits such as public safety and good will from its collection activities. 

6.1 NUMBER OF ENTITIES AND SMALL ENTITIES AFFECTED

Based on the discussions above, manufacturers, distributors, reverse distributors, NTPs, 

hospitals/clinics with an on-site pharmacy, retail pharmacies, and LTCFs will be affected if they 

choose to voluntarily participate in the collection activities authorized by this rule. While the 

DEA does not believe that any reverse distributors will place collection receptacles at their 

registered locations because they are generally not open to the public and there are a small 

number of employees actually working at those registered locations, reverse distributors will be 

affected by the voluntary participation aspects of the rule in other ways. The affected number of 

34
manufacturer, distributor, and reverse distributor entities and small entities was estimated in the 

mandatory requirements analysis, section 5.2.

As previously summarized in section 5.1 and explained in detail in appendix A, the DEA 

utilizes the combination of the number of affected DEA registrations, the number of LTCFs, 

2007 Economic Census data, and the SBA size standards to estimate the number of affected 

entities and the number of affected small entities. The DEA estimates that the voluntary 

participation elements of this rule affects 53,533 entities, of which 50,714 are small entities. 

Table 6 provides a summary by business activity.

Table 6. Number of Affected Entities and Small Entities (Voluntary Participation)

Business activity

Number of 

registrations 

or LTCFs

Number 

of affected 

entities

Percent 

below SBA 

size 

standards

Number of affected 

small entities

Manufacturer

 

536 

 

439 96.3 423 

Distributor

 

829 

 

585 94.9 555 

Reverse distributor

 

60 

 

55 69.1 38 

NTP 1,332 656 93.0 610

Hospital/clinic, with on-site 

pharmacy 5,723

 

3,068 43.9 1,346 

Retail Pharmacy 69,026

 

29,582 99.1 29,328

Total DEA registrations 77,506

 

34,385 93.9 32,300 

LTCF

 

31,600 

 

19,148 96.2 18,414 

Total

 

109,106 

 

53,533 94.7 50,714 

6.2 SCENARIO 1: RETAIL PHARMACY COLLECTION RECEPTACLE

This scenario is a retail pharmacy operating a collection receptacle. Requirements to operate 

a collection receptacle include, but are not limited to:

Collection receptacle requirements:

35
• Securely fastened to a permanent structure so that it cannot be removed;

• Securely locked, substantially constructed container with a permanent outer 

container and a removable inner liner;

• Include a small opening that allows contents to be added to the inner liner, but 

does not allow removal of the inner liner’s contents; and

• Prominently display a sign indicating that only schedule II–V controlled and noncontrolled substances are acceptable.

Inner liner requirements:

• Waterproof, tamper-evident, and tear-resistant;

• Removable and sealable immediately upon removal without emptying or touching 

the contents;

• Contents of the inner liner shall not be viewable from the outside when sealed;

• Size of the inner liner shall be clearly marked on the outside of the liner (e.g., 5-

gallon, 10-gallon, etc.); 

• Bear a permanent, unique identification number that enables the inner liner to be 

tracked;

• Access to the inner liner shall be restricted to employees of the collector;

• The inner liner shall be sealed immediately upon removal from the permanent 

outer container and the sealed inner liner shall not be opened, x-rayed, analyzed, 

or otherwise penetrated; and

• The installation, removal, transfer, and storage of inner liners shall be performed 

under the supervision of two employees of the authorized collector.

36
6.2.1 Retail Pharmacy Participation Rate

The DEA estimates a range of possible participation rates for pharmacies. For the purposes 

of this analysis, the DEA estimates costs at low, medium, and high participation rates.

For the low participation rate estimate, the DEA examined Washington State’s voluntary 

medicine take-back program. As part of the program, participating pharmacies can have a drop 

box where the public can drop-off unwanted medicines that are not controlled substances. The 

program was started in 2006 and currently includes 18 counties. The DEA determined that there 

are 77 pharmacies participating as medicine drop-off locations; while there are 1,074 DEAregistered retail pharmacies in those 18 counties. The participation rate equates to 7.2% 

(77/1,074). The 7.2% participation rate in Washington’s 18 counties is applied as the low 

participation rate estimate for the pharmacies that will become collectors and operate a collection 

receptacle on their registered premises pursuant to the final rule.

The DEA believes the participation rate could be higher. At various conferences and 

industry forums many large chain pharmacies have expressed intent to operate collection 

receptacles on their premises. The combination of this input and the participation data from the 

18 counties in Washington State forms the basis for the medium participation rate estimate. 

Upon closer examination of Washington State’s program, the participation rate of independent 

pharmacies is 11.1% (43 participating locations among 389 registered independent pharmacy 

locations). The four chain pharmacies that participate in Washington State’s program did not 

place drop boxes in all of their stores. For the four chain pharmacies that participated, 34 of 148 

total store locations have drop boxes, establishing a combined participation rate of 23.0%. The 

actions of these chain pharmacies reasonably indicate that chain pharmacies will likely achieve 

the participation rate of 23.0%. Therefore, the medium participation rate is actually a 

37
combination of two participation rates; 11.1% for independent pharmacies and 23.0% for chain 

pharmacies, resulting in a weighted average of 17.6%.

It is possible that the participation rate will be even higher. One of the four chain pharmacies 

participating in Washington State has drop boxes in 22 of its 53 locations, for a 41.5% 

participation rate. 13 Upon promulgation of this rule, increased competition could drive 

participation rates for chain pharmacies higher than 23%. Considering that the percentage of all 

participating chain pharmacies in Washington State that placed receptacles in their stores was 

23.0%, and the highest store participation rate among participating chain pharmacies was 41.5%, 

the upper limit of chain pharmacy participation may be 50%. Similarly, with increased 

participation and competition, independent pharmacies may react by also participating at higher 

rates. The upper limit of independent pharmacy participation is also estimated at 50%. 

Therefore, the high participation rate is 50% for both independent and chain pharmacies, on a 

number of stores basis.

6.2.2 Cost to Pharmacies at Low Participation Rate

The volume of collections for this scenario is 10 pounds of collected controlled substances

every week, with 52 inner liner replacements per year. The DEA estimates that the retail 

pharmacy will incur one-time (non-recurring) costs as well as recurring costs. Non-recurring 

costs consist of one-time initial costs, such as: registration modification, collection receptacle 

acquisition and mounting, signage development, and bar coding equipment. Recurring costs 

include costs of operational material and labor costs, such as: inner liner costs, labor cost of 

receiving, installing, removing, and sealing inner liners, and storing and transferring sealed inner 

13 This chain pharmacy is one of the larger in Washington State and is one of the longest participating pharmacies in this program.

38

 
liners, destruction costs (including transport costs), and biennial inventory cost. The total 

estimated non-recurring cost is $1,819.53; the total estimated annual recurring cost is $2,131.27; 

and the total estimated biennial inventory cost is $4.67. Table 7 itemizes the estimated nonrecurring and recurring costs.

Table 7. Estimated Cost to Retail Pharmacy Operating a Collection Receptacle (Low or Medium Participation Rate)

Activity Description Unit cost*

($) Quantity Amount($)

Non-recurring

Registration modification Pharmacist, 12 minutes 74.32 0.20 14.86 

Collection receptacle Steel drop box 800.00 1 800.00 

Mounting of collection receptacle Labor and material 200.00 1 200.00 

Signage of collection receptacle Pharmacy Technician,

15 minutes 18.68 0.25 4.67 

Barcode scanning equipment Scanner, software, printer 800.00 1 800.00

Total non-recurring 1,819.53

Recurring (annual)

Cost of inner liners $101.48/box of 100** 1.01 52 52.77

Receive, install, remove, seal

inner liner. Transfer sealed 

innerliner..

9 minutes per liner by 2 

employees: Pharmacy 

Technician, Pharmacy Aid

 4.89 52 254.34

Destruction costs Average 10 pound bag 35.00 52 1,820.00 

Barcode tag (ID numbers) $80/1000 0.08 52 4.16

Total recurring (annual) 2,131.27

Recurring (biennial)

Inventory Pharmacy Technician, 

15 minutes 18.68 0.25 4.67 

Total recurring (biennial) 4.67 

* Labor rates include 32.5% load for payroll taxes and benefits. Labor rates are based on Bureau of Labor Statistics May 2012 National 

Occupational Employment and Wage Estimates, www.bls.gov/oes/current/oes_nat.htm.

** $101.48 estimated from a combination of available products.

The estimated costs were annualized by 1) determining the present value of the estimated 

costs for the next 20 years at 3% and 7% discount rates, and 2) determining the equal annualized 

payments for the present values at 3% and 7% interest rates, respectively.

14 The present value 

14 The use of 3% and 7% discount rates for present value calculation, annual payment calculation, and analysis time horizon is based on OMB 

Circular A-4, September 17, 2003. Also “Regulatory Impact Analysis: A Primer” (no date) and “Regulatory Impact Analysis: Frequently Asked 

39

 
and annualized cost at 3% discount and interest rates is $33,562 and $2,256, respectively. The 

present value and annualized cost at 7% discount and interest rates is $24,422 and $2,305, 

respectively.

From table 6 in section 6.1, there are 69,026 affected retail pharmacy registrations (31,402 

independent and 37,624 chain). Applying the 7.2% low participation rate to independent and 

chain pharmacies, the DEA estimates that 4,949 affected pharmacies will operate collection 

receptacles. Applying the annualized cost of $2,305 to the 4,949 anticipated voluntary 

participants, the DEA estimates the total annualized cost for pharmacies that volunteer to operate 

a collection receptacle is $11,408,357. The calculation for the low participation rate is 

summarized in table 8 below.

Table 8. Cost to Pharmacies Operating Collection Receptacles at Low Participation Rate, Annualized Over 

20 Years at a 7 Percent Discount Rate

Pharmacy collection receptacle 

operation cost elements

Number of 

Pharmacies

Percentage 

Participation

Number 

Participation

Cost per 

Participant 

($) Total ($)

Independent pharmacies 31,402 7.2 2,251 2,305 5,190,004

Chain pharmacies 37,624 7.2 2,697 2,305 6,218,353

Total 69,026 4,949 11,408,357

* Figures are rounded

6.2.3 Cost to Pharmacies at Medium Participation Rate

The non-recurring and recurring costs associated with operating a collection receptacle is the 

same at the medium participation rate as at the low participation rate. See table 7. As estimated 

in section 6.2.2, the annualized cost to operate a collection receptacle is $2,305.

Applying the 11.1% participation rate to 31,402 independent pharmacies and the 23.0% 

participation rate to 37,624 chain pharmacies, the DEA estimates that 12,115 affected 

Questions (FAQ)” February 7, 2011, Office of Information and Regulatory Affairs (OIRA). The DEA used a 20 year time horizon for this 

analysis as there is no predetermined end to this rule.

40

 
pharmacies will operate collection receptacles using the combined medium participation rate of 

17.6%. Applying the same annualized cost as the low participation rate of $2,305 to the 12,115 

anticipated voluntary participants, the DEA estimates the total annualized cost for pharmacies 

that volunteer to operate a collection receptacle is $27,927,387. The calculation for the medium 

participation rate is summarized in table 9 below.

Table 9. Cost to Pharmacies Operating Collection Receptacles at Medium Participation Rate, Annualized 

Over 20 Years at a 7 Percent Discount Rate

Pharmacy collection receptacle 

operation cost elements

Number of 

Pharmacies

Percentage 

Participation

Number 

Participation

Cost per 

Participant 

($) Total ($)

Independent pharmacies 31,402 11.1 3,471 2,305 8,002,029

Chain pharmacies 37,624 23.0 8,643 2,305 19,925,358

Total 69,026 12,115 27,927,387

* Figures are rounded

6.2.4 Cost to Pharmacies at High Participation Rate

As in the low and medium participation rates, the total estimated non-recurring cost for 

pharmacies at the high participation rate is $1,819.53; and the total estimated biennial inventory 

cost is $4.67. However, the total annually recurring cost for these pharmacies is estimated to be 

$1,065.64 (versus $2,131.27 for low and medium participation rates). This is because individual 

pharmacies in the “high participation rate” scenario are projected to collect fewer controlled 

substances per pharmacy (resulting in fewer inner liner changes) than pharmacies in the “low 

participation rate” or “medium participation rate” scenarios. A higher percentage of 

participating pharmacies, beyond a certain point, is expected to spread the use of collection 

receptacles across a greater number of locations. 

The low participation rate of 7.2% equates to approximately one in 14 pharmacies 

participating. The medium participation rate of 17.6% equates to approximately one in six 

pharmacies participating. The high participation rate of 50% equates to one in two pharmacies 

41
participating. Under the low participation rate scenario, there will be few collection receptacles, 

and less ultimate users disposing, resulting in more controlled substances collected per collection 

receptacle, or 52 liner replacements per year. If participation increases to one in six pharmacies

(under the medium participation scenario), more controlled substances would be collected, but 

still resulting in 52 liner replacements per year as the market reaches saturation. However, under 

the high participation scenario, the quantity of collected controlled substances is expected to be 

spread across a large number of collection receptacles, resulting in decreased amounts of 

controlled substances per collection receptacle and fewer liner replacements because the market 

reached saturation at the medium participation rate. Thus, for the high participation rate, the 

DEA estimates 26 liner replacements per year. This estimated reduction in liner replacements 

results in a lower annually recurring cost of $1,065.64. Table 10 itemizes the estimated recurring 

costs.

Table 10. Estimated Annually Recurring Cost to Retail Pharmacy Operating a Collection Receptacle (High Participation 

Rate)

Activity Description Unit cost*

($) Quantity Amount($)

Recurring (annual)

Cost of inner liners $101.48 box of 100** 1.01 26 26.38

Receive, install, remove, seal 

inner liner. Transfer sealed inner 

liner.

9 minutes per liner by 

2 employees: Pharmacy 

Technician, Pharmacy Aid

 4.89 26 127.17

Destruction costs Average 10 bound bag 35.00 26 910.00 

Barcode tag (ID numbers) $80/1000 0.08 26 2.08

Total recurring (annual) 1,065.64

* Labor rates include 32.5% load for payroll taxes and benefits. Labor rates are based on Bureau of Labor Statistics May 2012 National 

Occupational Employment and Wage Estimates, www.bls.gov/oes/current/oes_nat.htm.

** $101.48 estimated from a combination of available products.

In summary, the total estimated non-recurring cost is $1,819.53; the total estimated annual 

recurring cost is $1,065.64; and the total estimated biennial inventory cost is $4.67. As in the 

cost for low and medium participation rates, the present value and annualized cost were 

42
determined for the high participation rate. The present value and annualized cost at 3% discount 

and interest rates is $17,708 and $1,190, respectively. The present value and annualized cost at 

7% discount and interest rates is $13,133 and $1,240, respectively.

Applying the 50% participation rate to 69,026 pharmacies, the DEA estimates that 34,513 

pharmacies will voluntarily operate collection receptacles. Applying the annualized cost of 

$1,240 to the 34,513 anticipated participants, the DEA estimates the total annualized cost for 

pharmacies that volunteer to operate a collection receptacle is $42,783,851. The calculation for 

the high participation rate is summarized in table 11 below.

Table 11. Cost to Pharmacies Operating Collection Receptacles at High Participation Rate, Annualized Over 

20 Years at a 7 Percent Discount Rate

Pharmacy collection receptacle 

operation cost elements

Number of 

Pharmacies

Percentage 

Participation

Number 

Participation

Cost per 

Participant 

($) Total ($)

Independent pharmacies 31,402 50.0 15,701 1,240 19,463,658

Chain pharmacies 37,624 50.0 18,812 1,240 23,320,192

Total 69,026 34,513 42,783,851

* Figures are rounded

 

6.3 SCENARIO 2: HOSPITAL/CLINIC WITH ON-SITE PHARMACY COLLECTION 

RECEPTACLE

Hospitals/clinics with on-site pharmacies may get authority from the DEA to install and 

operate a collection receptacle at their registered locations. Based on the estimated range of 

participation rates for retail pharmacies of 7.2% to 50%, the DEA conservatively estimates the 

participation rate for hospitals/clinics with on-site pharmacies to be 50%.

For purposes of this EIA, the DEA assumes that no DEA registered clinics will have on-site 

pharmacies because these clinics do not generally fill controlled substance prescriptions or orders

on premises, and therefore, will not be able to get authority from the DEA to install and operate a 

collection receptacle. For purposes of this EIA, the DEA assumes that all hospitals have on-site

43
pharmacies. As discussed above in section 6.2, the requirements for operating a collection 

receptacle in a hospital are similar to the requirements for a retail pharmacy. The differences in 

monitoring, location, etc. do not incur costs in addition to the costs already calculated for retail 

pharmacies. Accordingly, the cost of operating a collection receptacle at a hospital/clinic with an 

on-site pharmacy is estimated to be the same as a retail pharmacy at the low, medium, or high 

participation rates. 

The DEA estimates the participation rate and the annualized cost of operating a collection 

receptacle in a hospital is 50% and $1,240, respectively. Based on a study performed by an 

industry membership association, there are 5,723 hospitals in the United States. Applying the 

50% participation rate, 2,862 hospitals/clinics are estimated to voluntarily operate collection 

receptacles. Similar to the retail pharmacy scenarios, the DEA estimates the inner liner 

replacement frequency will be influenced by the retail pharmacy participation rate. When the 

pharmacy participation rate is high, 50%, many collection receptacles can be utilized by many

ultimate users, leading to a lower liner replacement frequency. Therefore, the DEA estimates the 

liner replacement frequency at hospitals is 52 times per year when the retail pharmacy 

participation rate is low or medium and 26 times per year when the retail pharmacy participation 

rate is high. 

The cost of operating a collection receptacle at a hospital is estimated to be the same as at a 

retail pharmacy. At the low and medium participation rates for pharmacies, the cost of operating 

a collection receptacle at a hospital is $2,305, and at the high retail pharmacy participation rate

the cost of operating a collection receptacle at a hospital is $1,240. At the low and medium 

pharmacy participation rates, applying the annualized cost of $2,305 to the 2,862 participating 

hospitals, the total cost to hospitals is estimated to be $6,597,716. At an annualized cost of 

44
$1,240 at the high pharmacy participation rate, the estimated annualized cost of collection 

receptacles at hospitals is $3,547,863. The calculations are summarized in table 12 below.

Table 12. Cost to Hospitals with On-site Pharmacies Operating Collection Receptacles at Registered 

Locations

Hospitals with on-site pharmacies collection receptacle 

operation cost elements

Low and medium pharmacy 

participation rate

High pharmacy 

participation rate

Number of affected hospitals 5,723 5,723

Percentage of hospitals with on-site pharmacy 100 100

Number of hospitals with on-site pharmacy 5,723 5,723 

Percentage participation 50 50

Number of hospitals participating 2,862 2,862

Annualized cost per hospital $ 2,305 $ 1,240

Total $ 6,597,716 $ 3,547,863

* Figures are rounded

6.4 SCENARIO 3: LONG-TERM CARE FACILITY COLLECTION RECEPTACLE

In accordance with the rule, a long-term care facility (LTCF) may dispose of controlled 

substances in schedules II, III, IV, and V on behalf of an ultimate user who resides, or has 

resided, at such LTCF by transferring those controlled substances into an authorized collection 

receptacle located at that LTCF. Registered hospitals/clinics with on-site pharmacies, and retail 

pharmacies, are authorized to maintain collection receptacles at LTCFs. In this section, the term 

“pharmacy” is used generically to include retail pharmacies as well as hospitals/clinics with onsite pharmacies. It is important to note that the rule provides additional options for disposal and 

does not prevent any methods currently used by long-term care facilities that are consistent with 

Federal, State, tribal, and local laws and regulations. 

Requirements for operating a collection receptacle at a LTCF are similar to that of a retail 

pharmacy. Some differences include, but are not limited to:

45
• When disposing of such controlled substances by transferring those substances 

into a collection receptacle, such disposal shall occur immediately, but no longer 

than three business days after the discontinuation of use by the ultimate user.

• The installation, removal, transfer, and storage of inner liners shall be performed 

either: by or under the supervision of one employee of the authorized collector 

and one supervisor-level employee of the long-term care facility (e.g., a charge 

nurse or supervisor) designated by the authorized collector; or, by or under the 

supervision of two employees of the authorized collector.

• Upon removal, sealed inner liners may only be stored at the LTCF for up to three 

business days in a securely locked, substantially constructed cabinet or a securely 

locked room with controlled access.

6.4.1 Scenario 3A: Long-Term Care Facility in an Urban or Suburban Location

For this scenario, the LTCF is located in an urban or suburban location where the serving 

pharmacy is one mile away with 20-minutes driving time for one pharmacy employee. To 

transfer sealed inner liners containing collected controlled substances, the managing pharmacy 

arranges for transfer of the controlled substances to the reverse distributor for destruction. 

Although LTCFs have patients that are on many medications, most of these medications are only 

prescribed in short intervals on a dose-by-dose basis. It is also likely that LTCF staff will not be 

disposing of medicine containers in the collection receptacles, just the actual controlled 

substances. Therefore, the volume of controlled substances that will be deposited in the 

collection receptacles is estimated to be 10 pounds of collected controlled substances twice a 

month resulting in 24 inner liner replacements per year. Based on indications that LTCFs wish 

46
to be involved with the collection receptacle operations, the inner liner replacements are assumed 

to be conducted by a pharmacy employee and a supervisory level LTCF employee. 

In this scenario, the DEA estimates that the pharmacy managing the collection receptacle at 

the LTCF will incur the same non-recurring and biennial inventory costs as a pharmacy 

operating a collection receptacle on its own premises, $1,819.53 and $4.67 respectively (see 

table 7). However, the managing pharmacy is estimated to incur $1,264.90 in annually recurring 

costs, which includes the cost of the pharmacy employee’s travel to the LTCF, rather than the 

$1,065.64 or $2,131.27 it is estimated to incur if the receptacle is on its own premises. 

Additionally, the DEA estimates the supervisory level LTCF employee for liner replacements 

will cost $206.57 per year. See table 13 for itemization of the annually recurring costs.

Table 13. Annually Recurring Costs Associated with Operating a Collection Receptacle at a LTCF in an Urban or 

Suburban Location

Activity Description Unit cost*

($) Quantity Amount($)

Recurring (annual) to 

pharmacy

Cost of inner liners $101.48 box of 100** 1.01 24 24.36

Recordkeeping (Receive inner 

liner, log liner information)

1 minute per liner by 

2 employees: pharmacy 

technician, pharmacy aid

0.54 24 13.04

Recordkeeping (Install, 

remove, seal inner liner. 

Transfer sealed inner liner.)

8 minutes per liner by 1 pharmacy 

technician 2.49 24 59.78

Destruction costs Average 10 pound bag 35.00 24 840.00

Barcode tag (ID numbers) $80/1000 0.08 24 1.92

Vehicle cost 1 mile each way at reimbursement 

rate of $0.56/mile 1.12 24 26.88

Travel to LTCF

40 minutes round-trip (20 minutes 

each way) for 

1 employee: pharmacy technician

12.46 24 298.92 

Total annually recurring 

costs to pharmacy 1,264.90

Recurring (annual) to LTCF

Remove, seal inner liner, 

install new liner, and transfer 

8 minutes per liner by 

1 employee: medical and health 8.61 24 206.57

47
inner liner . services managers

Total annually recurring 

cost to LTCF 206.57

* Labor rates include 32.5% load for payroll taxes and benefits. Labor rates are based on Bureau of Labor Statistics May 2012 

National Occupational Employment and Wage Estimates, www.bls.gov/oes/current/oes_nat.htm.

** $101.48 estimated from a combination of available products.

In summary, the total estimated non-recurring cost is $1,819.53; the total estimated annual 

recurring cost is $1,264; and the total estimated biennial inventory cost is $4.67 for the operating 

pharmacy. The estimated costs were annualized as for pharmacies operating a collection 

receptacle on their own premises. The present value and annualized cost at 3% discount and 

interest rates is $20,672 and $1,390, respectively. The present value and annualized cost at 7% 

discount and interest rates is $15,244 and $1,439, respectively. Additionally, the LTCF is 

anticipated to incur an annual cost of $207.

6.4.2 Scenario 3B: Long-Term Care Facility in a Rural Location

This scenario is the same as Scenario 3A, except the LTCF is located in a rural location 

where the serving pharmacy is 35 miles away with 45-minutes driving time for one pharmacy 

employee. Again, to transfer sealed inner liners containing collected controlled substances, the 

managing pharmacy arranges to transfer the controlled substances to the reverse distributor for 

disposal. The volume of collections is assumed to be lower than that in an urban/suburban 

LTCF, with 10 pounds of collected controlled substances every month resulting in 12 inner liner 

replacements per year. The DEA estimates that the pharmacy managing the collection receptacle 

at the rural LTCF will incur the same non-recurring and biennial recurring costs as it would at an

urban/suburban LTCF. However, the reduction in the number of liner replacements lowers the 

cost to operate a collection receptacle in a rural location, while the longer travel distance raises 

the cost. The annually recurring cost to pharmacies operating a collection receptacle at a rural 

48
LTCF is estimated to be $1,276.24. Additionally, the DEA estimates the supervisory level LTCF 

employee for liner replacements will cost $103.29. See table 14 for itemization of these costs.

Table 14. Annual Recurring Costs Associated with Operating a Collection Receptacle at a LTCF in a Rural Location

Activity Description Unit Cost*

($) Quantity Amount($)

Recurring (annual) to 

pharmacy

Cost of inner liners $101.48 box of 100** 1.01 12 12.18

Recordkeeping (receive inner 

liner, log liner information.)

1 minute per liner by 

2 employees: pharmacy 

technician, pharmacy aid

0.54 12 6.52

Recordkeeping (Install, 

remove, seal inner liner. 

Transfer sealed inner liner.)

8 minutes per liner by1 pharmacy 

technician 2.49 12 29.89

Destruction costs Average 10 pound bag 35.00 12 420.00

Barcode tag (ID numbers) $80/1000 0.08 12 0.96

Vehicle cost 35 miles each way at 

reimbursement rate of $0.56/mile 39.20 12 470.40

Travel to LTCF

90 minutes round-trip (45 minutes 

each way) for 1 employee: 

pharmacy technician

48.91 12 336.29

Total annually recurring 

additional costs to pharmacy 1,276.24

Recurring (annual) to LTCF

Remove, seal inner liner, 

install new liner, and transfer 

inner liner.

8 minutes per liner by 

1 employee: medical and health 

services managers

8.61 12 103.29

Total annually recurring 

cost to LTCF 103.29

* Labor rates include 32.5% load for payroll taxes and benefits. Labor rates are based on Bureau of Labor Statistics May 2012 

National Occupational Employment and Wage Estimates, http://www.bls.gov/oes/current/oes_nat.htm.

** $101.48 estimated from a combination of available products.

In summary, the total estimated non-recurring cost is $1,819.53; the total estimated annual 

recurring cost is $1,276.24; and the total estimated biennial inventory cost is $4.67. The 

estimated costs were annualized as in a pharmacy operating a collection receptacle on its own 

premises. The present value and annualized cost at 3% discount and interest rates is $20,841 and 

$1,401, respectively. The present value and annualized cost at 7% discount and interest rates is 

49
$15,365 and $1,450, respectively. Additionally, the LTCF is anticipated to incur an annual cost 

of $103.

6.4.3 Estimated Cost of Long-Term Care Facility Collection Receptacle

The DEA has limited data available to estimate the participation rate for LTCFs, so the DEA 

initially examined the number of pharmacies with automated dispensing systems at LTCFs. 

While automated dispensing systems and collection receptacles have different purposes, they 

both allow the servicing pharmacy and LTCF to provide additional convenience to LTCF 

residents, allow third-party operators to install machines/receptacles on the LTCF’s premises, 

and allow pharmacy employees to service or operate the machine/receptacle on the LTCF’s 

premises.

As of November 2013, there were 682 automated dispensing systems registered with the 

DEA, indicating a 1% participation rate. The DEA believes the rate of LTCFs with collection 

receptacles will be higher because of the comments received in response to the NPRM. 

However, the DEA does not believe the voluntary participation rate would be higher than that of

retail pharmacies. The DEA believes a retail pharmacy has more potential commercial 

advantages from placing a collection receptacle at its own location than at a LTCF. Therefore, 

the DEA believes the voluntary participation rate of LTCFs will not exceed that of retail 

pharmacies, 50% (high estimate). For the purposes of this analysis, the DEA conservatively 

estimates that 50% of LTCFs will have collection receptacles voluntarily operated by pharmacies

or hospitals/clinics with on-site pharmacies. Accordingly, the DEA estimates that 15,800 of 

estimated total of 31,600 LTCFs will allow a pharmacy or hospital/clinic with an on-site 

50
pharmacy to install and operate a collection receptacle at the LTCF. The DEA estimates 76% of 

LTCFs are in urban/suburban areas, and the remaining 24% are in rural areas.15 Applying these 

percentages for the locations of LTCFs anticipated to have collection receptacles, the DEA 

estimates 12,049 LTCFs in urban/suburban locations, and 3,751 LTCFs in rural locations, will 

have collection receptacles. Applying the annualized cost of $1,439 per collection receptacle in 

an urban/suburban location to the 12,049 LTCFs and the $1,450 per collection receptacle in a 

rural location to the 3,751 LTCFs, the DEA estimates the total annualized cost of operating 

15,800 collection receptacles at LTCFs is $22,777,292 to pharmacies. Applying the annual cost 

of $207 to 12,049 urban/suburban LTCFs and applying the $103 to the 3,751 rural LTCFs, the 

total cost to LTCFs is $2,867,417. The estimated total cost of operating collection receptacles at 

LTCFs is $25,653,710. The calculation is summarized in table 15 below.

Table 15. Cost of Operating Collection Receptacles at Long Term Care Facilities, Annualized Over 20 Years 

at a 7 Percent Discount Rate

LTCF collection 

receptacle cost

Number 

of LTCFs

Percentage 

Participation

Number 

Participating

Cost/

Pharmacy 

($)

Cost/

LTCF 

($)

Total Cost:

Pharmacies

($)

Total Cost: 

LTCFs ($) Total ($)

LTCF in 

urban/suburban 

(76% of total) 24,098 50 12,049 1,439 207 17,337,355 2,488,985 19,826,340

LTCF in rural 

(24% of total) 7,502 50 3,751 1,450 103 5,439,937 387,432 5,827,369

Total 31,600 15,800 22,777,292 2,876,418 25,653,710

*Figures are rounded

6.5 SCENARIO 4: MANUFACTURER COLLECTION RECEPTACLE

In this scenario, a manufacturer operates a collection receptacle on-site, primarily for its 

employees. The requirements for operating a collection receptacle by a registered manufacturer 

15 Includes Home Health Agency, Hospice, and Nursing Home.Harris-Kojetin L, Sengupta M, Park-Lee E, Valverde R. Long-term care services 

in the United States: 2013 overview. Hyattsville, MD: National Center for Health Statistics. 2013. 

51

 
are generally same as that for a retail pharmacy operating a collection receptacle on its own 

premises. 

The volume of collections for this scenario is reduced from the retail pharmacy scenario to 

10 pounds of collected controlled substances each month, resulting in 12 inner liner changes per 

year. The collection receptacles in these locations will most likely not be heavily utilized

because manufacturers are generally closed to the general public, and there are relatively few 

employees located at the registered manufacturing facilities. However, in order to prevent 

diversion, and because manufacturers will already be transferring other controlled substances to 

reverse distributors for destruction, the DEA estimates that manufacturers will change the inner 

liners of the receptacles 12 times per year. The DEA’s estimation that 10 pounds of controlled 

substances will be collected each month is a conservative estimate, and was based on the theory

that the inner liners will be able to hold 10 pounds of controlled substances. Also, the DEA 

believes that the manufacturers that will voluntarily place collection receptacles at their 

registered locations will be the larger entities, and therefore have more employees depositing 

controlled substances in the receptacles. 

As in other scenarios, the DEA estimates that the manufacturer will incur non-recurring as 

well as recurring costs. Non-recurring costs consist of one-time initial costs, such as: 

registration modification, collection receptacle acquisition and mounting, signage development, 

and barcoding equipment. Recurring costs consist of operational material and labor costs, such 

as: inner liner costs, labor cost of receiving, installing, removing, and sealing inner liners, and 

storing and transferring sealed inner liners, destruction costs (including transport costs), biennial 

inventory costs, and barcode tags. The total estimated non-recurring cost is $1,820.49; the total 

52
estimated annual recurring cost is $509.31; and the total estimated biennial recurring inventory

cost is $5.29. Table 16 itemizes the estimated non-recurring and recurring costs.

Table 16. Estimated Costs to Manufacturer Operating a Collection Receptacle

Activity Description Unit cost*

($) Quantity Amount($)

Non-recurring

Registration modification General & operation manger, 

15 minutes 60.79 0.25 15.20

Collection receptacle Steel drop box 800.00 1 800.00

Mounting of collection 

receptacle Labor and material 200.00 1 200.00

Signage of collection receptacle

Transportation and material 

moving occupations, 

warehousing and storage 

industry, 15 minutes

21.16 0.25 5.29

Barcode scanning equipment Scanner, software, printer 800.00 1 800.00

Total non-recurring 1,820.49

Recurring (annual)

Cost of inner liners $101.48 box of 100** 1.01 12 12.18

Recordkeeping (Receive, install, 

remove, seal inner liner. 

Transfer sealed inner liner.)

9 minutes per liner by 

2 employees: transportation and 

material moving occupations, 

warehousing and storage 

industry

6.35 12 76.18 

Destruction costs 10 pounds per liner at $2.50 per 

pound 35.00 12 420.00 

Barcode tag (ID numbers) $80/1000 0.08 12 0.96

Total recurring (annual) 509.31

Recurring (biennial)

Inventory

Transportation and material 

moving occupations, 

warehousing and storage 

industry, 15 minutes

21.16 0.25 5.29 

Total recurring (biennial) 5.29 

* Labor rates include 32.5% load for payroll taxes and benefits. Labor rates are based on Bureau of Labor Statistics May 2012 

National Occupational Employment and Wage Estimates, http://www.bls.gov/oes/current/oes_nat.htm

** $101.48 estimated from a combination of available products.

The estimated costs were annualized as in scenario 1 above. The present value and 

annualized cost at 3% discount and interest rates is $9,437 and $634, respectively. The present 

value and annualized cost at 7% discount and interest rates is $7,243 and $684, respectively.

53
As discussed, the DEA anticipates that the level of participation for manufacturers will not be 

as high as pharmacies or hospitals primarily because the collection receptacles would only be 

accessible by the manufacturer’s employees. For the purposes of this analysis, the DEA assumes 

20% (107) of 536 affected manufacturers will operate a collection receptacle at their registered 

locations. At an annualized cost of $684 per manufacturer, the estimated annualized cost for all 

the anticipated participating manufacturers is $73,157. The calculation is summarized in table 

17 below.

Table 17. Cost of Manufacturers Operating Collection Receptacles, Annualized Over 20 Years at a 7 Percent 

Discount Rate

Manufacturer collection 

receptacle operation cost 

elements

Number of 

Manufacturers

Percentage 

Participation

Number 

Participation

Cost per 

Participant 

($) Total ($)

Manufacturers 536 20.0 107 684 73,157

Total 536 107 73,157

* Figures are rounded

6.6 SCENARIO 5: DISTRIBUTOR COLLECTION RECEPTACLE

This scenario is similar to the manufacturer scenario described above. A distributor operates 

a collection receptacle on-site, primarily for its employees. The distributor requirements for 

operating a collection receptacle are the same as that for a manufacturer operating a collection 

receptacle at its registered location. 

The volume of collections and the annualized cost for this scenario is estimated to be the 

same as those for manufacturers, $684. Table 16 itemizes the estimated non-recurring and 

recurring costs.

The DEA anticipates that the level of voluntary participation for distributors will be low

because distributors are generally closed to the general public, and there are relatively few 

employees located at registered distribution facilities. For the purposes of this analysis, the DEA 

assumes 20% (166) of 829 affected distributors will operate a collection receptacle at their 

54
registered locations. At an annualized cost of $684 per affected distributor, the estimated 

annualized cost for all the anticipated participating manufacturers is $113,496. The calculation 

is summarized in table 18 below.

Table 18. Cost of Distributors Operating Collection Receptacles, Annualized Over 20 Years at a 7 Percent 

Discount Rate

Distributor collection 

receptacle operation cost 

elements

Number of 

Manufacturers

Percentage 

Participation

Number 

Participation

Cost per 

Participant 

($) Total ($)

Distributors 829 20.0 166 684 113,496

Total 829 166 113,496

* Figures are rounded

6.7 SCENARIO 6: NARCOTIC TREATMENT PROGRAM COLLECTION 

RECEPTACLE

In this scenario, a NTP operates a collection receptacle on-site, primarily for its patients. The 

requirements for operating a collection receptacle at a NTP are that the collection receptacle shall 

be located in a room that does not contain any other controlled substances and is securely locked 

with controlled access. None of the additional requirements for a collection receptacle at a NTP 

would incur an additional cost because NTPs already have several securely locked, controlledaccess rooms that do not contain controlled substances for counseling patients, office space, and 

other purposes.

As discussed in the final rule, the DEA is permitting those entities registered as NTPs to 

become authorized collectors to manage collection receptacles at their registered locations. 

NTPs help those seeking substance abuse treatment, and many, as a condition of obtaining 

treatment, require patients to dispose of the pharmaceutical controlled substances that they abuse. 

However, NTPs are generally closed to the general public. Therefore, the volume of collections 

for this scenario is reduced from the retail pharmacy scenario to 10 pounds of collected 

pharmaceutical controlled substances twice a month, 24 inner liner replacements per year. 

55
As in other scenarios, the DEA estimates that the NTP will incur non-recurring as well as 

recurring costs. Non-recurring costs consist of one-time initial costs, such as: registration 

modification, collection receptacle acquisition and mounting, signage development, and 

barcoding equipment. Recurring costs consist of operational material and labor costs, such as: 

inner liner costs, labor cost of receiving, installing, removing and sealing inner liners, and storing 

and transferring sealed inner liners, destruction costs (including transport costs), biennial 

inventory costs, and barcode tags. The total estimated non-recurring cost is $1,817.42; the total 

estimated annual recurring cost is $996.11; and the total estimated biennial recurring inventory 

cost is $4.51. Table 19 itemizes the estimated non-recurring and recurring costs.

Table 19. Estimated Costs to NTPs Operating Collection Receptacles

Activity Description Unit cost*

($) Quantity Amount($)

Non-recurring

Registration modification

Medical and health 

services managers, 

12 minutes

64.55 0.20 12.91

Collection receptacle Steel drop box 800.00 1 800.00

Mounting of collection receptacle Labor and material 200.00 1 200.00

Signage of collection receptacle

Healthcare support 

occupation, 15 

minutes

18.03 0.25 4.51

Barcode scanning equipment Scanner, software, 

printer 800.00 1 800.00

Total non-recurring 1,817.42

Recurring (Annual)

Cost of inner liners $101.48 for box of 

100 1.01 24 24.36

Recordkeeping (Receive, install, 

remove, seal inner liner. Transfer sealed 

inner liner).

9 minutes per liner by 

2 employees: 

healthcare support 

occupations

5.41 24 129.84

Destruction Costs Average 10 pound 

bag 35.00 24 840.00

Barcode tag (ID numbers) $80/1000 0.08 24 1.92

Total recurring (annual) 996.11

56
Recurring (biennial)

Biennial inventory

Healthcare support 

occupation, 15 

minutes

18.03 0.25 4.51

Total recurring (biennial) 4.51

* Labor rates include 32.5% load for payroll taxes and benefits.

The estimated costs were annualized as in pharmacies operating a collection receptacle on 

their own premises above in section 6.2. The present value and annualized cost at 3% discount 

and interest rates is $16,670 and $1,120, respectively. The present value and annualized cost at 

7% discount and interest rates is $12,393 and $1,170 respectively.

For reasons expressed above, the DEA assumes that 75% of NTPs will operate a collection 

receptacle at an annualized cost of $1,170. As of November 2013, there were 1,332 NTPs 

registered with the DEA. Applying the 75% participation rate, 999 NTPs are estimated to 

voluntarily operate collection receptacles. At an annualized cost of $1,170, the estimated 

annualized cost of collection receptacles at NTPs is $1,168,674. The calculation is summarized

in table 20 below.

Table 20. Cost of NTPs Operating Collection Receptacles, Annualized Over 20 Years at a 7 Percent Discount 

Rate

NTP collection receptacle 

operation cost elements

Number of 

NTPs

Percentage 

Participation

Number 

Participation

Cost per 

Participant 

($) Total ($)

NTPs 1,332 75.0 999 1,170 1,168,674

Total 1,332 999 1,168,674

* Figures are rounded

6.8 SCENARIO 7: MAIL-BACK PROGRAM

A mail-back program may be conducted by law enforcement or any authorized collector that 

has and utilizes an on-site method of destruction. Collectors or law enforcement that conduct a 

mail-back program shall make packages available (for sale or for free) as specified in the final 

rule to ultimate users and persons lawfully entitled to dispose of an ultimate user decedent’s 

57
property, for the collection of pharmaceutical controlled substances by U.S. Mail, or common or 

contract carrier. Package requirements to operate a mail-back program include, but are not 

limited to:

• The package shall be nondescript and shall not include any markings or other 

information that might indicate that the package contains controlled substances;

• The package shall be water- and spill-proof; tamper-evident; tear-resistant; and 

sealable;

• The package shall be preaddressed with and delivered to the collector’s registered 

address with the on-site method of destruction or the participating law 

enforcement’s physical address;

• The cost of shipping the package shall be postage paid;

• The package shall have a unique identification number that enables the package to 

be tracked; and

• The package shall include instructions for the user that indicate the process for 

mailing back the package, the permitted substances that can be sent, notice that 

packages may only be mailed from within the customs territory of the United 

States (the 50 States, the District of Columbia, and Puerto Rico), and notice that 

only packages provided by the collector will be accepted for destruction.

Additional requirements for a collector operating a mail-back program:

• Accept only those controlled substances contained within packages that the 

collector made available for the collection of controlled substances by mail and 

packages that are lawfully forwarded to the authorized collector;

58
• Within three business days of receipt, notify the Field Division Office of the 

Administration in their area of the receipt of a package that likely contains 

controlled substances that the collector did not make available or did not agree to 

receive; and

• Only law enforcement and employees of the collector shall handle packages 

received through an authorized mail-back program.

This scenario details a single sample program of 500 empty mail-back packages provided to 

local pharmacies, grocery stores, and other retail establishments, with the 500 sealed packages 

received and destroyed five at a time, 100 times per year. The DEA estimates that the collector

will incur one-time (non-recurring) costs as well as recurring costs. Non-recurring costs consist 

of one-time initial costs, such as: registration modification, barcode scanning equipment, and 

instruction insert development, totaling $899.84. The DEA estimates that the collector will be 

able to destroy the collected controlled substances with other controlled substances, and any 

additional cost of destruction is not material. Recurring costs include various material and labor 

costs as identified in table 21. The total estimated annual recurring cost is $3,696.95; and the 

total estimated biennial recurring inventory cost is $5.29. Additionally, the DEA estimates that 

there will be a cost to the public of $931.36 for reading the mail-back instructions. Table 21

itemizes the estimated non-recurring and recurring costs.

59
Table 21. Estimated Costs to Conduct a Mail-Back Program

Activity Description Unit Cost*

($) Quantity Amount($)

Non-recurring

Registration modification General & operation manager, 

15 minutes 60.79 0.25 15.20 

Barcode scanning equipment Scanner, software, printer 800.00 1 800.00 

Develop instruction inserts

Transportation and material 

moving occupations, warehousing 

and storage industry, 4 hours

 21.16 4 84.64 

Total non-recurring 899.84

Recurring (annual)

Mail-back packages $4.50 for box of 50 0.09 500 45.00 

Postage/shipping Conservative estimate 4.00 500 2,000.00 

Address labels $14 for box of 750 0.02 500 9.33 

Preaddress, setup and print

Transportation and material 

moving occupations, warehousing 

and storage industry, once per

year, 15 minutes

 21.16 0.25 5.29 

Paper for instructions $6 per ream of 500 pages 0.01 500 6.00 

Insertion of instructions and 

affix address label for each 

package

Transportation and material 

moving occupations, warehousing 

and storage industry, 1 hour per 

500 packages

 0.04 500 21.16 

Barcode tag (ID numbers) $80/1000 0.08 500 40.00 

Packages provided to 3rd party 

locations such as pharmacies, 

grocery stores, etc.

Transportation and material 

moving occupations, warehousing 

and storage industry, 10 minutes

per 100 packages

 0.04 500 17.63 

Packages received and stored 

until destruction

Transportation and material 

moving occupations, warehousing 

and storage industry, received 5 at 

a time, 5 minutes for each 

5 packages

 0.35 500 176.34 

60
Activity Description Unit Cost*

($) Quantity Amount($)

Packages moved from storage 

to destruction.

Transportation and material 

moving occupations, warehousing 

and storage industry, 5 minutes 

per packages, 100 times per year

 1.76 100 176.34 

Fill out destruction form, DEA41

Transportation and material 

moving occupations, warehousing 

and storage industry, 30 minutes, 

100 times per year

10.58 100 1,058.01 

Notify DEA of unsolicited 

packages received

General & operation manager, 

10 minutes for initial 

call + 60 minutes for follow-on 

visit, twice per year

 70.92 2 141.85 

Total recurring (annual) 3,696.95 

Recurring (biennial)

Inventory

Transportation and material 

moving occupations, warehousing 

and storage industry, 15 minutes

 21.16 0.25 5.29 

Total recurring (biennial) 5.29 

Recurring (annual) - public 

 Time to read instruction 00-0000 all occupations, 

5 minutes 1.86 500 931.36

 Total recurring (annual) –

public 931.36

The estimated costs were annualized. The present value and annualized cost to the registrant 

at 3% discount and interest rates is $55,940 and $3,760, respectively. The present value and 

annualized cost at 7% discount and interest rates is $40,092 and $3,784, respectively. The 

present value and annualized cost to the public is $931. 

Having an on-site destruction facility is a requirement to voluntarily implement the mail-back 

program. In an effort to be conservative, the DEA estimates all 10 reverse distributors with onsite destruction facilities will voluntarily implement a mail-back program. The calculation is 

summarized in table 22 below.

61
Table 22. Cost of Reverse Distributors Operating Mail-back Program, Annualized Over 20 Years at a 7 

Percent Discount Rate

Mail-back 

program cost

Number 

Participating

Cost per 

Reverse 

Distributor 

($)

Cost to 

Public per 

Participant 

($)

Total Cost to 

Reverse 

Distributor 

($)

Total 

Cost to 

Public ($) Total ($)

Reverse Distributors 

(with on-site 

destruction) 10 3,784 931 37,844 9,314 47,158

Total 10 37,844 9,314 47,158

*Figures are rounded

62
CHAPTER 7: SUMMARY OF COSTS

This rule implements mandatory requirements for manufacturers, distributors, and reverse 

distributors, and it allows certain registrants to voluntarily participate in collection activities by 

following specified requirements. Chapter 5 estimated the cost of the mandatory requirements 

for certain registrants, the 30-day and two-person requirements for reverse distributors and the 

two-person requirement for manufacturers and distributors. This portion of the rule is estimated 

to cost $2,719,319 annually. Additionally, the DEA estimated the level of participation and the 

cost of voluntary participation in accordance with the rule, using the following methods of 

voluntary participation:

• Pharmacies operating collection receptacles at their registered locations;

• Hospitals/clinics with on-site pharmacies operating collection receptacles at their

registered locations;

• Pharmacies and hospitals/clinics with on-site pharmacies operating collection receptacles

on LTCF premises;

• Manufacturers operating collection receptacles at their registered locations;

• Distributors operating collection receptacles at their registered locations;

• NTPs operating collection receptacles at their registered locations; and

• Reverse distributors with on-site destruction facilities operating mail-back programs;

16,17

The DEA performed a discounted cash flow analysis of the costs associated with this rule, 

over 20 years and 7% discount rate. The non-recurring costs are estimated to occur in ‘Year 0’ 

16 The DEA does not expect reverse distributors to operate collection receptacles at their registered locations because, generally, they have a small 

number of employees at these locations and the collection receptacles would most likely not be utilized. 17 Even though law enforcement agencies may continue to collect controlled substances from ultimate users, law enforcement agencies are not 

collectors, and they were not included in this analysis. The Disposal Act’s implementing regulations do not cause a direct economic impact on 

law enforcement agencies. Law enforcement agencies had, and continue to have, autonomy regarding their collection activities.

63

 
and recurring costs begin in ‘Year 1’. The DEA estimates the present value of the total 

(mandatory and voluntary) cost of this rule is $475,637,202, $650,640,037, and $775,719,439. 

These present values equate to $44,896,787, $61,415,817, and $73,222,427 annualized costs, at 

low, medium, and high pharmacy participation rates, respectively. Table 23 below contains a 

summary of all costs in a discounted cash flow format.

Table 23. Summary of Costs at High Voluntary Participation Rates, Over 20 Years at a 7 Percent Discount 

Rate

The same discounted cash flow analysis was performed for low and medium pharmacy 

participation rates.

Cost of Voluntary Participation per Participant Year 0 Year 1 Year 2 Year 3 Year 4 Year 20

Pharmacy/Hospitals with onsite pharmacies 1,820 1,066 1,070 1,066 1,070 ... 1,070

Manufacturer/Distributor 1,820 509 515 509 515 ... 515

Long Term Care Facility (Suburban) 1,820 1,265 1,270 1,265 1,270 ... 1,270

Long Term Care Facility (Rural) 1,820 1,276 1,281 1,276 1,281 ... 1,281

Narcotic Treatment Program 1,817 996 1,001 996 1,001 ... 1,001

Mail-back (Reverse Distributor) 900 3,697 3,702 3,697 3,702 ... 3,702

Mail-back (Public) - 931 931 931 931 ... 931

...

Number of Participants (@ high pharmacy 

participation rate)

Year 0 Year 1 Year 2 Year 3 Year 4 ... Year 20

Pharmacy 34,513 34,513 34,513 34,513 34,513 ... 34,513 

Hospitals 2,862 2,862 2,862 2,862 2,862 ... 2,862 

Manufacturer 107 107 107 107 107 ... 107 

Distribuutor 166 166 166 166 166 ... 166 

LTCF (Suburban) 12,049 12,049 12,049 12,049 12,049 ... 12,049 

LTCF (Rural) 3,751 3,751 3,751 3,751 3,751 ... 3,751 

NTP 999 999 999 999 999 ... 999 

Mail-back (RD) 10 10 10 10 10 ... 10 

Mail-back (Public) 1 1 1 1 1 ... 1 

...

Cost of Voluntary Participation Year 0 Year 1 Year 2 Year 3 Year 4 ... Year 20

Pharmacy 62,797,593 36,778,329 36,939,526 36,778,329 36,939,526 ... 36,939,526 

Hospitals 5,207,508 3,049,853 3,063,220 3,049,853 3,063,220 ... 3,063,220 

Manufacturer 194,792 54,497 55,063 54,497 55,063 ... 55,063 

Distribuutor 302,201 84,546 85,424 84,546 85,424 ... 85,424 

LTCF (Suburban) 21,923,480 15,240,747 15,297,023 15,240,747 15,297,023 ... 15,297,023 

LTCF (Rural) 6,825,165 4,787,226 4,804,746 4,787,226 4,804,746 ... 4,804,746 

NTP 1,815,602 995,118 999,622 995,118 999,622 ... 999,622 

Mail-back (RD) 8,998 36,969 37,022 36,969 37,022 ... 37,022 

Mail-back (Public) - 931 931 931 931 ... 931 

Total Voluntary 99,075,339 61,028,217 61,282,578 61,028,217 61,282,578 ... 61,282,578 

Total Mandatory 2,719,319 2,719,319 2,719,319 2,719,319 ... 2,719,319 

Grand Total 99,075,339 63,747,536 64,001,898 63,747,536 64,001,898 ... 64,001,898 

Present Value of Cost (7% discount rate, 20 years) 775,719,439 

Annualized Cost (7%, 20 years) (73,222,427)

64
CHAPTER 8: IMPACT ON SMALL ENTITIES

To comply with the RFA, the DEA conducted a preliminary analysis to determine whether 

the final rule will have a significant economic impact on a substantial number of small entities.

8.1 CRITERIA FOR “SIGNIFICANT” ECONOMIC IMPACT

When there are no special considerations for “significant economic impact” or criteria 

prescribed by external sources, the DEA uses a revenue-based criterion. Table 24 summarizes 

the general criteria for “significant” economic impact.

For the purposes of this analysis, the revenue-based general criteria is used, where if the cost 

of the rule is greater than 1% of annual revenue, the rule has a “significant” economic impact on 

the business.

Table 24. General Criteria for "Significant" Economic Impact

Criteria Basis Criteria Result

Revenue-based

<1% of annual revenue Not significant economic impact

1% to 3% of annual revenue Possible significant economic impact

>3% of annual revenue Significant economic impact

8.2 ANALYSIS

8.2.1 Manufacturers

As discussed in section 5.2.2, the DEA estimates that 536 manufacturer registrations 

correspond to 439 entities, of which 423 are small entities. Manufacturers are affected by the 

mandatory two-person transportation requirement. 

As discussed in sections 5.3.6 and 6.5, the annualized costs of the two-person transportation

requirement and the operation of a collection receptacle are $3,621 and $684, respectively, or 

$4,305 total for the manufacturers affected by the mandatory portion of the rule that may also 

volunteer to operate a collection receptacle. The combined annualized cost of $4,305 is 

compared to revenue. If the combined cost is less than 1% of revenue, neither of the components 

65
alone will be greater than 1% of revenue. In order to estimate the average revenue per 

establishment, the DEA used the Economic Census. The “total value of shipments” is divided by 

the number of establishments for each employment size category. Employment size data is 

available for manufacturers according to the number of establishments. Therefore, the number 

of establishments by employment size is used to estimate the number of affected manufacturer

entities that are small entities. The combined mandatory and voluntary participation cost of 

$4,305 is expressed as a percentage of average total value of shipments per establishment. This 

analysis shows that the cost as a percentage of average total value of shipments per establishment 

is less than 1% for all employment size categories. Therefore, none of the small manufacturer 

entities are anticipated to be significantly impacted by this rule. Table 25 details the analysis 

conducted.

66
Table 25. Cost to Manufacturers as Percentage of Total Value of Shipment per Establishment

Note: “D – withheld to avoid disclosing data for individual companies; data are included in higher level totals”

8.2.2 Distributors

As discussed in section 5.2.2, the DEA estimates that 829 distributor registrations correspond 

to 585 entities, of which 555 are estimated to be small entities. Distributors are also affected by 

the mandatory two-person transportation requirement. 

As discussed in sections 5.3.7 and 6.6, the annualized costs of the two-person transportation 

requirement and operating a collection receptacle are $3,621 and $684, respectively, or $4,305 

2007 NAICS 

code Employment size

Number 

of 

establish

ments

SBA size 

standard (# 

of 

employees)

Number of 

establishm

ents below 

SBA size 

standards

Total value 

of 

shipments 

($1,000)

Average total 

value of 

shipments per 

establishment 

($1,000)

Cost of 

mandatory 

portion of rule 

($1,000)

Cost of 

voluntary 

participation 

($1,000)

Total cost per 

establishment 

($1,000)

% Total cost 

of total value 

of shipments 

per 

establishment

All establishments 410 11,316,752

Establishments with 0 to 4 

employees 161 161 D N/A N/A N/A N/A N/A

Establishments with 5 to 9 

employees 51 51 209,910 4,116 3.62 0.68 4.31 0.10%

Establishments with 10 to 19 

employees 42 42 325,815 7,758 3.62 0.68 4.31 0.06%

Establishments with 20 to 49 

employees 58 58 665,295 11,471 3.62 0.68 4.31 0.04%

Establishments with 50 to 99 

employees 40 40 1,029,811 25,745 3.62 0.68 4.31 0.02%

Establishments with 100 to 

249 employees 38 38 2,039,701 53,676 3.62 0.68 4.31 0.01%

Establishments with 250 to 

499 employees 13 13 2,980,631 229,279 3.62 0.68 4.31 0.00%

Establishments with 500 to 

999 employees 5 3 3,127,159 625,432 3.62 0.68 4.31 0.00%

Establishments with 1,000 to 

2,499 employees 1 0 D N/A N/A N/A N/A N/A

Establishments with 2,500 

employees or more 1 0 D N/A N/A N/A N/A N/A

All establishments 991 142,876,257

Establishments with 0 to 4 

employees 284 284 239,929 845 3.62 0.68 4.31 0.51%

Establishments with 5 to 9 

employees 124 124 344,727 2,780 3.62 0.68 4.31 0.15%

Establishments with 10 to 19 

employees 77 77 429,214 5,574 3.62 0.68 4.31 0.08%

Establishments with 20 to 49 

employees 163 163 1,998,457 12,260 3.62 0.68 4.31 0.04%

Establishments with 50 to 99 

employees 86 86 7,900,874 91,871 3.62 0.68 4.31 0.00%

Establishments with 100 to 

249 employees 114 114 13,656,361 119,793 3.62 0.68 4.31 0.00%

Establishments with 250 to 

499 employees 68 68 31,271,474 459,875 3.62 0.68 4.31 0.00%

Establishments with 500 to 

999 employees 53 27 34,060,606 642,653 3.62 0.68 4.31 0.00%

Establishments with 1,000 to 

2,499 employees 15 0 15,064,345 1,004,290 3.62 0.68 4.31 0.00%

Establishments with 2,500 

employees or more 7 0 37,910,270 5,415,753 3.62 0.68 4.31 0.00%

Total 1,401 1,349

96.3%

325412 - 

Pharmaceutical 

preparation 

manufacturing

 750

 750

% below SBA size standards

325411 - 

Medicinal and 

botanical 

manufacturing

67
for the distributors affected by the mandatory portion of the rule that may also volunteer to 

operate a collection receptacle. The combined annualized cost of $4,305 is compared to revenue. 

If the combined cost is less than 1% of revenue, neither of the components alone will be greater 

than 1% of revenue. Similar to the manufacturer analysis, Economic Census data was utilized. 

Employment size data is available for distributors according to the number of firms,18 as well as 

the number of establishments. However, this analysis is conducted on a per establishment basis, 

rather than per firm, to account for firms with multiple establishments and to make each 

establishment equally likely to participate. Accordingly, “sales” is divided by the number of 

establishments for each employment size category to estimate the average sales per 

establishment. The combined mandatory and voluntary participation cost of $4,305 is then 

expressed as a percentage of average sales per establishment. This analysis shows that the cost 

as a percentage of average total sales per establishment is less than 1% for all employment size 

categories. Therefore, none of the small distributor entities are anticipated to be significantly 

impacted by this rule. Table 26 details the analysis conducted.

18 Firm—A firm is a business organization consisting of one or more domestic establishments in the same State and industry that were specified 

under common ownership or control. The firm and the establishment are the same for single-establishment firms. For each multi-establishment 

firm, establishments in the same industry within a State will be counted as one firm- the firm employment and annual payroll are summed from 

the associated establishments. http://www.census.gov/econ/susb/definitions.html. The 2007 Economic Census uses the term, “firm” to describe 

businesses. There are technical differences in the definition; however, any difference is expected to have no impact on the analysis. For the 

purposes of this analysis, “firm,” “business,” and “entity” are used synonymously.

68

 
Table 26. Cost to Distributors as Percentage of Total Value of Shipment per Establishment

8.2.3 Reverse Distributors

As discussed in section 5.2.2, the DEA estimates that 60 reverse distributor registrations 

correspond to 55 entities, of which 38 are estimated to be small entities. Each of the component 

costs was combined to estimate the total cost impact of the mandatory and voluntary portions of 

the rule for each affected entity. The total cost was compared to the estimated annual revenue 

for each of the small entities. The economic impact of the rule is estimated to be significant, 

greater than 1% of annual revenue, for two of the 38 affected (5%) small entities.

8.2.4 Narcotic Treatment Programs

As discussed in section 6.1, the DEA estimates that 1,332 NTP registrations correspond to 

656 entities, of which 610 are estimated to be small entities. As discussed in section 6.7, 999

NTP are estimated to volunteer to operate a collection receptacle at an annualized cost of $1,170. 

The analysis to determine the percentage of significantly affected small entity NTPs is conducted 

using information in the Economic Census for NAICS code 621420—Outpatient mental health 

and substance abuse centers. The resulting percentage of small firms with significant impact is 

2007 NAICS 

code Employment size

Number 

of firms

SBA size 

standard (# 

of 

employees)

Number of 

firms 

below 

SBA size 

standards

Number of 

establishments

Sales 

($1,000)

Average sales 

per 

establishment 

($1,000)

Cost of 

mandatory 

portion of rule 

($1,000)

Cost of 

voluntary 

participation 

($1,000)

Total cost per 

establishment 

($1,000)

% Total cost 

of sales per 

establishment

Firms operated for 

the entire year 5,430 7,700 560,484,712

Firms operated 

entire year with less 

than 5 employees 2,652 2,652 2,663 2,820,937 1,059 3.62 0.68 4.31 0.41%

Firms operated 

entire year with 5 to 

9 employees 1,022 1,022 1,049 3,569,196 3,402 3.62 0.68 4.31 0.13%

Firms operated 

entire year with 10 

to 19 employees 724 724 766 4,958,834 6,474 3.62 0.68 4.31 0.07%

Firms operated 

entire year with 20 

to 49 employees 555 555 599 10,157,353 16,957 3.62 0.68 4.31 0.03%

Firms operated 

entire year with 50 

to 99 employees 202 202 302 12,241,218 40,534 3.62 0.68 4.31 0.01%

entire year with 100 

employees or more 275 2321 526,737,174 226,944 3.62 0.68 4.31 0.00%

Total 5,430 5,155

% below SBA size standards 94.9%

100

424210 - 

Drugs and 

druggists' 

sundries 

merchant 

wholesalers

69
applied to the number of affected small NTP entities to determine the number of significantly 

impacted small entities. 

Using the revenue profile from the 2007 Economic Census, the DEA calculated the average 

revenue per establishment. The analysis is conducted on a per establishment basis, rather than 

per firm, to account for firms with multiple establishments to and make each establishment 

equally likely to participate. The cost was greater than 1% of revenue for the 518 firms in the 

census data with annual “revenue less than $100,000.” Since the DEA estimates a participation 

rate of 75%, 75% of the firms in the census data would be significantly impacted, or 389 out of 

518. The 389 firms equate to 10.2% of all small firms in the NAICS code 621420 – Outpatient

mental health and substance abuse centers. Table 27 details this analysis. Applying the 10.2% 

to the 610 estimated NTPs that are small entities, the DEA estimates that the economic impact of 

voluntary participation will be significant for 62 small NTP entities.

70
Table 27. Cost to NTP as Percentage of Revenue per Establishment

Note: “D – withheld to avoid disclosing data for individual companies; data are included in higher level totals”

8.2.5 Hospitals/Clinics with On-Site Pharmacy

As discussed in section 6.1, the DEA estimates that 5,723 hospitals/clinics with on-site 

pharmacies correspond to 3,068 entities, of which 1,346 are estimated to be small entities. 

Hospitals/clinics with on-site pharmacies can have three possible collection receptacle locations: 

hospital clinic with on-site pharmacy, urban/suburban LTCF, and rural LTCF. However for the 

purposes of the small entity analysis, the activity with the highest cost, the $2,305 cost of 

operating the collection receptacles on-site, is conservatively evaluated as a percentage of annual 

revenue. Using the revenue profile from the 2007 Economic Census, the DEA estimated the 

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number 

of firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms 

below 

SBA size 

standards

Number of 

establishments

Receipts/ 

Revenue 

($1,000)

Average 

revenue per 

establishment 

($1,000)

Cost of 

voluntary 

participation 

($1,000)

% Cost of 

revenue per 

establishment

# of firms where 

cost is >1% of 

revenue @75% 

participation 

rate

Firms operated for the entire 

year 4,113 8,353 11,955,393

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 518 518 520 27,697 53 1.17 2.2% 389

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 641 641 652 105,312 162 1.17 0.7% 0

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 487 487 514 178,683 348 1.17 0.3% 0

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 594 594 655 423,660 647 1.17 0.2% 0

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 761 761 1,222 1,240,595 1,015 1.17 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 447 447 1,116 1,607,649 1,441 1.17 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 378 378 1,352 2,683,147 1,985 1.17 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to $24,999,999 234 0 1,483 3,525,007 2,377 1.17 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to $49,999,999 45 0 618 1,468,271 2,376 1.17 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to $99,999,999 6 0 137 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 2 0 84 D N/A N/A N/A N/A

Total 4,113 3,826 8,353 389

93.0% 10.2%

Total

% of small firms

 10.0

621420 - 

Outpatient 

mental health 

and substance 

abuse centers

% NTP below SBA size standards

71
percentage of establishments where the cost of the rule is 1% or more than annual revenue for 

each of NAICS codes 621491—HMO medical centers, 622110—General medical and surgical 

hospitals, and 622310—Specialty (except psychiatric and substance abuse) hospitals. This 

percentage was then applied to the affected registrants to determine the number of registrants 

with economic impact greater than 1% of annual revenue.

Following the same steps described for NTPs above, the DEA estimates 0.0% of small 

hospitals/clinics in the census data will be significantly impacted by the rule. Table 28 contains 

the details of the analysis. Applying the 0.0% to the 1,346 estimated small entities, the DEA 

estimates that the economic impact will be significant for zero small hospital/clinic entities. 

Revenue data for many of the revenue ranges were withheld by the data provider to avoid 

disclosing data for individual companies. However, utilizing the figures for all “Firms operated 

for the entire year,” net of the reported figures, the DEA evaluated the cost as a percentage of 

annual revenue for the combined revenue ranges where revenue data was withheld. The 

economic impact is less than 1% for the combined revenue ranges where revenue data was 

withheld for all three NAICS codes. Therefore, the DEA believes the data, had it been available, 

would not change the overall evaluation. 

72
Table 28. Cost to Hospital/Clinic with On-site Pharmacy as Percentage of Revenue per Establishment

(Continued on next page.)

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number 

of firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms 

below 

SBA size 

standards

Number of 

establishments

Receipts/ 

Revenue 

($1,000)

Average 

revenue per 

establishment 

($1,000)

Cost of 

voluntary 

participation 

($1,000)

% Cost of 

revenue per 

establishment

# of firms where 

cost is >1% of 

revenue @50% 

participation 

rate

Firms operated for the entire 

year 30 516 5,361,166

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 0 0 0 0 N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 5 5 5 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 4 4 4 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 3 3 3 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 2 2 7 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 2 2 2 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 1 1 1 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to $24,999,999 2 2 5 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to $49,999,999 4 2 37 138,469 3,742 2.31 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to $99,999,999 0 0 0 0 N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 7 0 452 D N/A N/A N/A N/A

Firms without reported 

revenue ("D" combined) 26 479 5,222,697 10,903 2.31 0.0%

621491 - 

HMO 

medical 

centers

 30.0

73
(Continued on next page.)

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number 

of firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms 

below 

SBA size 

standards

Number of 

establishments

Receipts/ 

Revenue 

($1,000)

Average 

revenue per 

establishment 

($1,000)

Cost of 

voluntary 

participation 

($1,000)

% Cost of 

revenue per 

establishment

# of firms where 

cost is >1% of 

revenue @50% 

participation 

rate

Firms operated for the entire 

year 3,051 5,077 657,110,475

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 0 0 0 0 N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 2 2 2 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 1 1 1 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 0 0 0 0 N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 18 18 18 35,355 1,964 2.31 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 117 117 117 455,242 3,891 2.31 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 316 316 316 2,370,826 7,503 2.31 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to $24,999,999 613 613 619 9,841,428 15,899 2.31 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to $49,999,999 436 218 444 15,504,169 34,919 2.31 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to $99,999,999 416 0 444 29,553,509 66,562 2.31 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 1,132 0 3,116 599,349,144 192,346 2.31 0.0% 0

Firms without reported 

revenue ("D" combined) 3 3 802 267 2.31 0.9%

 35.5

622110 - 

General 

medical and 

surgical 

hospitals

74
Note: “D – withheld to avoid disclosing data for individual companies; data are included in higher level totals”

8.2.6 Retail Pharmacies

As discussed in section 6.1, the DEA estimates that 69,026 retail pharmacy registrations 

correspond to 29,582 entities, of which 29,328 are estimated to be small entities. Similar to 

hospitals/clinics with on-site pharmacies, retail pharmacies can also have three possible 

collection receptacle locations: on-site at the retail pharmacy, urban/suburban LTCF, and rural 

LTCF. However for the purposes of the small entity analysis, the cost scenario with the highest 

number of pharmacies significantly affected is used, 50% participation operating on-site 

collection receptacles at an annualized cost of $1,240. The $1,240 cost of operating a collection 

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number 

of firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms 

below 

SBA size 

standards

Number of 

establishments

Receipts/ 

Revenue 

($1,000)

Average 

revenue per 

establishment 

($1,000)

Cost of 

voluntary 

participation 

($1,000)

% Cost of 

revenue per 

establishment

# of firms where 

cost is >1% of 

revenue @50% 

participation 

rate

Firms operated for the entire 

year 352 811 28,271,443

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 0 0 0 0 N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 0 0 0 0 N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 0 0 0 0 N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 1 1 1 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 7 7 7 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 27 27 27 102,723 3,805 2.31 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 49 49 50 360,808 7,216 2.31 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to $24,999,999 73 73 77 1,236,933 16,064 2.31 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to $49,999,999 86 43 119 3,130,772 26,309 2.31 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to $99,999,999 55 0 89 3,821,692 42,940 2.31 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 54 0 441 19,603,305 44,452 2.31 0.0% 0

Firms without reported 

revenue ("D" combined) 8 8 15,210 1,901 2.31 0.1%

Total 3,433 1,506 6,404 0

43.9% 0.0%

Total

% of small firms

 35.5

% Hospital/clinic below SBA size standards

622310 - 

Specialty 

(except 

psychiatric 

and 

substance 

abuse) 

hospitals

75
receptacle on-site is evaluated as a percentage of annual revenue. The analysis to determine the 

percentage of significantly affected small entities is conducted utilizing information in the 

Economic Census for NAICS code 446110—Pharmacies and drug stores. The resulting 

percentage of small firms with significant impact is applied to the number of affected small retail 

pharmacy entities to determine the number of significantly impacted entities. 

Using the revenue profile from the 2007 Economic Census, the DEA calculated the average 

revenue per establishment. The analysis is conducted on a per establishment basis, rather than 

per firm, to account for firms with multiple establishments and to make each establishment 

equally likely to participate. The cost of $1,240 is calculated as a percentage of revenue per 

establishment for each revenue range. The cost was greater than 1% of average revenue for the 

943 firms in the census data with annual “revenue less than $250,000.” Since the $1,240 cost is 

based on a participation rate of 50%, 50% of the firms in the census data are significantly 

impacted, or 472 out of 943. The 472 firms equate to 2.8% of all firms below the SBA size 

standard in the NAICS code 446110 – Pharmacies and drug stores. Table 29 details the analysis

conducted. Applying the 2.8% to the 29,328 estimated small retail pharmacy entities, the DEA 

estimates that the economic impact will be significant for 810 small retail pharmacy entities.

76
Table 29. Cost to Retail Pharmacies as Percentage of Revenue per Establishment

8.2.7 Long Term Care Facilities

As discussed in section 6.1, the DEA estimates that 31,600 LTCFs correspond to 19,148 

entities, of which 18,414 are estimated to be small entities. As previously calculated in sections 

6.4.1 and 6.4.2, there are two estimated annualized costs for LTCFs: $207 at 24 inner liner 

changes per year, and $103 at 12 inner liner changes per year. For the purposes of the small 

entity analysis, the $207 cost is evaluated as a percentage of average annual revenue to determine 

whether it is a significant economic impact, greater than 1% of revenue. The analysis to 

determine the percentage of significantly affected entities is conducted utilizing information in 

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number 

of firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms 

below 

SBA size 

standards

Number of 

establishments

Sales 

($1,000)

Average sales 

per 

establishment 

($1,000)

Cost of 

voluntary 

participation 

($1,000)

% Cost of 

sales per 

establishment

# of firms 

where cost is 

>1% of sales 

@50% 

participation 

rate

Firms operated for the entire 

year 17,217 40,174 200,477,964

Firms operated entire year 

with sales/receipts/revenue 

less than $250,000 943 943 945 114,989 122 1.24 1.0% 472

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 769 769 778 286,262 368 1.24 0.3% 0

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 1,486 1,486 1,493 1,118,959 749 1.24 0.2% 0

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 5,674 5,674 5,768 9,847,957 1,707 1.24 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 5,264 5,264 5,503 18,509,871 3,364 1.24 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 2,311 2,311 2,789 15,480,620 5,551 1.24 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to $24,999,999 622 622 1,364 8,868,880 6,502 1.24 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to $49,999,999 89 0 535 3,066,523 5,732 1.24 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to $99,999,999 27 0 360 1,797,893 4,994 1.24 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 to 

$249,999,999 8 0 281 1,340,832 4,772 1.24 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $250,000,000 or more 24 0 20,358 140,045,178 6,879 1.24 0.0% 0

Total 17,217 17,069 472

99.1% 2.8%

25.5

% Pharmacy below SBA size standards

446110 - 

Pharmacies and 

drug stores

Total

% of small firms

77
the Economic Census for NAICS codes 623110—Nursing care facilities, 623312—Homes for 

the elderly, and 623990—Other residential care facilities. The resulting percentage of small 

firms with significant impact is applied to the number of affected small entity LTCFs to 

determine the number of significantly impacted entities. 

Using the revenue profile from the 2007 Economic Census, the DEA calculated the average 

revenue per establishment. The analysis is conducted on a per establishment basis, rather than 

per firm, to account for firms with multiple establishments and to make each establishment 

equally likely to participate. The cost of $207 is calculated as a percentage of revenue per 

establishment for each revenue range. The cost was greater than 1% of average revenue for 

0.0% of the small LTCFs in the census data. Applying the 0.0% to the 18,414 estimated small 

entity LTCFs, the DEA estimates that the economic impact will be significant for zero small 

entity LTCFs. Therefore none of the 18,414 affected small LTCF entities are economically 

significantly affected. Table 30 summarizes the analysis.

Revenue data for three of the revenue ranges for NAICS code 623990—Other residential 

care facilities were withheld by the data provider to avoid disclosing data for individual 

companies. However, the three revenue ranges are above the SBA size standards and firms in 

these ranges are not small firms. Therefore, the DEA believes the data, had it been available, 

would not change the overall evaluation.

78
Table 30. Cost to Long Term Care Facilities as Percentage of Revenue per Establishment

(Continued on next page.)

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number 

of firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms 

below 

SBA size 

standards

Number of 

establishments

Receipts/ 

Revenue 

($1,000)

Average 

revenue per 

establishment 

($1,000)

Cost of 

voluntary 

participation 

($1,000)

% Cost of 

revenue per 

establishment

# of firms 

where cost is 

>1% of 

revenue 

@50% 

participation 

rate

Firms operated for the entire 

year 7,675 15,335 91,135,877

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 327 327 329 14,439 44 0.21 0.5% 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 330 330 342 56,200 164 0.21 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 286 286 290 103,515 357 0.21 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 334 334 347 247,557 713 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 1,044 1,044 1,094 1,883,968 1,722 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 1,702 1,702 1,831 6,308,905 3,446 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 1,967 1,967 2,168 13,910,856 6,416 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to $24,999,999 1,225 1,225 1,756 17,683,639 10,070 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to $49,999,999 248 0 930 8,485,392 9,124 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to $99,999,999 116 0 1,055 8,003,835 7,587 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 96 0 5,193 34,437,571 6,632 0.21 0.0% 0

 25.5

623110 - 

Nursing care 

facilities

79
(Continued on next page.)

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number 

of firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms 

below 

SBA size 

standards

Number of 

establishments

Receipts/ 

Revenue 

($1,000)

Average 

revenue per 

establishment 

($1,000)

Cost of 

voluntary 

participation 

($1,000)

% Cost of 

revenue per 

establishment

# of firms 

where cost is 

>1% of 

revenue 

@50% 

participation 

rate

Firms operated for the entire 

year 9,697 12,864 14,809,660

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 1,548 1,548 1,550 85,236 55 0.21 0.4% 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 2,491 2,491 2,496 420,192 168 0.21 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 1,915 1,915 1,933 681,567 353 0.21 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 1,435 1,435 1,514 1,010,748 668 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 1,419 1,419 1,727 2,209,253 1,279 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 539 539 851 1,827,583 2,148 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 216 216 667 1,486,737 2,229 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to $24,999,999 81 0 410 1,250,235 3,049 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to $49,999,999 30 0 365 1,053,821 2,887 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to $99,999,999 9 0 139 596,432 4,291 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 14 0 1,212 4,187,856 3,455 0.21 0.0% 0

 10.0

623312 - 

Homes for 

the elderly

80
Note: “D – withheld to avoid disclosing data for individual companies; data are included in higher level totals”

8.2.8 Results Summary

In summary, none of the manufacturers, distributors, hospitals/clinics with on-site 

pharmacies, and long term care facilities are significantly impacted (annualized cost greater than 

1% of annual revenue) by this rule. Two (5.3%) of 38 small reverse distributor entities, 810

(2.8%) of 29,328 small pharmacy entities, and 62 (10.2%) of 610 small NTP entities are 

significantly impacted by this rule. In total, 874 (1.7%) of 50,714 affected entities are 

significantly impacted by this rule. Table 31 summarizes the analysis.

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number 

of firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms 

below 

SBA size 

standards

Number of 

establishments

Receipts/ 

Revenue 

($1,000)

Average 

revenue per 

establishment 

($1,000)

Cost of 

voluntary 

participation 

($1,000)

% Cost of 

revenue per 

establishment

# of firms 

where cost is 

>1% of 

revenue 

@50% 

participation 

rate

Firms operated for the entire 

year 3,157 5,680 8,214,985

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 317 317 319 15,566 49 0.21 0.4% 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 420 420 421 74,758 178 0.21 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 525 525 540 189,857 352 0.21 0.1% 0

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 575 575 652 414,925 636 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 616 616 959 980,906 1,023 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 276 276 661 953,795 1,443 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 235 235 797 1,648,717 2,069 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to $24,999,999 155 0 916 2,282,868 2,492 0.21 0.0% 0

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to $49,999,999 32 0 323 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to $99,999,999 4 0 62 D N/A N/A N/A N/A

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 2 0 30 D N/A N/A N/A N/A

Total 20,529 19,742 33,879 0

96.2% 0.0%

 10.0

623990 - 

Other 

residential 

care facilities

Total

% LTCF below SBA size standards % of small firms

81
Table 31. Summary of Impact on Small Entities

Business activity

Number of 

registrations 

or LTCF

Number 

of affected 

entities

Percentage

below SBA 

size 

standards

Number 

of affected 

small 

entities

Percentage 

of small 

entities 

with 

significant 

impact

Number of 

small 

entities 

with 

significant 

impact

Manufacturer

 

536 

 

439 96.3

 

423 0 0

Distributor

 

829 

 

585 94.9

 

555 0 0

Reverse distributor

 

60 

 

55 69.1

 

38 5.3 2

NTP 1,332

 

656 93.0

 

610 10.2 62

Hospital/clinic, with on-site 

pharmacy 5,723

 

3,068 43.9

 

1,346 0.0 0

Retail Pharmacy 69,026

 

29,582 99.1

 

29,328 2.8 810

Total DEA registrations 77,506

 

34,385 93.9 32,300 2.7 874

LTCF

 

31,600 

 

19,148 96.2

 

18,414 0.0 0

Total

 

109,106 

 

53,533 94.7 50,714 1.7 874

8.3 CRITERIA FOR “SUBSTANTIAL NUMBER”

When there are no special considerations for “substantial number” or criteria prescribed by 

external sources, the DEA uses a general criterion based on percentage of affected entities. 

Table 32 summarizes the general criteria for “substantial” number.

For the purposes of this analysis, a “substantial number” is defined as greater than 30%.

Table 32. General Criteria for “Substantial Number”

Criteria Result

<10% of small entities Not substantial number

10% to 30% of small entities Possible substantial number

>30% of small entities Substantial number

82
As summarized in section 8.2.8, 874 or 1.7% of 50,714 affected small entities are expected to 

experience a significant economic impact by the final rule, which is far below the 30% criteria 

for all registrant categories.

83
CHAPTER 9: COST-BENEFIT ANALYSIS OF REGULATORY ACTION

9.1 COSTS OF THE RULE

As summarized in Chapter 7, the DEA anticipates this rulemaking will have an annualized 

cost that ranges from a low of $44,896,787 to a high of $73,222,427 to the affected population 

combined. 

9.2 BENEFITS OF THE RULE

The citizens and residents of the United States bear an enormous cost from the diversion of 

controlled substances into the illicit market, not only monetarily but also in public health and 

safety. 

9.2.1 Prescription Drug Abuse Epidemic

Before the Disposal Act, the CSA did not address the disposal of controlled substances by 

ultimate users. To dispose of their controlled substances, ultimate users were permitted to 

destroy the substances themselves (e.g., mix the substances with coffee grounds, place in a 

plastic bag, and throw into the garbage or flush) or surrender the substances to law enforcement. 

There is concern, however, that throwing controlled substances into the garbage or flushing them 

could be harmful to the environment. Because the public has limited options for disposal, 

outdated and unwanted controlled substances often accumulate in medicine cabinets, easily 

within reach of children and teenagers. In passing the Disposal Act, Congress recognized that 

the secure disposal of controlled substances is important because of the significant prescription 

drug abuse problem in the United States. The Centers for Disease Control and Prevention

declared prescription drug overdoses an epidemic.19

23Centers for Disease Control and Prevention, “Morbidity and Mortality Weekly Report,” Vol. 61, No. 1, at 10 (January 13, 2012).

84

 
The abuse of prescription drugs is the fastest growing drug problem in the United States. 

Findings from the 2012 National Survey on Drug Use and Health (NSDUH) estimate that 6.1 

million persons aged 12 or older used prescription-type psychotherapeutic drugs – pain relievers, 

anti-anxiety medications, stimulants, and sedatives – non-medically in the previous month.20 In 

2012, 2.4 million persons aged 12 or older used pain relievers non-medically for the first time.21 

On average, every day 6,700 new initiates per day abuse a prescription pain reliever for the first 

time.22

The availability of outdated or unwanted prescription controlled substances is problematic 

because there is a concern that young people may perceive prescription and/or over-the-counter 

drugs as “safer” than illegal drugs because of their intended, legitimate medical use.23 This 

misperception may be shared by parents. Twenty percent of parents have given a teen a 

prescription drug that was not prescribed to them and one in six parents believes that so called 

“legal highs” (through use of prescription drugs) are safer than those resulting from drugs off the 

street.

24

The 2012 NSDUH25 indicates that over 68% of Americans 12 and older who used pain 

relievers non-medically in the previous year obtained the drugs from a friend or relative.26 

Another study found that more than 42% of teens who have misused or abused prescription 

20 Substance Abuse and Mental Health Services Administration, “Results from the 2010 National Survey on Drug Use and Health: Volume I, 

Summary of National Findings,” Office of Applied Studies, 2011 (NSDUH Series H-41, HHS Publication No. SMA 11-4658), 

http://www.oas.samhsa.gov/NSDUH/2k10NSDUH/2k10Results.pdf. 21 Id. 22 Substance Abuse and Mental Health Services Administration, 2012 National Survey on Drug Use and Health. 23 E.g., Partnership for a Drug-Free America and MetLife Foundation, “2009 Parents and Teens Attitude Tracking Study Report,” March 2, 2010. 24 Id. 25 The National Survey on Drug Use and Health (NSDUH) is an annual survey of the civilian, non-institutionalized, population of the United 

States aged twelve or older. The survey is conducted by the Department of Health and Human Services Office of Applied Studies, Substance 

Abuse and Mental Health Services Administration (SAMHSA).

26 Substance Abuse and Mental Health Services Administration, “Results from the 2010 National Survey on Drug Use and Health: Volume I, 

Summary of National Findings,” Office of Applied Studies, 2011 (NSDUH Series H-41, HHS Publication No. SMA 11-4658), 

http://www.oas.samhsa.gov/NSDUH/2k10NSDUH/2k10Results.pdf.

85

 
drugs obtained the drugs from their own family’s medicine cabinet.27 That same study also 

reported that of the approximately 2.9 million persons aged 12 or older who had used an illicit 

drug for the first time in 2012, one in four initiated with the non-medical use of a prescription 

drug.28 The prevalence of controlled substance prescription drug abuse among teenagers is right 

behind their abuse of marijuana (to include organic marijuana and synthetic cannabinoids). 

According to a 2012 survey by the Partnership at Drugfree.org, one in six teens have misused or 

abused prescription pain relievers at least once in their lifetime. Non-medical drug use, 

particularly among young adults, is having a devastating effect on the United States. According 

to the Centers for Disease Control and Prevention, poisoning deaths, which include drug 

overdoses such as those from prescription drugs, are the leading cause of injury death in the 

United States; nearly nine out of ten poisoning deaths are caused by drugs and more than 40% of 

those involve opioid analgesics.29 

9.2.2 Monetary Costs of Prescription Drug Abuse

The DEA estimated the baseline cost of diversion to the citizens and residents of the United 

States without implementation of the rule. The DEA used “Economic Costs of Nonmedical Use 

of Prescription Opioids”30 and “Estimated Costs of Prescription Opioid Analgesic Abuse in the 

United States in 2001”31 as primary sources for obtaining estimated costs to the citizens and 

residents of the United States associated with the diversion of controlled substances into the 

illicit market. While opioids discussed in the publications represent a subset of all controlled 

27 Partnership for a Drug-Free America and MetLife Foundation, “2010 Partnership Attitude Tracking Study,” April 6, 2011. 28 Id. 29 U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Injury Prevention and 

Control, “Drug Poisoning Deaths in the United States, 1980-2008,” December 2011. 30 Clin J Pain (The Clinical Journal of Pain), Volume 27, Number 3, March/April 2011. 31 Clin J Pain (The Clinical Journal of Pain), Volume 22, Number 8, October 2006.

86

 
substances regulated by the DEA, the cost estimates in the publications may represent a 

conservative estimated cost of the diversion of all controlled substances from a reputable source.

The authors of the primary sources relied upon by the DEA gathered data from numerous 

sources including: emergency department information from the Drug Abuse Warning Network 

(DAWN), nonmedical use of prescription opioids information from the National Survey on Drug 

Use and Health (NSDUH), substance abuse treatment information from the Treatment Episode 

Data Sets (TEDS), statistical information from the U.S. Department of Justice Bureau of Justice 

Statistics, Federal Bureau of Investigation, National Forensic Laboratory, and Drug Enforcement 

Administration budget documents. Data related to the total cost of treatment for the abuse of 

prescription opioids also included input from the Substance Abuse and Mental Health Services 

Administration at the U.S. Department of Health and Human Services. 

According to the research published in The Clinical Journal of Pain, estimated costs 

associated with the nonmedical use of prescription opioids increased from $8.6 billion in 2001 to 

$53.4 billion in 2006 (table 33). The estimated costs to the criminal justice system associated 

with the nonmedical use of prescription opioids increased from $1.4 billion to $8.2 billion—a 

486% increase—from 2001 to 2006. A reduced amount of controlled substances available for 

diversion may reduce criminal justice costs, which include costs of crime, law enforcement, 

prosecution and adjudication, and correctional treatment.

Table 33. U.S. Costs of Nonmedical Use of Prescription Opioids 2001 and 2006

Cost ($ million) 2001 2006 % Increase

Total Cost 8,600 53,400 521

Health Care 2,600 3,200 23

Criminal Justice 1,400 8,200 486

 Workplace & Lost Productivity 4,600 42,000 813

The baseline cost of diversion to the citizens and residents of the United States is the 

estimated cost in 2012 without the rule. The increase from $8.6 billion in 2001 to $53.4 billion 

87
in 2006 represents a compound annual growth rate (CAGR) of 44%. Although it is difficult to 

project that the cost will continue to grow at this rate and nearly impossible to accurately 

estimate the baseline cost, it would not be an exaggeration to say that the cost of nonmedical use 

of prescription opioids to the public is enormous and accelerating.

Although applying the 44% CAGR results in an estimated cost of nonmedical use of 

prescription opioids of $477.7 billion in 2012, the DEA conservatively estimates, for the 

purposes of the EIA, that the cost to the citizens and residents of the United States is greater than 

$53.4 billion (the cost in 2006).

9.3 EVALUATION OF THE COSTS AND BENEFITS OF THE RULE (THRESHOLD 

ANALYSIS)

In evaluating the costs and benefits of the rule, the annualized cost of the rule is compared 

with the anticipated reduction in the growth rate of costs associated with diversion of controlled 

substances into the illicit market. The cost-benefit analysis uses the costs associated with the 

nonmedical use of prescription opioids, $8.6 billion in 2001 and $53.4 billion in 2006. These 

may be conservative estimates of the rapidly growing total cost associated with diversion of 

controlled substances into the illicit market.

It is preferable to conduct a discounted cash flow analysis where the costs and benefits are 

quantified and the net benefits are calculated and presented in present dollar value. However, the 

baseline costs associated with diversion of controlled substances into the illicit market is 

unreliable. Therefore, a quantitative analysis is not possible and a threshold analysis is utilized.

The threshold analysis considers whether the benefits of the rule are greater than or equal to 

the cost of the rule.

88
As discussed above, the impact of the rule is estimated to range from a low of $44,896,787 to 

a high of $73,222,427. Thus the DEA must evaluate whether the benefit of the rule is greater 

than or equal to these costs of the rule.

32

The benefits of the rule are represented as the difference between the costs associated with 

diversion of controlled substances into the illicit market at the baseline and the costs associated 

with the diversion of controlled substances into the illicit market under the rule.

32 Although it may be posited that the rule’s voluntary benefits necessarily outweigh its voluntary costs, the private 

benefits that drive the decision to voluntarily install collection receptacles may not be social benefits (which are 

what matter for a break-even calculation). For instance, if sales are merely shifting from pharmacies without 

receptacles to pharmacies with them, the effect is a transfer, rather than a benefit, when viewed from the perspective 

of society as a whole. Moreover, there almost certainly exist successful disposal programs that will be noncompliant with this rule; some of the “voluntary” costs will not generate substantial new benefits but will instead 

maintain the benefits that are attributable to these currently-existing programs. (The cost savings associated with 

discontinuing non-compliant disposal programs would be attributable to this rule as well, so to be truly thorough, 

this EIA would include on the cost side of the analysis only the incremental cost of the compliant receptacles over 

the non-compliant disposal programs.) To be conservative, the break-even presentation uses the total estimated cost 

of the rule.

89

 
Although there is a lack of evidence to quantify the cost savings or public health impacts of 

the rule, the DEA believes that this rule reduces the growth in the cost of the diversion of 

controlled substances into the illicit market by at least $44.9 to $73.2 million annually and, 

therefore, this rule will have positive net economic benefits, including benefits related to the 

health and safety of the citizens and residents of the United States.

90
CHAPTER 10: CERTIFICATION STATEMENTS

10.1 EXECUTIVE ORDERS 12866 AND 13563

As summarized in chapter 7, the estimated first-year cost of this rule ranges from a low of 

$45,282,242 to a high of $99,075,339; therefore, this rule may result in an annual effect on the 

economy of $100 million or more.

10.2 REGULATORY FLEXIBILITY ACT

In accordance with the RFA, the DEA evaluated the impact of this rule on small entities. 

Specifically, the DEA examined the impact of two mandatory provisions in the rule: 30-day

destruction requirement for reverse distributors and two employee transportation requirement for 

non-practitioners. Additionally, the DEA estimated the level of voluntary participation in 

collection activities in accordance with the rule and the resulting cost impact.

This rule is estimated to affect 53,533 entities (439 manufacturers, 585 distributors, 55 

reverse distributors, 656 NTPs, 3,068 hospitals/clinics, 29,582 pharmacies, and 19,148 long term 

care facilities). Of the 53,533 affected entities, 50,714 (423 manufacturers, 555 distributors, 38 

reverse distributors, 610 NTPs, 1,346 hospitals/clinics, 29,328 pharmacies, and 18,414 long term 

care facilities), or 94.7% are estimated to be small entities. 

While all affected registrants will be required to comply with this rule, only a very small 

subset of registrants engage in the activities where the rule imposes new requirements: the 30-

day destruction requirement and two-person transportation requirement. 

Both requirements affect 55 reverse distributors that receive controlled substances from other 

registrants for disposal, of which 38 were estimated to be small entities. The potential increase 

in destruction, transport, travel, and labor cost associated with these two requirements was 

analyzed for each of the 38 small entities. Additionally, any of the ten reverse distributors with 

91
on-site destruction facilities may receive authorization to voluntarily operate a mail-back 

program. Three of these ten reverse distributors are small entities. The DEA estimates all three 

small entity reverse distributors will operate a mail-back program. The DEA does not estimate 

that any reverse distributors will operate collection receptacles at their registered locations 

because of the small numbers of employees that work at those locations. However, reverse 

distributors will be impacted by the destruction of controlled substances from collection 

receptacles that are transferred to them for destruction. The total estimated cost of the mandatory 

portions and voluntary participation aspects of the rule was compared to the estimated annual 

revenue for each of the small reverse distributors. The economic impact of the rule is estimated 

to be significant, greater than 1% of annual revenue, for two (5%) of 38 affected small 

businesses. 

The two-person transportation requirement also affects 423 small manufacturers and 555

small distributors that transport to reverse distributors or to an unregistered, off-site location for 

destruction. The potential increase in labor cost associated with the two-person requirement was 

analyzed for manufacturers and distributors. Additionally, a small number of manufacturers and 

distributors are estimated to volunteer to operate collection receptacles at their registered 

locations primarily for use by their employees. However, the DEA believes that manufacturers 

and distributors will not operate collection receptacles at their registered locations unless they 

believe there will be a benefit to them for the service. The economic impact of the mandatory 

portion and voluntary participation aspects of this rule is estimated to be significant for none 

(0.0%) of the 423 small manufacturers and none (0.0%) of the 555 small distributors.

The rule also permits certain other registrant categories to voluntarily conduct collection 

activities. The DEA estimates some retail pharmacies, hospitals/clinics with on-site pharmacies, 

92
and NTPs will voluntarily participate as collectors by operating collection receptacles at their

locations. Some retail pharmacies and hospitals/clinics with an on-site pharmacy are also 

estimated to operate collection receptacles at LTCFs. The level of participation and operating 

costs were estimated to determine the number of small entities with impact greater than 1% of 

revenue. In summary, the DEA estimates that zero (0.0%) of the 423 small manufacturers, zero

(0.0%) of the 555 small distributors, two (5.0%) of 38 small reverse distributors, 62 (10.2%) of 

the small NTPs, zero (0.0%) of the 1,349 small hospitals/clinics, 810 (2.8%) of the 29,328 small 

pharmacies, and zero (0.0%) of the 18,414 small long term care facilities to be significantly 

impacted (annualized cost is estimated to be greater than 1% of annual revenue) by this rule.

In total, the DEA estimates 874 (1.7%) of the 50,714 affected small entities to be 

significantly affected by this rule. The DEA’s assessment of economic impact by size category 

indicates that the rule will not have a significant effect on a substantial number of these small 

business entities.

10.3 UNFUNDED MANDATES REFORM ACT

The estimated first-year impact of this rule ranges from a low of $45,282,242 to a high of 

$99,075,339; thus it will not have an annual effect on the economy of $144 million or more (the 

current threshold, inflation-adjusted using the most recent GDP deflator).

10.4 CONGRESSIONAL REVIEW ACT

The estimated first-year impact of this rule ranges from a low of $45,282,242 to a high of 

$99,075,339; thus it may have an annual effect on the economy of $100 million or more.

93
APPENDIX A – AFFECTED ENTITIES AND SMALL ENTITIES

The mandatory portions of this rule affect DEA registered manufacturers, distributors, and 

reverse distributors. Voluntary participation elements of the rule affect manufacturers, 

distributors, reverse distributors, narcotic treatment programs (NTP), hospitals/clinics with an 

on-site pharmacy, retail pharmacies, and long term care facilities (LTCF). Since the rule pertains 

to the disposal of controlled substances, the business activities listed above refer to DEA 

registrants except LTCFs, who are not regulated by the DEA. Table A1 summarizes the affected 

businesses by business activity, DEA registration requirement, and whether the business is 

affected by the mandatory and/or voluntary provisions of the rule.

Table A1: Summary of Affected Business Activities

Business Activity DEA Registrant (Yes/No) Provisions Affected By 

(Mandatory/Voluntary)

Manufacturer Yes Mandatory and Voluntary

Distributor Yes Mandatory and Voluntary

Reverse Distributor Yes Mandatory and Voluntary

NTP Yes Voluntary

Hospital/Clinic (with on-site pharmacy) Yes Voluntary

Retail Pharmacy Yes Voluntary

Long Term Care Facility No Voluntary

The number of affected entities for each business activity is estimated from a combination of 

DEA registration records and the 2007 Economic Census, the most recent census with a 

complete set of available data. The DEA registration records form the basis for all DEA 

registrants affected by this rule and an industry report which estimates the number of LTCFs 

forms the basis of analysis for LTCFs. The method of estimating the number of affected entities 

and small entities is the same for all business activities, with the exception of reverse 

distributors. The analyses pertaining to the number of entities and small entities for reverse 

distributors and the other business activities are presented below.

94
Reverse Distributor

The method used to determine the number of affected reverse distributor entities and small 

entities differs from the method applied to all other business activities. The analysis of reverse 

distributors did not require the use of the census data (discussed in detail below with respect to 

all other registrant business activities). 

As of November 2013, there were 60 active reverse distributor registrations. Four 

registrations were identified as dual registrations, i.e., additional registrations held by the same 

entity or parent entity to facilitate additional locations. One reverse distributor was determined 

to engage in returns only. Since this reverse distributor does not engage in destruction or 

transfers for destruction, it is not impacted by the 30-day destruction requirement or two-person 

transportation requirement. Therefore, for the purposes of this EIA, 55 reverse distributor 

entities are affected by the rule.

Based on review of DEA registration information for the 55 affected reverse distributor

entities, the DEA has determined that 54 are businesses, while one is a non-profit organization. 

The DEA determined the NAICS code, estimated the number of employees, and annual 

revenue33 for each of the 55 affected entities from examination of multiple proprietary records 

and reports, subscription-based research services, and public data sources.34 This information 

was compared to the SBA size standards and the RFA definition for small entities. When a 

parent company is clearly identified, the NAICS code, number of employees, and annual revenue 

for the parent company was estimated and used to determine whether or not the affected entity is 

33 Revenue for two of the small entities was not found, and was estimated by applying the number of employees to the median revenue per 

employee, determined from the small entities whose employee and revenue data was available. 34 Information sources include, but were not limited to, DEA records and reports as well as publicly available and subscription-based services.

95

 
a small entity. Employing the SBA size standard for “Sector 42 - Wholesale Trade”35 of 100 

employees, the DEA estimates that 38 of 55 affected reverse distributor entities are small 

entities.

Manufacturer, Distributor, Narcotic Treatment Program, Hospital/Clinic with On-site 

Pharmacy, Retail Pharmacy, Long Term Care Facility

The method for estimating the number of affected entities and affected small entities is the 

same for manufacturers, distributors, narcotic treatment programs, hospitals/clinics with an onsite pharmacy, retail pharmacies, and long term care facilities. The method is described below:

1. The number of DEA registrations by business activity forms the basis of the 

estimate (except LTCFs, where an industry report is used to estimate the number of 

LTCF facilities, because LTCFs are not registered with the DEA.)

2. North American Information Classification System (NAICS) codes that most

closely represent the affected entities (e.g., manufacturer, distributor, pharmacy, etc.) are

identified.

3. To account for entities with multiple registrations, the relationship between the 

number of establishments and entities is developed for each NAICS code from the 

Economic Census and applied to the number of registrations36 to estimate the number of 

affected entities.

35 “Sector 42 – Wholesale Trade” includes many subsectors and industries including those commonly identified as DEA registered distributors 

and reverse distributors. The size standard for the entire sector is the same, 100 employees.

36 Firm - A firm is a business organization consisting of one or more domestic establishments in the same state and industry that were specified 

under common ownership or control. The firm and the establishment are the same for single-establishment firms. For each multi-establishment 

firm, establishments in the same industry within a state will be counted as one firm- the firm employment and annual payroll are summed from 

the associated establishments. Establishment - A single physical location where business is conducted or where services or industrial operations 

are performed. http://www.census.gov/econ/susb/definitions.html.

96

 
4. The census data for employee size or annual revenue is compared to the SBA size 

standards to determine the percentage of entities, for each business activity, that are 

small.

5. The percentage of businesses that are below SBA size standards is applied to the 

number of affected entities above SBA size standards to estimate the number of affected 

small entities.

The 2007 Economic Census uses the term, “firm” to describe businesses. There are technical 

differences in the definition; however, any difference is expected to have no impact on the 

analysis. For the purposes of this analysis, “firm,” “business,” and “entity” are used 

synonymously.

Following the steps described above, as of November 2013, there are 536 manufacturers, 829 

distributors, 69,026 retail pharmacies, 5,723 hospitals/clinics with on-site pharmacies,37 and 

1,332 NTPs registered with the DEA. Additionally, based on an industry study, the DEA 

estimates that there are 31,600 LTCFs38 affected by this rule. 

The DEA examined the 2007 NAICS code definitions to determine the NAICS codes that 

most closely represent the affected registrants and LTCFs. The DEA determined the following 

NAICS codes most closely represent the business activities affected by this rule:

• Manufacturer

o 325411 – Medicinal and Botanical Manufacturing

37 There are 15,953 DEA registrations under the hospital/clinic business activity. However, this rule affects only those with on-site pharmacies. 

Based on the DEA’s understanding of this registrant category, nearly all hospitals have on-site pharmacies while few clinics have on-site 

pharmacies. Based on a study performed by an industry membership association, the DEA found that there are 5,723 hospitals in the United 

States. The DEA believes it is very likely that all 5,723 hospitals identified by the study are registered with the DEA and have on-site 

pharmacies. Therefore, the DEA uses 5,723 as the estimated number of registrations in the hospital/clinic category that have on-site pharmacies 

and thus are affected by this rule.

38 Includes Home Health Agency, Hospice, and Nursing Home.Harris-Kojetin L, Sengupta M, Park-Lee E, Valverde R. Long-term care services 

in the United States: 2013 overview. Hyattsville, MD: National Center for Health Statistics. 2013

97

 
o 325412 – Pharmaceutical Preparation Manufacturing

• Distributor

o 424210 – Drugs and Druggists’ Sundries Merchant Wholesalers

• NTP

o 621420 - Outpatient mental health and substance abuse centers

• Hospital/clinic, with on-site pharmacy

o 621491 - HMO medical centers

o 622110 - General medical and surgical hospitals

o 622310 - Specialty (except psychiatric and substance abuse) hospitals

• Retail Pharmacy

o 446110 - Pharmacies and drug stores

• Long term care facility

o 623110 - Nursing care facilities

o 623312 - Homes for the elderly

o 623990 - Other residential care facilities

From the Economic Census, the relationship between the number of establishments and firms

(the firms-to-establishments ratio) was determined for each NAICS code. For example, there are 

385 firms and 410 establishments under 325411 – Medicinal and botanical manufacturing and 

763 firms and 991 establishments under 325412 – Pharmaceutical preparation manufacturing, for 

a total of 1,148 firms and 1,401 establishments. The weighted firms-to-establishment ratio is 

0.82 (1,148/1,401). This ratio is applied to the number of affected manufacturer registrations to

determine that 536 manufacturer registrations represent approximately 439 entities. This 

analysis is repeated for each of the affected business activities. The DEA estimates 77,506 

98
affected DEA registrations correspond to 34,385 entities and 31,600 LTCFs correspond to 

19,148 entities, for a grand total of 53,533 entities affected by this rule, including reverse 

distributors. Table A2 summarizes the estimated number of affected entities.

Table A2: Estimated number of affected entities

* Figures for reverse distributors were estimated earlier and are included in this table for reference.

To estimate the number of affected entities that are small entities as defined by the RFA, the 

DEA compared establishments/firms (according to employment size) from the Economic Census 

to the SBA size standards for each NAICS code. SBA size standards, the number of 

establishments/firms by size, and the number and percentage of establishments/firms below the 

Business activities NAICS codes

Census: # of 

establishments

Census: # of 

firms

Firms-toestablishment ratio

# of DEA 

registrations or 

LTCF facility

# of affected 

entities

325411-Medicinal and 

Botanical Manufacturing 410 385

325412-Pharmaceutical 

Preparation Manufacturing 991 763

Subtotal 1,401 1,148 0.82

Distributor

424210-Drugs and 

Druggists’ Sundries 

Merchant Wholesalers 7,700 5,430 0.71 829 585 

Reverse distributor* N/A N/A N/A N/A 60 55 

Narcotic treatment 

program

621420 - Outpatient mental 

health and substance abuse 

centers 8,353 4,113 0.49 1,332 656 

621491 - HMO medical 

centers 516 30

622110 - General medical 

and surgical hospitals 5,077 3,051

622310 - Specialty (except 

psychiatric and substance 

abuse) hospitals 811 352

Subtotal 6,404 3,433 0.54

Retail pharmacy

446110-Pharmacies and 

Drug Stores 40,174 17,217 0.43 69,026 29,582 

 77,506 34,385 

623110 - Nursing care 

facilities 15,335 7,675

623312 - Homes for the 

elderly 12,864 9,697

623990 - Other residential 

care facilities 5,680 3,157

Subtotal 33,879 20,529 0.61

 109,106 53,533 

Manufacturer

 536 439 

Grand total

 5,723 3,068

Hospital/clinic, with 

on-site pharmacy

Long term care 

facility

 31,600 19,148

Total DEA registrations

99
SBA size standards are contained in table A3. Employee size data is available for manufacturers

according to the number of establishments rather than the number of firms. Therefore, the 

number of establishments by employee size is used to estimate the number of affected 

manufacturer entities that are small entities. Manufacturer and distributor size standards are 

based on the number of employees while the remaining business activities are based on annual 

revenue.

Table A3: Estimated percentage of establishments/firms that are small entities

Business 

Activity

2007 NAICS 

code Employment size

Number of 

establishments

SBA size 

standard (# 

of 

employees)

Number of 

establishments 

below SBA size 

standards

Manufacturer

325411 -

Medicinal and 

botanical 

manufacturing

All establishments 

410 

 

750 

N/A

Establishments with 0 to 4 

employees

 

161 

 

161 

Establishments with 5 to 9 

employees

 

51 

 

51 

Establishments with 10 to 

19 employees

 

42 

 

42 

Establishments with 20 to 

49 employees

 

58 

 

58 

Establishments with 50 to 

99 employees

 

40 

 

40 

Establishments with 100 to 

249 employees

 

38 

 

38 

Establishments with 250 to 

499 employees

 

13 

 

13 

Establishments with 500 to 

999 employees

 

5 

 

3 

Establishments with 1,000 

to 2,499 employees

 

1 0

Establishments with 2,500 

employees or more

 

1 0

325412 -

Pharmaceutical 

preparation 

manufacturing

All establishments 

991 

 

750 

N/A

Establishments with 0 to 4 

employees

 

284 

 

284 

Establishments with 5 to 9 

employees

 

124 

 

124 

Establishments with 10 to 

19 employees

 

77 

 

77 

Establishments with 20 to 

49 employees

 

163 

 

163 

Establishments with 50 to 

99 employees

 

86 

 

86 

100
Business 

Activity

2007 NAICS 

code Employment size

Number of 

establishments

SBA size 

standard (# 

of 

employees)

Number of 

establishments 

below SBA size 

standards

Establishments with 100 to 

249 employees

 

114 

 

114 

Establishments with 250 to 

499 employees

 

68 

 

68 

Establishments with 500 to 

999 employees

 

53 

 

27 

Establishments with 1,000 

to 2,499 employees

 

15 0

Establishments with 2,500 

employees or more

 

7 0

Total Manufacturer

 

1,401 

 

1,349 

% Manufacturer below SBA size standards 96.3%

Business 

Activity

2007 NAICS 

code Employment size

Number of 

firms

SBA size 

standard (# 

of 

employees)

Number of 

firms below 

SBA size 

standards

Distributor

424210 -

Drugs and 

druggists' 

sundries 

merchant 

wholesalers

Firms operated for the 

entire year 5,430

100

N/A

Firms operated entire year 

with less than 5 employees 2,652 2,652

Firms operated entire year 

with 5 to 9 employees 1,022 1,022

Firms operated entire year 

with 10 to 19 employees 724 724

Firms operated entire year 

with 20 to 49 employees 555 555

Firms operated entire year 

with 50 to 99 employees 202 202

Firms operated entire year 

with 100 employees or 

more 275 0

Total Distributor 5,430 5,155

% Distributor below SBA size standards 94.9%

Business 

Activity

Meaning of 

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number of 

firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms below 

SBA size 

standards

Retail 

Pharmacy

446110 -

Pharmacies and 

drug stores

Firms operated for the entire 

year 17,217

Firms operated entire year 25.5

with sales/receipts/revenue 

less than $250,000 943

 

943 

101
Business 

Activity

Meaning of 

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number of 

firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms below 

SBA size 

standards

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 769

 

769 

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 1,486

 

1,486 

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 5,674

 

5,674 

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 5,264

 

5,264 

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 2,311

 

2,311 

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to 

$24,999,999 622

 

622 

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to 

$49,999,999 89 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to 

$99,999,999 27 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 to 

$249,999,999 8 0

Firms operated entire year 

with sales/receipts/revenue 

of $250,000,000 or more 24 0

Total Retail Pharmacy 17,217 17,069

% Pharmacy below SBA size standards 99.1%

NTP

621420 -

Outpatient 

mental health 

and substance 

abuse centers

Firms operated for the entire 

year 4,113

 

10.0 

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 518 518

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 641 641

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 487 487

102
Business 

Activity

Meaning of 

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number of 

firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms below 

SBA size 

standards

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 594 594

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 761 761

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 447 447

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 378 378

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to 

$24,999,999 234 0

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to 

$49,999,999 45 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to 

$99,999,999 6 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 2 0

Total NTP 4,113 3,826

% NTP below SBA size standards 93.0%

Hospital/cli

nic, with 

on-site 

pharmacy

621491 - HMO 

medical centers

Firms operated for the entire 

year 30

 

30.0 

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 0 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 5 5

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 4 4

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 3 3

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 2 2

103
Business 

Activity

Meaning of 

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number of 

firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms below 

SBA size 

standards

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 2 2

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 1 1

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to 

$24,999,999 2 2

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to 

$49,999,999 4 2

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to 

$99,999,999 0 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 7 0

622110 -

General 

medical and 

surgical 

hospitals

Firms operated for the entire 

year 3,051

 

35.5 

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 2 2

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 1 1

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 0 0

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 18 18

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 117 117

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 316 316

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to 

$24,999,999 613 613

104
Business 

Activity

Meaning of 

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number of 

firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms below 

SBA size 

standards

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to 

$49,999,999 436 218

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to 

$99,999,999 416 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 1,132 0

Firms not operated for the 

entire year 25

622310 -

Specialty 

(except 

psychiatric and 

substance 

abuse) hospitals

All firms 375

Firms operated for the entire 

year 352

 

35.5 

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 0 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 0 0

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 0 0

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 1 1

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 7 7

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 27 27

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 49 49

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to 

$24,999,999 73 73

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to 

$49,999,999 86 43

105
Business 

Activity

Meaning of 

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number of 

firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms below 

SBA size 

standards

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to

$99,999,999 55 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 54 0

Total Hospital/clinic 3,433 1,506

% Hospital/clinic below SBA size standards 43.9%

Long term 

care facility

623110 -

Nursing care 

facilities

Firms operated for the entire 

year 7,675

 

25.5 

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 327

 

327 

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 330

 

330 

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 286

 

286 

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 334

 

334 

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 1,044

 

1,044 

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 1,702

 

1,702 

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 1,967

 

1,967 

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to 

$24,999,999 1,225

 

1,225 

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to 

$49,999,999 248 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to 

$99,999,999 116 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 96 0

106
Business 

Activity

Meaning of 

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number of 

firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms below 

SBA size 

standards

623312 -

Homes for the 

elderly

Firms operated for the entire 

year 9,697

 

10.0 

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 1,548

 

1,548 

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 2,491

 

2,491 

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 1,915

 

1,915 

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 1,435

 

1,435 

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 1,419

 

1,419 

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 539

 

539 

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 216

 

216 

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to 

$24,999,999 81 0

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to 

$49,999,999 30 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to 

$99,999,999 9 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 14 0

623990 - Other 

residential care 

facilities

Firms operated for the entire 

year 3,157

 

10.0 

Firms operated entire year 

with sales/receipts/revenue 

less than $100,000 317

 

317 

Firms operated entire year 

with sales/receipts/revenue 

of $100,000 to $249,999 420

 

420 

107
Business 

Activity

Meaning of 

2007 NAICS 

code

Sls/rcpts/rev size of firms 

operated entire year

Number of 

firms

SBA size 

standard 

(annual 

revenue, $ 

million)

Number of 

firms below 

SBA size 

standards

Firms operated entire year 

with sales/receipts/revenue 

of $250,000 to $499,999 525

 

525 

Firms operated entire year 

with sales/receipts/revenue 

of $500,000 to $999,999 575

 

575 

Firms operated entire year 

with sales/receipts/revenue 

of $1,000,000 to $2,499,999 616

 

616 

Firms operated entire year 

with sales/receipts/revenue 

of $2,500,000 to $4,999,999 276

 

276 

Firms operated entire year 

with sales/receipts/revenue 

of $5,000,000 to $9,999,999 235

 

235 

Firms operated entire year 

with sales/receipts/revenue 

of $10,000,000 to 

$24,999,999 155 0

Firms operated entire year 

with sales/receipts/revenue 

of $25,000,000 to 

$49,999,999 32 0

Firms operated entire year 

with sales/receipts/revenue 

of $50,000,000 to 

$99,999,999 4 0

Firms operated entire year 

with sales/receipts/revenue 

of $100,000,000 or more 2 0

Total LTCF 20,529 19,742

% LTCF below SBA size standards 96.2%

The percentages of entities that are small entities are applied to the estimated number of 

affected entities, to estimate the number of affected small entities. For example, 96.3% of 

manufacturers are estimated to be below the SBA size standard. Applying 96.3% to the number 

affected manufacturers, the DEA estimates 423 of 439 are small entities. This process is 

repeated for all business activities. 

108
In summary, the mandatory portions of the rule affect manufacturers, distributors, and 

reverse distributors. Table A4 summarizes the numbers of entities and small entities affected by 

the mandatory portions of the rule.

Table A4: Estimated number of affected entities and small entities affected by mandatory portions

Business activity

Number of 

registrations

Number of 

affected entities

% below SBA 

size standards

Number of 

affected small 

entities

Manufacturer

 

536 

 

439 96.3

 

423 

Distributor

 

829 

 

585 94.9

 

555 

Reverse distributor

 

60 

 

55 69.1

 

38 

Total

 

1,425 

 

1,079 

 

1,016 

The voluntary participation elements of the rule affect all affected registrants and LTCFs. In 

total, the rule affects 109,106 registrations and LTCFs (places of businesses), which correspond 

to 53,533 entities, of which 50,714 are small entities. Table A5 contains the total number of 

entities and small entities affected by both the voluntary participation elements and mandatory 

portions of this rule.

Table A5: Estimated number of affected entities that are small entities

Business activity

Provisions 

Affected By 

(Mandatory/ 

Voluntary)

Number of 

registrations 

or LTCF

Number of 

affected 

entities

% below SBA 

size standards

Number of 

affected small 

entities

Manufacturer

Mandatory & 

Voluntary

 

536 

 

439 96.3

 

423 

Distributor

Mandatory & 

Voluntary

 

829 

 

585 94.9

 

555 

Reverse distributor

Mandatory & 

Voluntary

 

60 

 

55 69.1

 

38 

Pharmacy Voluntary 69,026

 

29,582 99.1

 

29,328 

Hospital/clinic, with onsite pharmacy Voluntary 5,723 

3,068 43.9

 

1,346

NTP Voluntary 1,332

 

656 93.0

 

610 

Total DEA 

registrations 77,506

 

34,385 

 

32,300

LTCF Voluntary

 

31,600 

 

19,148 96.2

 

18,414 

109
Total

 

109,106 

 

53,533 

 

50,714

110