40524 Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations

40 CFR Parts 141 and 142

Environmental protection, Reporting

and recordkeeping requirements, Water

supply.

Dated: June 21, 2000.

J. Charles Fox,

Assistant Administrator for Water.

For the reasons set out in the

preamble, 40 CFR part 9 is amended as

follows:

1. The authority citation of part 9

continues to read as follows:

Authority: 7 U.S.C. 135 et seq., 136–136y;

15 U.S.C. 2001, 2003, 2005, 2006, 2601–2671;

21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33

U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318,

1321, 1326, 1330, 1342, 1344, 1345 (d) and

(e), 1361; E.O. 11735; 38 FR 21243, 3 CFR,

1971–1975 Comp. p. 973; 42 U.S.C. 241,

242b, 243, 246, 300f, 300g, 300g–1, 300g–2,

300g–3, 300g–4, 300g–5, 300g–6, 300j–1,

300j–2, 300j–3, 300j–4, 300j–9, 1857 et seq.,

6901–6992k, 7401–7671q, 7542, 9601–9657,

11023, 11048.

2. In § 9.1, the table is amended by

removing ‘‘142.10–142.13’’ and adding

the new entries in numerical order

under the indicated heading to read as

follows:

§ 9.1 OMB approvals under the Paperwork

Reduction Act.

* * * * *

40 CFR citation OMB control

No.

*****

National Primary Drinking Water

Regulations Implementation

*****

142.10 ....................................... 2040–0090

142.11(a)(1)–(a)(5) ................... 2040–0090

142.11(a)(6) .............................. 2040–0915

142.11(a)(7) .............................. 2040–0090

142.12 ....................................... 2040–0090

142.13 ....................................... 2040–0090

*****

[FR Doc. 00–16368 Filed 6–29–00; 8:45 am]

BILLING CODE 6560–50–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 82

[FRL–6726–5]

RIN 2060–A173

Protection of Stratospheric Ozone:

Allocation of Essential Use Allowances

for Calendar Year 2000: Allocations for

Metered-Dose Inhalers and the Space

Shuttle and Titan Rockets

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final rule.

SUMMARY: With this action, EPA is

allocating essential-use allowances for

calendar year 2000 for stratospheric

ozone depleting substances (ODS) for

use in medical devices and for use in

the Space Shuttle Rockets and Titan

Rockets for the year 2000 control period.

Production and import of ODS for

laboratory and analytical applications

will be addressed in a separate

rulemaking. The United States

nominated specific uses of controlled

ozone-depleting substances as essential

for calendar year 2000 under the

Montreal Protocol on Substances that

Deplete the Ozone Layer (Protocol). The

Parties to the Protocol subsequently

authorized specific quantities of ODS

for calendar year 2000 for the uses

nominated by the United States. EPA

allocates essential use allowances to an

applicant for exempted production or

import of a specific quantity of class I

ODS solely for the designated essential

purpose. These essential use allowances

permit a person to obtain controlled

ODS as an exemption to the January 1,

1996 regulatory phase-out of production

and import of these substances.

EFFECTIVE DATE: This action is effective

June 30, 2000.

ADDRESSES: Materials relevant to this

rulemaking are contained in Docket No.

A–93–39. The Docket phone is (202)

260–7548 and is located in room M–

1500, First Floor, Waterside Mall 401 M

Street, SW., Washington, DC 20460. The

materials may be inspected from 8 a.m.

until 4 p.m. Monday through Friday. A

reasonable fee may be charged by EPA

for copying docket materials.

FOR FURTHER INFORMATION CONTACT: The

Stratospheric Ozone Protection Hotline

at (800) 296–1996 or Erin Birgfeld, U.S.

Environmental Protection Agency,

Stratospheric Protection Division, Office

of Air and Radiation (6205J), Ariel Rios

Building, 1200 Pennsylvania Avenue,

NW., Washington, DC, 20460;

birgfeld.erin@epa.gov; (202) 564–9079

phone and (202) 565–2096 fax.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. Allocation Process for Calendar Year 2000

III. Allocation of Essential Use Allowances

for Calendar Year 2000

IV. Response to Comments

V. Administrative Requirements

VI. Judicial Review

VII. Congressional Review

I. Background

Overview of the Essential Use Process

The Montreal Protocol on Substances

that Deplete the Ozone Layer (Protocol)

is the international agreement to reduce

and eventually eliminate production

and consumption of all stratospheric

ozone depleting substances. This is

accomplished through adherence to

phase-out schedules for the production

and consumption of specific ODS

including chlorofluorocarbons (CFCs),

halons, carbon tetrachloride, methyl

chloroform, hydrochlorofluorocarbons,

and methyl bromide. As of January

1996, production and import of class I

ODSs were phased out in all developed

countries, including the United States.

However, the Protocol and the Clean Air

Act (CAA or Act) provide exemptions

which allow for the continued import

and/or production of class I ODS for

specific uses. Under the Montreal

Protocol, exemptions are granted for

uses that are determined by the Parties

to be ‘‘essential.’’ Decision IV/25, taken

in 1992, established criteria for

determining whether a specific use

should be approved as essential, and set

forth the international process for

making determinations of essentiality.

The CAA provides for specific

exempted uses for which class I ODSs

may continue to be produced and

imported.

Once the U.S. nomination for

essential use allowances is approved by

the Parties, the U.S. EPA allocates

essential use allowances to each

essential use applicant in accordance

with the CAA. For the year 2000 and

beyond, the CAA requires EPA to

formally consult with the Food and

Drug Administration (FDA) on the

amount of CFCs that are necessary for

the production of medical devices. On

January 6, 2000, EPA issued an interim

final rule (IFR) allocating essential use

allowances for use in metered dose

asthma inhalers (MDIs) and in the Space

Shuttle and Titan Rocket (65 FR 716).

Today’s action allocates essential use

allowances for use in medical devices

and reflects the final determination of

the amount of CFCs that are necessary

for use in medical devices for calendar

year 2000. This final rule also allocates

Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations 40525

methyl chloroform for use in the Space

Shuttle and Titan Rocket solid rocket

motor assemblies.

What Was the International Procedure

for Approving Essential Use Exemptions

for the Year 2000?

The international process for

nominating and approving essential use

allocations for CFCs for use in medical

devices for the year 2000 occurred in

the same way as in prior years. The

entities in Table I submitted

applications requesting class I

controlled substances for essential uses

in response to a Federal Register notice

in the Fall of 1998. Their applications

requested exemptions for the

production and import of specific

quantities of certain class I controlled

substances after the phase-out, and

provided information in accordance

with the criteria set forth in Decision IV/

25 of the Protocol and the procedures

outlined in the ‘‘1997 Handbook on

Essential Use Nominations.’’ EPA

reviewed the applications and

nominated these uses to the Protocol

Secretariat for analysis by the Technical

and Economic Assessment Panel (TEAP)

and its Technical Options Committees

(TOCs). The Parties to the Montreal

Protocol approved the U.S. nominations

for essential-use exemptions during the

Tenth Meeting in 1998 (Decision IX/18).

Overview of the Notice of Proposed

Rulemaking and Interim Final Rule

The Notice of Proposed Rulemaking

(NPRM) for allocating essential use

allowances for the year 2000 was

published on November 2, 1999 (64 FR

59141). In the NPRM, EPA proposed

allocating CFCs for use in metered dose

inhalers (MDIs) that meet the medical

device definition in the Act, and methyl

chloroform for use in the Space Shuttle

and Titan Rocket. In the NPRM, EPA

proposed to allocate the entire amount

of CFCs for use in MDIs that was

granted to the U.S. by the Parties to the

Montreal Protocol, which was 3735

metric tons. However, EPA explained

that because of additional requirements

in the Clean Air Act that apply

beginning in calendar year 2000, EPA

needed to formally consult with FDA

regarding the amount of CFCs that are

necessary for use in medical devices for

calendar year 2000 prior to issuing a

final allocation. Following EPA’s

consultation with FDA, it was

determined that a total of 2737 metric

tons were necessary for production of

MDIs for the year 2000. This allocation

was reflected in the IFR published on

January 6, 2000 (65 FR 716). By issuing

the allocation as an interim final instead

of a final rule, EPA ensured that there

would be sufficient opportunity for all

stakeholders to comment on the revised

allocation while ensuring that CFCs

were available for continued production

of MDIs. Originally EPA planned to

receive comments until February 7,

2000, however, in response to requests

by stakeholders, EPA published a notice

in the Federal Register on February 25,

2000 (65 FR 10025) extending the

comment period on the IFR until March

27th, 2000.

EPA received a number of comments

on the IFR published January 6, 2000

covering the following areas: the

amount of CFCs allocated to specific

companies, the process that EPA used in

allocating essential use allowances for

the year 2000, and various legal

interpretations of the medical device

exemption provided in the Act. This

final rule revises the allocation of CFCs

for use in medical devices to reflect a

final determination of the amount of

CFCs necessary for use in medical

devices. EPA consulted with FDA in

arriving at this final determination.

In the NPRM and the interim final

rule, EPA explained that due to

requirements of the CAA that apply

beginning in calendar year 2000, the

essential use exemption for import and

production of small amounts of high

purity ozone depleting substances

(ODS) for laboratory and analytical uses

may not be available after January 1,

2000. Today’s action does not address

laboratory essential uses; these will be

addressed in a separate final rule.

II. Allocation Process for Calendar Year

2000

As discussed in the NPRM and IFR,

the domestic allocation process for

calendar year 2000 differs from past

allocations due to changes in the

requirements under the CAA. Prior to

the year 2000, EPA allocated essential

use exemptions under the original

phase-out schedule contained in section

604 of the Act, and had the flexibility

to create exemptions to the regulatory

phase-out, where such exemptions had

been approved under the Montreal

Protocol. Thus, before the year 2000,

EPA was able to authorize production

and import of ODSs for essential uses

allowed under the Protocol, without

regard to whether the Act contains

exceptions for those uses, as long as the

total authorized production did not

exceed the amount permitted by the

Act.

Once the phase-out date for a

particular substance has passed (as it

has for CFCs), EPA must implement

exemptions for essential uses of these

chemicals as specified under the Act in

section 604(d).

What Is the Relevant Exemption to the

Phase-Out Provided for in the Act?

In allocating CFCs for use in MDIs,

EPA must implement the exception for

medical devices found in section

604(d)(2) of the Act. This exception

states that notwithstanding the phaseout, EPA shall, to the extent consistent

with the Montreal Protocol, authorize

production of limited quantities of class

I ODSs for use in medical devices, if

FDA, in consultation with EPA,

determines that such production is

necessary.

How Does EPA Interpret the Definition

of ‘‘Medical Device’’ as Specified in the

Act?

‘‘Medical device’’ is defined in

section 601(8) of the Clean Air Act as

follows:

[A]ny device (as defined in the

Federal Food, Drug, and Cosmetic Act

(21 U.S.C. 321)), diagnostic product,

drug (as defined in the Federal Food,

Drug, and Cosmetic Act), and drug

delivery system—

(A) If such device, product, drug, or

drug delivery system utilizes a class I or

class II substance for which no safe and

effective alternative has been developed,

and where necessary, approved by the

Commissioner [of FDA]; and

(B) If such device, product, drug, or

drug delivery system, has, after notice

and opportunity for public comment,

been approved and determined to be

essential by the Commissioner [of FDA]

in consultation with the Administrator

[of EPA].

The preamble to FDA’s September 1,

1999, notice of proposed rulemaking on

essential use determinations (64 FR

47735) discusses FDA’s approach to

determining whether ‘‘safe and effective

alternative[s]’’ have been developed. It

states that ‘‘A non-CFC product simply

having the same active moiety as a CFC

product is only one factor to be

considered. Other factors, such as

whether the non-CFC product has the

same route of administration, the same

indication, and can be used with

approximately the same level of

convenience, are important

considerations. Additionally, FDA must

consider whether patients who

medically need the CFC product are

adequately served by the non-CFC

product. FDA’s approval of a non-CFC

product is a determination that the

product is safe and effective, but it is

not a determination that the product is

a safe and effective alternative to any

other product. That requires a separate

and distinct analysis.’’ FDA has not yet

determined that any non-CFC product is

a safe and effective alternative to any

40526 Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations

CFC MDI. Accordingly, part (A) of the

definition of medical device has not

affected today’s allocation.

With respect to part (B) of the

definition of medical device (section

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

the word ‘‘essential’’ in that part of the

definition, EPA is relying on current

FDA regulations (21 CFR 2.125) which

contain a list of categories of CFCcontaining medical devices, as that term

is used in the CAA, that FDA, in

consultation with EPA, has found to be

essential. This list includes, among

others, metered-dose steroids, metereddose adrenergic bronchodilators,

metered-dose cromolyn sodium,

metered-dose ipratropium bromide, and

metered-dose nedocromil sodium; all

drugs for oral inhalation in humans. The

companies for which EPA is granting

essential use allowances produce CFC

MDIs that fall within one of these

categories. Thus, the products for which

EPA is granting essential use allowances

are ‘‘determined to be essential’’ by

FDA.

Also with respect to part (B) of the

definition of ‘‘medical device’’, EPA and

FDA considered how to interpret the

language regarding approval by FDA of

the ‘‘device, product, drug, or drug

delivery system.’’ The complete phrase

reads as follows: ‘‘if such device,

product, drug, or drug delivery system,

has, after notice and opportunity for

public comment, been approved and

determined to be essential by the

Commissioner in consultation with the

Administrator.’’ EPA and FDA

determined that in light of the

surrounding language, this phrase refers

to FDA’s approval of an essential use,

and not the approval of the specific

product in question through approval of

the New Drug Application (NDA) or

Abbreviated New Drug Application

(ANDA) for that product. Since approval

of an NDA or ANDA under the Food,

Drug, and Cosmetic Act (FDCA)

involves unilateral action by FDA

without notice-and-comment

rulemaking or consultation with EPA, it

is reasonable to conclude that section

601(8)(B) does not refer to approval of

an NDA or ANDA under the FDCA.

Therefore, FDA and EPA read section

601(8)(B) to refer to FDA’s approval of

an essential use which does require

notice-and comment rulemaking in

consultation with EPA. This means that

an MDI is ‘‘approved and determined to

be essential’’ if the MDI is included

within the list of categories of CFC–

MDIs on FDA’s essential use list. All of

the MDIs for which we are allocating

CFCs today meet this qualification.

How Did EPA Consult With FDA on the

Amount of CFCs Necessary for Use in

Medical Devices?

Implementing the essential use

exemption for MDIs under the Act

required EPA to consult with FDA

regarding the quantity of CFCs to be

allocated. As stated earlier, section

604(d)(2) of the Act provides that EPA

shall authorize production and import

of limited quantities of class I

substances for use in medical devices if

FDA, in consultation with EPA,

determines such authorization to be

necessary. Administrator Carol Browner

sent a letter to Dr. Jane Henney,

Commissioner of FDA, dated October

28, 1999, requesting that FDA make a

determination on the amount of CFCs

that are ‘‘necessary’’ for the production

of MDIs for calendar year 2000.

The 1997 TEAP Handbook on

Essential Use Nomination (Handbook),

the guidance document for essential use

exemption applications at the

international level, does not request

information regarding specific products

for which the CFCs will be used.

Therefore, EPA sought more detailed

information including which drug

products would be produced using

CFCs allocated in calendar year 2000.

EPA sent out letters to the essential use

applicants for medical devices,

requesting this additional information

under section 114 of the Act (separate

letters were sent to the International

Pharmaceutical Aerosol Consortium

(IPAC) member companies). The

responses to the letters included

confidential business information on the

types of drug products to be

manufactured, as well as the quantity

and the specific CFC chemical to be

used in the manufacture of each

product. EPA shared the responses to

these letters with FDA to assist in

determining the amount of CFCs for use

in medical devices that are ‘‘necessary.’’

Dr. Henney’s letter in response to the

Administrator dated December 20, 1999,

stated that 2737 metric tons of CFCs

were necessary for use in medical

devices for the year 2000, in contrast to

the 3735 metric tons proposed to be

allocated in the November 2, 1999

NPRM (64 FR 59141). A total of 2737

metric tons was subsequently allocated

in the January 6, 2000 IFR (65 FR 716).

The rationale underlying the FDA

determination was provided in Dr.

Henney’s letter to EPA dated December

20, 1999. ‘‘In listing the amounts we

believe to be necessary for use in

medical devices, we referred to

historical use and have included an

additional amount to allow for overage,

for waste during manufacturing, for

uncertainties in the supply chain of

CFCs since they are no longer produced

in the United States, for changes in

future market shares of specific

products, as well as for unforeseen

circumstances in the market. We also

provided additional amounts based on

our knowledge of certain manufacturing

problems. In addition, we eliminated

any double-counting we found and

eliminated allocations for uses not

considered essential by the Parties to

the Montreal Protocol, even if those uses

are currently listed in our regulation at

21 CFR 2.125(e).’’ FDA also noted that

they accounted for CFCs for use in the

production of MDIs that would

ultimately be exported to Canada.

Three companies commented that

they did not receive sufficient CFC

allocations in the IFR for the production

of MDIs to meet their needs for the year

2000. In lieu of specific written

comments, one company requested a

meeting with EPA and FDA. A summary

of the meeting is posted in docket # A–

93–39. Based on the information

provided by this company at the

meeting, FDA issued a letter to EPA,

dated March 6, 2000, in which it stated

the factors that had led it to increase the

amount determined to be ‘‘necessary’’

(See docket # A–93–39). Relevant

factors included new information about

this company’s manufacturing process,

and the company’s ‘‘contractual

obligations to produce product

necessary for patient health on behalf of

another company.’’

In response to the other two

companies who commented that

additional CFCs were necessary, EPA

and FDA requested that they provide

the following information: the number

of units produced in 1999, the number

of units produced in the first quarter of

2000, the total number of units

anticipated to be produced in 2000, the

target fill weight per unit, total CFC to

be contained in the product for 2000,

the additional amount necessary for

production of each product, and the

total amount of CFCs per product line

for the year 2000.

One company sent EPA the additional

information, which was then shared

with FDA. FDA noted some

discrepancies between the numbers that

were reported to EPA and those that

were reported in that company’s annual

report to FDA. The company sent EPA

and FDA additional clarification after

which FDA re-assessed their

determination on the amount of CFCs

necessary for the year 2000. In their

letter dated May 5, 2000 (see docket #

A–93–39), FDA states that the company

does in fact require an additional

amount for the production of MDIs due

Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations 40527

to greater than anticipated market

growth for their products.

For the third company that

commented that it did not receive

sufficient CFCs in the IFR,

representatives from EPA and FDA

participated in a conference call with

representatives from the company on

May 22, 2000 where the company

shared the information EPA had

requested pertaining to their past MDI

production and future needs with EPA

and FDA verbally. FDA and EPA

reviewed the information, taking into

account the following factors

enumerated in the December 20, 1999

letter to EPA. These factors include:

historical use, the additional amount

necessary for waste and overage during

manufacturing, uncertainties in the

supply chain of CFCs, changes in future

market shares of specific products, and

unforeseen circumstances in the market.

Based on this review, EPA and FDA

agreed that the allocation published in

the IFR is sufficient to meet the needs

projected for this company for the year

2000. In their letter dated June 13, 2000,

FDA determined that an additional

amount is not necessary for the

production of their product.

In accordance with the

determinations made by FDA in

consultation with EPA, today’s

allocation on the amount of CFCs

necessary for use in medical devices

states that a total of 3136.3 metric tons

are necessary for use in MDIs for

calendar year 2000.

When Is This Rule Effective?

This final rule is effective on June 30,

2000. Section 553(d) of the APA

generally provides that rules may not

take effect earlier than 30 days after they

are published in the Federal Register.

However, APA section 553(d) excepts

from this provision any action that

grants or recognizes an exemption or

relieves a restriction. Since today’s

action grants an exemption to the phaseout of production and consumption of

CFCs, EPA is making this action

effective immediately to ensure the

availability of CFCs for medical devices

during the 2000 control period.

III. Allocation of Essential Use

Allowances for Calendar Year 2000

What Is EPA’s Final Essential Use

Allocation for Calendar Year 2000?

In today’s action, EPA is allocating

essential use allowances for the year

2000 control period to entities listed in

Table I for exempted production or

import of the specific quantity of class

I controlled substances solely for the

specified essential use. The final

allocation for CFCs for use in MDIs

reflects the final determination of the

amounts of CFCs that are necessary as

specified under section 604(d)(2) of the

Act. (Note: There is no change from the

IFR to the year 2000 allocation for the

Space Shuttle and Titan Rockets)

TABLE I.—ESSENTIAL USE ALLOCATION FOR CALENDAR YEAR 2000

Company Chemical Quantity

(metric tons)

(i) Metered Dose Inhalers (for oral inhalation) for Treatment of Asthma and Chronic Obstructive Pulmonary Disease (in metric tons)

International Pharmaceutical Aerosol Consortium (IPAC)—Medeva Americas, Inc.,

Boehringer Ingelheim Pharmaceuticals, Glaxo Wellcome, Aventis (formerly RhonePoulenc Rorer), 3M.

CFC–11 or CFC–12 or CFC–

114.

2038.0

Medisol Laboratories, Inc. .......................................................................................................... CFC–11 or CFC–12 or CFC–

114.

49.0

Schering Corporation ................................................................................................................. CFC–11 or CFC–12 or CFC–

114.

1048.0

Sciarra Laboratories, Inc. ........................................................................................................... CFC–11 or CFC–12 or CFC–

114.

1.3

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

National Aeronautics and Space Administration (NASA)/Thiokol Rocket ................................. Methyl Chloroform .................. 56.7

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

EPA is adding a parenthetical to Table

I clarifying that CFCs are granted for use

in the production of MDIs for oral

inhalation only. The Parties to the

Montreal Protocol do not consider MDIs

for nasal inhalation to be essential, and

thus, under the CAA EPA cannot

approve CFCs for this use or any other

use not considered essential by the

Parties to the Protocol. In turn, this

means that companies may not use their

essential use allocation to produce a

product not considered essential by the

Parties to the Protocol.

Why Is EPA No Longer Allocating CFCs

on a Chemical by Chemical Basis?

As discussed in the January 6, 2000

IFR, EPA is allocating essential-use

allowances in aggregate amounts in

accordance with Decision X/6 of the

Parties to the Montreal Protocol which

states that ‘‘the quantities approved

under paragraph 2 above and all future

approvals are for total CFC volumes

with flexibility between CFCs within

each group.’’ EPA has determined that

allocating CFCs for the manufacture of

metered-dose inhalers in the aggregate

instead of on a compound-by-compound

basis will add flexibility to the

regulatory scheme without causing any

additional damage to the stratospheric

ozone layer since CFC–11, CFC–12 and

CFC–114 all have the same ozone

depleting potential of 1.0.

How Will the IPAC Companies Be

Informed of Their Individual

Allocations?

The International Pharmaceutical

Aerosol Consortium (IPAC)

consolidated the essential use

exemption requests of its member

companies for administrative

convenience. EPA has already

separately allocated the essential-use

allowances allocated in the IFR to each

of IPAC’s member companies by means

of a confidential letter. EPA will send a

revised allocation letter to those IPAC

companies whose essential use

allowances were changed in today’s

final rule.

What Reporting Requirements Relate to

the Essential Uses of Ozone Depleting

Substances?

Any person obtaining class I

controlled substances after the phaseout under the essential use exemptions

in today’s action is subject to all the

restrictions and requirements in other

40528 Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations

sections of 40 CFR part 82, subpart A.

Holders of essential-use allowances or

persons obtaining class I controlled

substances under the essential-use

exemptions must comply with the

record keeping and reporting

requirements in 40 CFR 82.13.

How Will Essential Use Allowances for

Medical Devices Be Allocated in the

Year 2001?

EPA and FDA have worked together

to plan a streamlined regulatory process

for the year 2001 and beyond,

summarized as follows:

1. In letters sent directly to MDI

manufacturers under section 114 of the

Act, EPA will request detailed

information regarding CFC usage for the

production of MDIs for prior years and

projected needs for 2001.

2. EPA will share this information

with FDA which will use this

information in consultation with EPA as

the basis for the determination of the

amount of CFCs necessary for use in

medical devices.

3. EPA will issue a proposed rule

setting forth the proposed allocations of

CFCs .

4. EPA plans to issue a final allocation

rule by December, 2000 to provide

adequate time for companies to

replenish their supply of CFCs for MDI

production in the year 2001. In the

proposed allocation rule for the year

2001, to be published later this year,

EPA will explain the process EPA will

use for the essential use allocation in

detail and request formal comment on

it.

VI. Response to Comments

Three commenters stated that the

amount of CFCs allocated to their

companies in the January 6, 2000 IFR

was too low; one company requested a

meeting with the EPA and FDA to

discuss their allocation. EPA and FDA

met with this company on Thursday

March 2, 2000. A summary of this

meeting is posted in docket # A–93–39.

FDA subsequently issued a

supplemental letter to EPA, dated

March 6, 2000, in which it stated the

factors that had led it to increase the

amount determined to be necessary.

Relevant factors included new

information about the company’s

manufacturing process and the

company’s ‘‘contractual obligations to

produce product necessary for patient

health on behalf of another company.’’

The second commenter requested

additional essential use allowances with

one portion to be used for production in

the year 2000, and a second larger

portion to be added to their year 2000

allocation for use in 2001. EPA and FDA

determined that allocating additional

amounts of CFCs to this company in

calendar year 2000 for use in 2001 is not

‘‘necessary’’ as specified in section

604(d)(2), since EPA will soon be

proposing to allocate CFCs to all

essential use applicants with sufficient

advance time for this commenter and

other applicants to acquire additional

amounts of CFCs and replenish their

supply of CFCs for 2001. Therefore, in

reassessing the amount that was

necessary for the year 2000, EPA and

FDA considered only the additional

amount that was requested for use in the

year 2000.

As described earlier in the preamble,

EPA and FDA requested additional

information from this company to

substantiate its claim that additional

CFCs for the year 2000 were necessary.

Using this information, FDA in

consultation with EPA, reassessed the

amount of CFC necessary for the year

2000 and found that due to greater than

anticipated market growth, this

company does in fact require an

additional amount of CFCs for use in

medical devices. This determination

was provided to EPA in a letter from Dr.

Jane Henney dated May 5, 2000.

The third company commented that it

should receive the amount of CFCs that

EPA proposed to allocate in the NPRM

since giving them a lesser amount

would, in their view, imperil the public

health by possibly reducing access to

the lower cost asthma medicines this

company might provide. In their

comment, this company did not provide

a statement of need based on the

amount of CFC–MDIs they planned to

produce for the year 2000. Therefore,

EPA and FDA asked the company to

provide EPA and FDA the same

information as the other two companies

had previously provided.

Representatives from EPA, FDA, and

this company held a conference call on

May 22, 2000 to discuss their request

(minutes are posted in docket # A–93–

39). Based on review of the information

that the company provided, FDA, in

consultation with EPA, determined that

the additional CFCs requested by this

company were not ‘‘necessary’’ as

defined in 604(d)(2) of the Act.

This same commenter stated that FDA

had failed to take into account several

critical issues including: (1) A reduced

allowance will encourage manufacturers

holding large allocations to withdraw

their generic products from the

marketplace in favor of more expensive,

less effective brand name products; (2)

the potential impact of the withdrawal

of certain generic CFC–MDI products

may result in a shortage of this drug, or

an increased market share for more

expensive brand name products; (3) if

other producers of this product continue

to have manufacturing problems, this

could lead to a shortage of the product

overall; (4) shrinking the availability of

CFCs may impair FDA’s ability to

continue strong Good Manufacturing

Practice (GMP) enforcement; and (5) the

reduced allocation will negatively

impact impoverished populations due

to a possible shortage of generic CFC–

MDIs.

EPA and FDA have concluded that

the year 2000 essential use allocations

already reflect the contingencies raised

by the commenter. As stated previously,

FDA, in consultation with EPA,

determined allocations for individual

companies based on historical CFC uses

while accounting for uncertainties in

manufacturing, including knowledge of

certain manufacturing problems,

uncertainties in the CFC supply chain,

and changes in the MDI market. These

allocations are calculated to insure that

the full range of medical needs is met

throughout the entire patient

population.

Three commenters stated that EPA

should not delay its consultation with

FDA and should issue the final

rulemaking for the calendar year 2001

allocation earlier in the year. One

commenter explained that only after

EPA grants a license for essential use

volumes can an MDI manufacturer place

CFC production orders, arrange

shipping and make other administrative

arrangements which can take up to 8

weeks before the CFCs arrive at the

manufacturing facility. For this reason,

this particular commenter suggested

that EPA begin rulemaking in June, 2000

and issue essential use allowances for

2001 in September, 2000.

EPA has planned the year 2001

allocation process in close coordination

with FDA, and is committed to

providing essential use allowances for

the year 2001 in as timely a manner as

possible while fulfilling all of our

obligations under the CAA. Although

we plan to begin the rulemaking process

in June, the nature of the rulemaking

process and the extensive coordination

necessary with FDA are such that

issuing a final rule in September of this

year may not be possible. As stated

earlier however, the Agency does plan

to issue a final rule allocating essential

use allowances for the year 2001 by

December, 2000.

Six commenters expressed surprise at

the adjustment of the amount of CFCs

allocated in the IFR for the year 2000,

given the figures in the proposal. EPA

proposed to allocate the amount of CFCs

approved by the Parties to the Montreal

Protocol for the year 2000. After

Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations 40529

consultation with FDA, EPA ultimately

allocated a lower amount. The process

set out by the Protocol Parties requires

national governments to nominate

amounts required for essential uses well

in advance of allocation. Making

responsible projections of need years in

advance of actual requirement presents

difficulties to both companies

requesting CFCs, and to national

governments. In past years EPA

allocated the entire amount approved by

the Parties and left it up to companies

to elect not to use their entire allocation

if it was not necessary. With this

system, often companies do not use

their entire allocation. In fact, in the

year 1999, EPA allocated 3665 metric

tons of CFCs, while only 2644 metric

tons were actually imported for this use.

Similarly, in 1998, 4,363 tons of CFCs

were allocated for use in medical

devices although only 2,235.6 tons were

actually imported or produced for MDIs

in that year. Beginning in the year 2000,

the CAA requires that EPA and FDA

consider what amount is necessary

before the allocation occurs. This year,

because the Agencies were adjusting to

the new process, they did not have time

to finish their consultation prior to

proposal. EPA and FDA nonetheless are

confident that the numbers actually

allocated better reflect medical need in

the U.S. for the year 2000 than the

numbers in either the NPRM or the IFR.

Recognizing that the process is new,

however, EPA elected to maximize

opportunity for stakeholder input by

publishing the revised determination as

an IFR. This procedure proved valuable,

since in the case of some commenters,

further information substantiated a

further refinement of the year 2000

allocation. As explained elsewhere in

the preamble, EPA plans to issue the

2001 NPRM after consulting with FDA.

This will result in a smoother process in

which all stakeholders will be able to

comment on the allocation, as well as

the allocation process itself, after the

NPRM is issued, obviating the need for

an IFR.

Five commenters were concerned

about the perceived lack of transparency

in the EPA/FDA consultation over the

amount of CFCs determined to be

necessary for each company. These

commenters felt that the FDA

methodology, assumptions and other

bases for determining the amounts

necessary should have been subject to

public review and comment, and that

this lack of transparency in the

allocation process should be remedied

in the year 2001 and beyond. One

commenter stated that EPA had

provided inadequate notice in violation

of the Administrative Procedures Act

(APA), and that FDA’s determination

did not contain sufficient information to

provide the commenter with an

opportunity to provide meaningful

comments on a number of significant

issues. (We note that because this

rulemaking was conducted under

section 307(d) of the CAA, the relevant

procedures are those contained in that

section rather than in the APA.) One

commenter stated that neither agency

placed any non-confidential information

on the record to support its

determination, and that EPA relied

excessively on the FDA determination

on the amount of CFCs necessary. This

commenter referred to section

307(d)(6)(C) of the CAA, which states

that ‘‘[t]he promulgated rule may not be

based (in part or in whole) on any

information or data which has not been

placed in the docket as of the date of

such promulgation.’’ In the opinion of

the commenter, contrary to Section

307(d)(6)(C), the IFR did not appear to

have been based on ‘‘information or

data’’ placed in the docket as of January

6, 2000. The commenter stated that the

docket contains little if any information

supporting EPA’s authorization of CFC

volumes, and no information supporting

FDA’s determination of the volume

deemed ‘‘necessary for use in medical

devices’’. As a result, the commenter

concluded that interested parties could

not comment in an informed manner on

the final allocation.

EPA undertook a variety of measures

to ensure that interested parties had an

opportunity for meaningful comment on

the allocation. The Agency published

the initial allocation as an interim final

rule, in order to encourage commenters

to supply important information and,

potentially, to affect the final allocation.

In response to a commenter’s request,

EPA extended the comment period to

ensure that commenters who wished to

supply important information had

adequate time to do so. In addition to

reviewing written submissions, both

EPA and FDA heard oral presentations

from companies that disagreed with the

interim final allocation. As described

below, EPA attempted to place in the

docket as much information as possible

regarding the factual data on which the

rule is based, and the methodology used

in obtaining the data and analyzing the

data. However, since much of the data

on which the rule is based is treated as

confidential business information, it has

not been possible to include all relevant

information in the public docket.

Dr. Jane Henney, Commissioner of the

U.S. Food and Drug Administration, in

her letter dated December 20, 1999, to

Carol M. Browner, Administrator, U.S.

EPA, set forth parameters used in

determining the amount of CFCs

necessary for MDIs in 2000. FDA

provided further information about its

revised determination in Dr. Henney’s

letters of March 6, 2000, May 5, 2000,

and June 13, 2000 (these documents are

filed in docket no. A–93–39). Composite

data on the amount of CFCs actually

used and the amount of CFCs allocated

to the U.S. is compiled each year in a

US CFC accounting framework available

in the docket. The docket also contains

EPA’s letters issued on October 1, 1999,

and October 13, 1999 pursuant to

section 114 of the CAA requesting

information from MDI manufacturers

regarding the specific products they

planned to produce using their essential

use allowances and the amount of CFCs

they would use for production in the

year 2000. The responses to these letters

contain confidential business

information and thus are not available

in the public docket. However, the types

of information requested can be

ascertained by examining the letters that

EPA sent out to the MDI manufacturers.

EPA provided FDA with the responses

to these letters in the course of our

consultation.

EPA agrees that the allocation in the

future should be as transparent a

process as possible while accounting for

the confidential nature of the data

employed to make the determination on

the amount of CFCs necessary. Briefly,

as a first step in assuring this

transparency, EPA plans to describe

fully in an upcoming NPRM the

proposed process for future

determinations, request comment on it,

and carefully review all comments. EPA

and FDA have planned a process which

will allow the determination on the

amount of CFCs necessary for each

company for the year 2001 to occur in

as open a manner as possible. At the

beginning of the process, EPA will send

out letters pursuant to section 114 of the

Act requesting information from each

potential essential use holder. These

letters will request information such as

the number of units of each product

produced in previous years, the number

of units produced in the first quarter of

this year, the gross target fill weight per

unit, the total CFC to be contained in

the product for 2000, the number of

units of each product anticipated to be

produced in 2001, the additional

amount of CFCs necessary for

production, and the total amount of

CFCs requested for each product in

2001. FDA will compare the information

provided by the companies to

information in annual reports submitted

to FDA by the pharmaceutical

40530 Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations

1The FDA proposed rule on determinations of

essentiality states that ‘‘a food, drug, device, or

cosmetic that is, consists in part of, or is contained

in, an aerosol product or other pressurized

dispenser that releases an ODS is an essential use

of the ODS under the Clean Air Act if paragraph

(e) of this section specifies the use of that product

as essential. For drugs, including biologics and

animal drugs, and for devices, an investigational

application or an approved marketing application

must be in effect, as applicable.’’

companies requesting an essential use

allocation. In general, FDA and EPA

will base the determination of necessary

amounts and the allocation on this

information. Thus, each company will

know what information it has submitted

as the basis for its own allocation, while

the process will protect against

disclosure of confidential business

information to competitors. In addition,

stakeholders will have an opportunity to

comment on the proposed allocation

prior to EPA issuing the final allocation

for the year 2001.

One commenter proposed a reporting

framework for companies to provide

information on their CFC use for 1999

and to project their needs for the year

2001. EPA appreciates this input, and

used the commenters’ suggested

reporting framework, along with other

information, as a starting point for our

discussions with FDA regarding the

information we will request from

companies as a basis for the year 2001

allocation. The reporting framework that

was agreed upon for the year 2001

incorporates most of the information

from this suggested framework, albeit in

a slightly different format.

Several commenters took issue with

EPA’s interpretation of the CAA

exemption for medical devices at

section 601(8)(B) of the Act. Some stated

that the term ‘‘approved’’ at 601(8)(B)

should refer to a product under an

approved NDA or ANDA, and not an

approved active moiety. One commenter

reasoned that EPA must interpret

‘‘approved’’ consistently in the

definition of medical device, as words

used in different parts of the same

statute are intended to have the same

meaning. Thus, since the commenter

believed that section 601(8)(A) refers to

approved drug products, the commenter

argued that section 601(8)(B) must also.

Another comment stated that EPA’s

reading of ‘‘approved and determined to

be essential’’ as a single action renders

the term ‘‘approval’’ meaningless, in

violation of principles of statutory

construction. One commenter also

stated that EPA’s reading of the word

‘‘approved’’ was inconsistent with the

FDA September 1, 1999 proposed rule

on the transition (64 FR 47735).1

EPA disagrees with these assessments

since the word ‘‘approved’’ in section

601(8)(A) refers to an approved

alternative and not an approved drug

product. We refer to the explanation in

the preamble to the FDA proposed rule

which states ‘‘although FDA approval

does constitute a determination that a

product is safe and effective on its own,

this finding does not constitute a

determination regarding whether one

product is a medically acceptable

alternative for another.’’ Further, FDA’s

proposed rule does not require the drug

product to be approved to receive CFCs.

Rather, both the current regulations

under 21 CFR 2.125(e) and the proposed

rule by FDA to revise 2.125 contain a

mechanism by which CFC use in an

investigational drug may be considered

essential.

Another commenter stated that

Section 601(8) of the CAA requires that

each drug product (i.e., ‘‘device,

product, drug, or drug delivery system’’)

be approved and determined to be

essential by FDA before it can qualify as

a medical device under the CAA. The

commenter goes on to state that under

accepted rules of statutory construction,

a list of specific items in a statute is

intended to be finite, not illustrative,

unless the statute expressly indicates

otherwise. Thus, the commenter argues

that because active moieties are not on

this list, FDA can only approve and

determine to be essential a device,

product, drug, or drug delivery system.

The commenter argues further that its

interpretation is bolstered by the Food,

Drug, and Cosmetic Act (FDCA), where

‘‘approved drug’’ has been held to mean

the entire drug product and not merely

the active ingredients in the drug

product. However, the commenter does

not recognize that the term ‘‘drug,’’ as

used in the FDCA, can mean either

‘‘drug product’’ or ‘‘active moiety.’’

EPA, in consultation with FDA, believes

that reading ‘‘drug’’ in this provision of

the Act to mean ‘‘active moiety’’ most

closely effectuates Congressional intent.

As stated in the preamble to the IFR,

it is impossible to read the term

‘‘approved’’ in section 601(8)(B) as

referring to approval of an New Drug

Application (NDA) or Abbreviated New

Drug Application (ANDA), considering

the context in which that term is used.

The passage states that the public must

have notice and an opportunity for

comment before the ‘‘device, product,

drug, or drug delivery system’’ is

‘‘approved and determined to be

essential.’’ FDA has informed us that

approvals of drug products under the

FDCA are issued without notice and

comment. Furthermore, as noted in the

preamble to the IFR, the statutory

language refers to actions taken by FDA,

in consultation with EPA. FDA does not

consult with EPA prior to approving

drug products under the FDCA. We refer

to the preamble for the IFR for a more

detailed discussion of this issue. As the

Supreme Court has noted: ‘‘It is a

fundamental canon of statutory

construction that the words of a statute

must be read in their context and with

a view to their place in the overall

statutory scheme.’’ Davis v. Michigan

Dept. of Treasury, 109 S. Ct. 1504

(1989). Here, the context makes clear

that ‘‘approval’’ cannot mean approval

of an NDA or ANDA. Thus, the use of

the terms ‘‘approved’’ and ‘‘determined

to be essential’’ in the same sentence

may simply be intended to clarify the

nature of the action: i.e.,FDA, in

consultation with EPA, makes a

determination of essentiality and in so

doing approves an exemption.

Three commenters stated that the

CAA does not delegate to the FDA the

authority to dictate the nomination

quantity and allocation of class I

substances for medical devices. Rather,

the CAA requires only that the

Administrator (of EPA) consult with the

Commissioner (of FDA) as to whether

the authorization of class I substances

for medical devices is necessary. The

commenters took issue with EPA’s

reading of the statute as directing the

Commissioner of the FDA to determine

the quantity of class I substances

necessary for medical devices. The

commenters believe that the CAA

requires the FDA to make a yes/no

decision regarding whether class I

substances are necessary for use in an

essential product, i.e., technically

necessary for the functioning of the

MDI. According to the commenters,

Title VI of the CAA requires FDA to

determine whether a particular

approved MDI using an ODS is ‘‘

essential,’’ and whether no safe and

effective alternatives exist. If these

questions are answered affirmatively,

then FDA must consult with EPA and

determine whether CFCs are

‘‘necessary’’ for use in MDIs, i.e.,

whether, as a technical matter, the

device needs this chemical to operate

properly. If so, then it is EPA’s

responsibility to determine ‘‘after notice

and opportunity for public comment’’

what CFC volume should be authorized

for use in those MDIs. Two commenters

went on to state there is no indication

that FDA is in a better position to make

decisions on quantity, and that EPA has

experience in evaluating the necessary

amount of CFCs from the Agency’s past

review of companies’ requests for class

I substances for use in medical devices.

Section 604(d)(2) of the Act states the

following: ‘‘The Administrator, after

notice and opportunity for public

Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations 40531

comment, shall, to the extent such

action is consistent with the Montreal

Protocol, authorize the production of

limited quantities of class I substances

solely for use in medical devices if such

authorization is determined by the

Commissioner [of FDA], in consultation

with the Administrator [of EPA], to be

necessary for use in medical devices’’

(emphasis added). It is clear that the

authorization in question may not be for

an indefinite amount but must be for

‘‘limited quantities.’’ It is equally clear

that the subject of the Commissioner’s

necessity determination is ‘‘such

authorization.’’ Thus, if the latter part of

the text quoted above were written in

the active voice, it would say: ‘‘if the

Commissioner, in consultation with the

Administrator, determines such

authorization to be necessary for use in

medical devices.’’ We note that the

expression ‘‘such authorization’’ refers

back to the phrase ‘‘authorize the

production of limited quantities of class

I substances solely for use in medical

devices.’’ Thus, the Commissioner of

FDA must consider not only whether

any production is necessary, but what

quantity of production is necessary.

Further, although EPA does have

some data on CFC usage (which is

shared with FDA), medical experts at

FDA are privy to confidential business

information regarding annual sales and

distribution of MDI products which

gives them far more complete

knowledge of the MDI market than EPA.

Because of their access to additional

information and the fact that their

medical expertise is integral to making

these decisions to protect the health of

asthmatics, EPA believes it is consistent

with Congressional intent to consult

with FDA in making decisions regarding

the amount of CFCs necessary for the

production of MDIs.

Another commenter stated that EPA,

in deferring to FDA’s decision regarding

the volume of essential use allowances,

renders meaningless the requirement

that EPA, not FDA, give interested

parties notice and opportunity to

comment on the allocation process. This

commenter believed that MDI

manufacturers must have meaningful

participation in the allocation process,

and that EPA has delegated this critical

decision to FDA, precluding such

participation.

EPA disagrees with this

characterization of the process leading

to the allocation. In fact, EPA

extensively reviewed the public

comments on the interim final rule with

FDA. This allowed a joint reassessment

of the determination of the amount of

CFCs necessary. The initial

determination on the amount of CFCs

necessary was revised based on

additional information submitted by

stakeholders in response to the interim

final rule. In the future, this same type

of consultation between the agencies

will occur on any comments that require

a reassessment of the amount of CFCs

necessary for use in medical devices.

With this model, it is clear that MDI

manufacturers do in fact have an avenue

for actively participating in the

allocation of CFCs for medical devices.

One commenter quoted a passage

from the legislative history of the 1990

Amendments (S. Rep No. 228, 101st

Cong., 1st Sess. 1989, 1990). The

commenter stated that this passage says

nothing about FDA being required to

determine the quantity of ODS that is

essential. In response, we note that the

passage simply does not provide any

information regarding interpretation of

the phrase: ‘‘if such authorization is

determined by the Commissioner, in

consultation with the Administrator, to

be necessary for use in medical

devices.’’ In fact, the original Senate

language regarding the exception for

medical devices was somewhat different

from what appears in the 1990

Amendments. Thus, this passage from

the legislative history is of limited use.

One commenter stated that EPA and

FDA’s interpretation of the definition of

medical device at section 601(8)(B)

could undermine the clear intent of

Congress in enacting Title VI to phaseout CFC-containing products. According

to the commenter, allowing new ODS

products with existing active moieties to

be automatically deemed essential can

only perpetuate the use of CFC MDIs.

The commenter goes on to assert that

this would likely encourage some U.S.

companies to continue to formulate new

CFC MDIs at the same time that other

companies are diligently working to

transition away from CFC products.

Finally, this commenter states that the

EPA and FDA interpretation is

inconsistent with the overarching

objective of the Montreal Protocol,

which is the phase-out of ODS.

FDA’s proposed rule on

determinations of essentiality will

govern the transition to CFC-free

alternatives in a manner that protects

both the environment and the health of

patients who require these medications.

EPA is managing this transition in

accordance with the provisions set forth

by the CAA and Decisions of the Parties

to the Montreal Protocol, and does not

believe that its interpretation of the

CAA as explained in this preamble will

in any way delay the transition to CFCfree alternatives. EPA is allocating

essential use allowances according to

FDA’s definition of essentiality to

ensure that patients continue to have

access to life saving asthma and

respiratory disease medication. The

potential entry of a new CFC-MDI

product that contains an active moiety

that is already considered essential

under both the Montreal Protocol and

FDA’s proposed transition rule would

not have any additional environmental

impact since the number of asthmatics

requiring medication does not increase

to reflect growth in of the number of

different products containing the same

active moiety.

One commenter stated that there is no

basis in the CAA for changing the

longstanding system for determining the

essential use allowance allocations, and

that there is no language in the CAA

that suggests an intention to modify the

essential use allocation system in any

respect in the year 2000.

This statement is incorrect. As

explained in the NPRM, and the IFR,

prior to the year 2000, EPA allocated

essential use exemptions under the

original phase-out schedule contained

in section 604(a) of the Act. This

schedule does not require the complete

phase-out of any ODS prior to calendar

year 2000. Under section 606 of the Act,

EPA was obligated to create an

accelerated phase-out through

regulation to match the accelerated

phase-out under the Protocol. However,

EPA had the flexibility to create

exemptions to the regulatory phase-out,

where such exemptions had been

approved under the Montreal Protocol.

Thus, for the past several years, EPA has

been able to authorize production and

import of ozone-depleting substances

for essential uses allowed under the

Protocol, without regard to whether the

Act contains exceptions for those uses,

as long as the total authorized

production does not exceed the amount

permitted by the Act. However, January

1, 2000, is the phase-out date under

Section 604 of the Act for all class I

substances with the exception of methyl

chloroform and methyl bromide.

Because the phase-out date for CFCs has

passed, EPA is no longer be able to

authorize production of that substance

on the basis of the slower phase-out

schedule under the Act. Therefore, in

this rulemaking, EPA has implemented

for the first time the essential use

exemption for medical devices in

section 604(d)(2).

We note that EPA clearly stated in

establishing the pre-2000 framework for

essential uses that it was not at that time

implementing the exemptions in section

604(d) of the statute, but was instead

simply ensuring that exemptions

approved under the Protocol were

consistent with the phase-out schedule

40532 Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations

in section 604(a). Thus, in its 1994

proposed rule, EPA stated: ‘‘Section 604

of the CAA authorizes the granting of

specific exemptions from the phase-out

schedules contained in the Clean Air

Act * * * [including] for limited

quantities of class I substances solely for

use in medical devices if such

authorization is determined to be

necessary * * * In today’s action, EPA

does not propose essential uses under

the provisions of the CAA. However,

EPA does propose to permit continued

production for the essential uses

authorized under the Protocol, so long

as these essential use exemptions do not

exceed amounts allowed in the schedule

contained in section 604(a) of the CAA.’’

59 FR 56283 (November 10, 1994).

Thus, it is clear that in establishing the

pre-2000 essential use framework, EPA

was working within the language of

section 604(a), and not section 604(d).

As a result, the commenter’s statement

that EPA is changing its ‘‘long standing

interpretation’’ of section 604(d)(2) is

incorrect.

One commenter stated that there is

nothing in the legislative history that

suggests any intention to modify the

system [of essential use allowances] that

has been followed for over a decade. In

this regard, the statutory text is clear on

its face. As explained above, in this

rulemaking EPA is interpreting CAA

section 604(d)(2) for the first time. In the

1990 Amendments, Congress

established the year 2000 as the phaseout date for most class I ODS. This is

reflected both in the table in 604(a) and

in 604(b), which states: ‘‘Effective

January 1, 2000 * * * it shall be

unlawful for any person to produce any

amount of a class I substance.’’ Section

604(d)(2) states that ‘‘notwithstanding

the termination of production required

by subsection (b),’’ EPA shall, if certain

requirements are met, ‘‘authorize the

production of limited quantities of class

I substances solely for use in medical

devices.’’ Thus, Congress clearly gave

the year 2000 special significance, and

just as clearly indicated that section

604(d)(2) governs the essential use

process with respect to medical devices

after January 1, 2000. As a result, EPA

does not have the option of continuing

with the pre-2000 essential use process,

but rather must implement section

604(d)(2).

This commenter also stated that FDA

and EPA had acted in contravention of

the Waxman-Hatch Act by reducing the

amount of essential use allowances

available to a generic MDI manufacturer.

The commenter went on to point out

that the prevalence of asthma is

increasing in this country, in particular

among low income and minority

populations. They state that EPA and

FDA’s actions reducing the allocation of

CFCs for a company that produces lowcost generic MDIs threatens the public

health and represents an unreasonable

agency action.

EPA disagrees strongly with this

characterization. EPA in allocating CFCs

for use in metered dose inhalers, and

FDA in setting up the framework for the

transition to CFC-free asthma

medications, are committed to managing

the transition in a manner that in no

way compromises the public health of

any population while carrying out a

Congressional directive. Congress

clearly did not intend for EPA to

authorize unlimited amounts of CFCs

for use in MDIs. Instead, section

604(d)(2) requires that EPA only allocate

the amount of CFCs that are ‘‘necessary’’

as determined by FDA in consultation

with EPA. Both agencies are committed

to providing enough essential use

allowances to protect the public health

while fulfilling our obligations under

the CAA and the Montreal Protocol.

Additionally, in the case of this

particular company, the allocation they

received in the IFR was higher than the

largest amount of CFCs they have used

to produce MDIs in any year since 1996.

While, EPA and FDA understand the

need for this and all companies to have

some flexibility on the amount of CFCs

available to them, in this particular case,

both Agencies believe that a sufficient

amount of flexibility was already built

into the allocation in the IFR. Thus, EPA

and FDA believe that the availability of

low cost generic drugs to poor

populations will not be affected by

allocating CFCs to this company in the

amount published in the IFR.

This commenter also stated that the

impact on the ozone layer from CFCMDIs is negligible. Under the terms of

the Montreal Protocol and as mandated

by the CAA, EPA implements the phaseout of the production and import of

CFCs for all uses. At the same time,

Congress and the Parties to the Protocol

understood the need to continue to

provide CFCs to produce CFC-MDIs

until safe and effective alternatives are

available. As evidenced by today’s rule

and the essential use allocation process

since 1996, EPA and FDA are also

committed to providing CFCs for

necessary for use in MDIs until a

product is no longer considered

essential.

One commenter stated that FDA and

EPA now have discretionary authority

under the CAA to require de novo

review of the essentiality of all CFCcontaining products. Section 604 of the

CAA provides for the phase out of all

class I substances by January 1, 2000.

The use of CFCs in MDIs is exempted

from this requirement by section

604(d)(2) which authorized the use of

CFCs in MDIs but only to the extent

‘‘consistent with the Montreal

Protocol.’’ Under the Montreal Protocol,

Decision IV/25 states that the use of

CFCs in an MDI product is essential

only if the product is ‘‘necessary for the

health * * * of society’’. This

commenter also states that it is evident

that new CFC MDI products containing

the same active moieties already

available in existing products do not

automatically meet this criteria.

The commenter may be confusing the

domestic and international processes for

determining essentiality. The criteria for

determining essentiality that appear in

Decision IV/25 are used only in the

international process. The Parties apply

the criteria in Decision IV/25 in

deciding whether a specified quantity of

CFCs is essential during a specified year

for a specified use. In managing the

domestic process, EPA and FDA look to

the requirements of Title VI of the CAA,

in particular the language of sections

601(8) and 604(d)(2). One of the

requirements of section 604(d)(2) is that

allocations are to be ‘‘consistent with

the Montreal Protocol.’’ EPA considers

allocations to be ‘‘consistent with the

Montreal Protocol’’ if the Parties have

approved the allocated quantities (or

greater quantities) for the specified uses

during the specified time period. Hence,

EPA will interpret this comment as a set

of recommendations for the application

of the criteria in Decision IV/25 to

future nominations.

One commenter stated that while they

were pleased to see that EPA had not

allocated as much as proposed, that EPA

still was not in compliance with Section

604 of the CAA. This commenter stated

that pursuant to their comments

submitted on the NPRM, EPA should

not authorize essential use allowances

for the production of CFC-based

albuterol MDIs since there is a CFC-free

alternative on the market. EPA believes

that we addressed this comment fully in

the preamble to the Interim Final Rule

(65 FR 716).

One commenter stated that she is an

asthma and allergy sufferer and that she

currently uses a variety of medications

to treat these conditions, including

MDIs containing CFCs. However, the

commenter stated that she would

appreciate help in getting better

medications that contain no CFC’s since

she is also an environmentalist and also

concerned about the environment.

EPA is committed to balancing the

dual goals of protecting patient health

and the environment by nominating

essential uses to the Parties to the

Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations 40533

Montreal Protocol and allocating

essential use allowances in a manner

consistent with both the Protocol and

the CAA. We understand that it is

critical that these essential use

allowances continue to be provided to

companies who produce medical

devices essential for the health and

well-being of asthmatics in this country.

However, EPA continues to work hard

in areas such as outreach and education

to facilitate the transition to CFC-free

products for the treatment of asthma

and chronic obstructive pulmonary

disease. EPA refers the commenter to

the following sources of information

which provide information on the

current status of the transition to CFCfree alternatives:

1. The EPA stratospheric protection

website at http://www.epa.gov/ozone/

mdi/mdi.html

2. The FDA website at http://

www.fda.gov/cder/mdi/

3. The National Asthma Education

and Prevention Program website at

http://www.nhlbi.nih.gov/health/public/

lung/asthma/mdiintro.htm.

V. Administrative Requirements

A. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates

Reform Act of 1995 (UMRA), P.L. 104–

4, establishes requirements for Federal

agencies to assess the effects of their

regulatory actions on State, local, and

tribal governments and the private

sector.

Under section 202 of the UMRA, EPA

generally must prepare a written

statement, including a cost-benefit

analysis, for proposed and final rules

with ‘‘Federal mandates’’ that may

result in expenditures by State, local,

and tribal governments, in the aggregate,

or by the private sector, of $100 million

or more in any one year. Before

promulgating an EPA rule for which a

written statement is needed, section 205

of the UMRA generally requires EPA to

identify and consider a reasonable

number of regulatory alternatives and

adopt the least costly, most costeffective or least burdensome alternative

that achieves the objectives of the rule.

The provisions of section 205 do not

apply when they are inconsistent with

applicable law. Moreover, section 205

allows EPA to adopt an alternative other

than the least costly, most cost-effective

or least burdensome alternative if the

Administrator publishes with the final

rule an explanation why that alternative

was not adopted. Section 204 of the

UMRA requires the Agency to develop

a process to allow elected state, local,

and tribal government officials to

provide input in the development of any

proposal containing a significant

Federal intergovernmental mandate.

Before EPA establishes any regulatory

requirements that may significantly or

uniquely affect small governments,

including tribal governments, it must

have developed under section 203 of the

UMRA a small government agency plan.

The plan must provide for notifying

potentially affected small governments,

enabling officials of affected small

governments to have meaningful and

timely input in the development of EPA

regulatory proposals with significant

Federal intergovernmental mandates,

and informing, educating, and advising

small governments on compliance with

the regulatory requirements.

Today’s rule contains no Federal

mandates (under the regulatory

provisions of Title II of the UMRA) for

State, local, or tribal governments or the

private sector. Because this rule imposes

no enforceable duty on any State, local

or tribal government it is not subject to

the requirements of sections 202 and

205 of the UMRA. EPA has also

determined that this rule contains no

regulatory requirements that might

significantly or uniquely affect small

governments; therefore, EPA is not

required to develop a plan with regard

to small governments under section 203.

Finally, because this rule does not

contain a significant intergovernmental

mandate, the Agency is not required to

develop a process to obtain input from

elected state, local, and tribal officials

under section 204.

B. Executive Order 12866

Under Executive Order 12866 (58 FR

51735, October 4, 1993), the Agency

must determine whether this regulatory

action is Significant and therefore

subject to OMB review and the

requirements of the Executive Order.

The Order defines Significant regulatory

action as one that is likely to result in

a rule that may:

(1) Have an annual effect on the

economy of $100 million or more, or

adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State, local, or tribal governments or

communities;

(2) Create a serious inconsistency or

otherwise interfere with an action taken

or planned by another agency;

(3) Materially alter the budgetary

impact of entitlement, grants, user fees,

or loan programs or the rights and

obligations of recipients thereof; or (4)

Raise novel legal or policy issues arising

out of legal mandates, the President’s

priorities, or the principles set forth in

the Executive Order. It has been

determined by OMB and EPA that this

action is not a Significant regulatory

action under the terms of Executive

Order 12866 and is therefore not subject

to OMB review under the Executive

Order.

C. Paperwork Reduction Act

This action does not add any

information collection requirements or

increase burden under the provisions of

the Paperwork Reduction Act, 44 U.S.C.

3501 et seq. The Office of Management

and Budget (OMB) previously approved

the information collection requirements

contained in the final rule promulgated

on May 10, 1995, and assigned OMB

control number 2060–0170 (EPA ICR

No. 1432.16).

Burden means the total time, effort, or

financial resources expended by persons

to generate, maintain, retain, or disclose

or provide information to or for a

Federal agency. This includes the time

needed to review instructions; develop,

acquire, install, and utilize technology

and systems for the purposes of

collecting, validating, and verifying

information, processing and

maintaining information, and disclosing

and providing information; adjust the

existing ways to comply with any

previously applicable instructions and

requirements; train personnel to be able

to respond to a collection of

information; search data sources;

complete and review the collection of

information; and transmit or otherwise

disclose the information.

An Agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless it displays a currently valid OMB

control number. The OMB control

numbers for EPA’s regulations are listed

in 40 CFR Part 9 and 48 CFR Chapter

15.

D. Executive Order 13084: Consultation

and Coordination With Indian Tribal

Governments

Under Executive Order 13084, EPA

may not issue a regulation that is not

required by statute, that significantly or

uniquely affects the communities of

Indian tribal governments, and that

imposes substantial direct compliance

costs on those communities, unless the

Federal government provides the funds

necessary to pay the direct compliance

costs incurred by the tribal

governments, or EPA consults with

those governments. If EPA complies by

consulting, Executive Order 13084

requires EPA to provide to the Office of

Management and Budget, in a separately

identified section of the preamble to the

rule, a description of the extent of EPA’s

prior consultation with representatives

40534 Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations

of affected tribal governments, a

summary of the nature of their concerns,

and a statement supporting the need to

issue the regulation. In addition,

Executive Order 13084 requires EPA to

develop an effective process permitting

elected officials and other

representatives of Indian tribal

governments to provide meaningful and

timely input in the development of

regulatory policies on matters that

significantly or uniquely affect their

communities.’’ Today’s rule does not

significantly or uniquely affect the

communities of Indian tribal

governments. Accordingly, the

requirements of section 3(b) of

Executive Order 13084 do not apply to

this rule.

E. Regulatory Flexibility

After considering the economic

impacts of today’s final rule on small

entities, EPA has determined that it is

not necessary to prepare a regulatory

flexibility analysis in connection with

this final rule. EPA has also determined

that this action will not have a

significant economic impact on a

substantial number of small entities.

This rule does not have a significant

impact on a substantial number of small

entities. The only entities that are

directly affected by this allocation are

those to which CFCs and other ODSs are

being allocated. There are only ten

entities which are affected by this

rulemaking (see table 1 above). This rule

does not have an adverse economic

impact on any entity because it grants

exceptions to a pre-existing ban.

F. Applicability of Executive Order

13045: Protection of Children From

Environmental Health Risks and Safety

Risks

Executive Order 13045: ‘‘Protection of

Children from Environmental Health

risks and Safety Risks’’ (62 FR 19885,

April 23, 1997) applies to any rule that

(1) is determined to be ‘‘economically

significant’’ as defined under Executive

Order 12866, and (2) concerns an

environmental health and safety risk

that EPA has reason to believe may have

a disproportionate effect on children. If

the regulatory action meets both criteria,

the Agency must evaluate the

environmental health or safety effects of

the planned rule on children, and

explain why the planned regulation is

preferable to other potentially effective

and reasonably feasible alternatives

considered by the Agency. EPA

interprets Executive Order 13045 as

applying only to those regulatory

actions that are based on health or safety

risks, such that the analysis required

under section 5–501 of the Order has

the potential to influence the regulation.

This rule is not subject to Executive

Order 13045 because it implements the

phase-out schedule and exemptions

established by Congress in Title VI of

the Clean Air Act.

G. National Technology Transfer and

Advancement Act

Section 12(d) of the National

Technology Transfer and Advancement

Act of 1995 (‘‘NTTAA), Public Law No.

104–113, section 12(d) (15 U.S.C. 272

note) directs EPA to use voluntary

consensus standards in this regulatory

activities unless to do so would be

inconsistent with applicable law or

otherwise impractical. Voluntary

consensus standards are technical

standards (e.g., materials specifications,

test methods, sampling procedures, and

business practices) that are developed or

adopted by voluntary consensus

standards bodies. The NTTAA directs

EPA to provide Congress, through OMB,

explanations when the Agency decides

not to use available and applicable

voluntary consensus standards. This

rule does not involve technical

standards. Therefore, EOA did not

consider the use of any voluntary

consensus standards.

H. Executive Order 13132 (Federalism)

Executive Order 13132, entitled

‘‘Federalism’’ (64 FR 432255, August 10,

1999), requires EPA to develop an

accountable process to ensure

‘‘meaningful and timely input by State

and local officials in the development of

regulatory policies that have federalism

implications.’’ ‘‘Policies that have

federalism implications’’ is defined in

the Executive Order to include

regulations that have ‘‘substantial direct

effects on the States, on the relationship

between the national government and

the States, or on the distribution of

power and responsibilities among the

various levels of government.’’ Under

Executive Order 13132, EPA may not

issue a regulation that has federalism

implications, that imposes substantial

direct compliance costs, and that is not

required by State and local

governments, or EPA consults with

State and local officials early in the

process of developing the proposed

regulation. EPA also may not issue a

regulation that has federalism

implications and theat preempts State

law unless the Agency consults with

State and local officials early in the

process of developing the proposed

regulation.

If EPA complies by consulting,

Executive Order 13132 requires EPA to

provide the Office of Management and

Budget (OMB), in a separately identified

section of the preamble to the rule, a

federalism summary impact statement

(FSIS). The FSIS must include a

description of the extent of EPA’s prior

consultation with State and local

officials, a summary of the nature of

their concerns and the agency’s position

supporting the need to issue the

regulation, and a statement of the extent

to which the concerns of State and local

officials have been met. Also, when EPA

transmits a draft final rule with

federalism implications to OMB for

review pursuant to Executive Order

12866, EPA must include a certification

from the agency’s Federalism Official

stating that EPA has met the

requirements of Executive Order 13132

in a meaningful and timely manner.

This final rule will not have substantial

direct effects on the States, on the

relationship between the national

government and the States, or on the

distribution of power and

responsibilities among the various

levels of government, as specified in

Executive Order 13132. This final rule

will affect only the ability of private

entities and the national government to

request production of controlled ozonedepleting substances. Thus, the

requirements of section 6 of the

Executive Order to not apply to this

rule.

VI. Judicial Review

Under Section 307(b)(1) of the Act,

EPA finds that these regulations are of

national applicability. Accordingly,

judicial review of the action is available

only by the filing of a petition for review

in the United States Court of Appeals

for the District of Columbia Circuit

within sixty days of publication of the

action in the Federal Register. Under

Section 307(b)(2), the requirements of

this rule may not be challenged later in

the judicial proceedings brought to

enforce those requirements.

VII. Congressional Review

The Congressional Review Act, 5

U.S.C. 801 et seq., as added by the Small

Business Regulatory Enforcement

Fairness Act of 1996, generally provides

that before a rule may take effect, the

agency promulgating the rule must

submit a rule report, which includes a

copy of the rule, to each House of the

Congress and to the Comptroller General

of the United States. Section 808 allows

the issuing agency to make a rule

effective sooner than otherwise

provided by the CRA if the agency

makes a good cause finding that notice

and public procedure is impracticable,

unnecessary or contrary to the public

interest. This determination must be

supported by a brief statement. As

Federal Register / Vol. 65, No. 127 / Friday, June 30, 2000 / Rules and Regulations 40535

stated previously, EPA has made such a

good cause finding, including the

reasons therefor, and established an

effective date of June 30, 2000. EPA will

submit a report containing this rule and

other required information to the U.S.

Senate, the U.S. House of

Representatives, and the Comptroller

General of the United States prior to

publication of the rule in the Federal

Register. This action is not a ‘‘major

rule’’ as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 82

Environmental protection,

Administrative practice and procedure,

Air pollution control, Chemicals,

Chlorofluorocarbons, Exports, Imports,

Ozone layer, Reporting and

recordkeeping requirements.

Dated: June 22, 2000.

Carol M. Browner,

Administrator.

40 CFR Part 82 is to be amended as

follows:

PART 82—PROTECTION OF

STRATOSPHERIC OZONE

1. The authority citation for part 82

continues to read as follows:

Authority: 42 U.S.C. 7414, 7601,7671–

7671q.

Subpart A—Production and

Consumption Controls

2. Section 82.4 is amended by revising

the table in paragraph (t)(2) to read as

follows:

§ 82.4 Prohibitions.

* * * * *

(t) * * *

(2) * * *

TABLE 1—ESSENTIAL USE ALLOCATION FOR CALENDAR YEAR 2000

Company Chemical Quantity

(metric tons)

(i) Metered Dose Inhalers (for oral inhalation) for Treatment of Asthma and Chronic Obstructive Pulmonary Disease (in metric tons)

International Pharmaceutical Aerosol Consortium (IPAC)—Medeva Americas, Inc.,

Boehringer Ingelheim Pharmaceuticals, Glaxo Wellcome, Aventis (formerly RhonePoulene Rorer), 3M.

CFC–11 or ..............................

CFC–12 or ..............................

CFC–114 .................................

2038.0

Medisol Laboratories, Inc. .......................................................................................................... CFC–11 or ..............................

CFC–12 or ..............................

CFC–114 .................................

49.0

Schering Corporation ................................................................................................................. CFC–11 or ..............................

CFC–12 or ..............................

CFC–114 .................................

1048.0

Sciarra Laboratories, Inc. ........................................................................................................... CFC–11 or ..............................

CFC–12 or ..............................

CFC–114 .................................

1.3

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

National Aeronautics and Space Administration (NASA)/Thiokol Rocket ................................. Methyl Chloroform .................. 56.7

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

[FR Doc. 00–16628 Filed 6–29–00; 8:45 am]

BILLING CODE 6560–50–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

Office of Inspector General

42 CFR Parts 409, 410, 411, 412, 413,

419, 424, 489, 498, and 1003

[HCFA–1005-N5]

RIN 0938–AI56

Medicare Program; Prospective

Payment System for Hospital

Outpatient Services; Delay of Effective

Date

AGENCY: Health Care Financing

Administration (HCFA), HHS, and

Office of Inspector General (OIG), HHS.

ACTION: Notice of delay of effective date

for final rule with comment period.

SUMMARY: This document delays the

effective date on a final rule with

comment period published in the

Federal Register on April 7, 2000 (65 FR

18434). That rule implemented a

prospective payment system for hospital

outpatient services furnished to

Medicare beneficiaries, as set forth in

section 1833(t) of the Social Security

Act. It also established requirements for

provider departments and providerbased entities, and it implemented

section 9343(c) of the Omnibus Budget

Reconciliation Act of 1986, which

prohibits Medicare payment for

nonphysician services furnished to a

hospital outpatient by a provider or

supplier other than a hospital, unless

the services are furnished under an

arrangement with the hospital. In

addition, the rule established in

regulations the extension of reductions

in payment for costs of hospital

outpatient services required by section

4522 of the Balanced Budget Act of

1997, as amended by section 201(k) of

the Balanced Budget Refinement Act of

1999. The effective date is delayed from

July 1, 2000 to August 1, 2000.

DATES: Effective date: August 1, 2000,

except that the changes to

§ 412.24(d)(6), new § 413.65, and the

changes to § 489.24(h), § 498.2, and

§ 498.3 are effective October 10, 2000.

Applicability date: For Medicare

services furnished by hospitals that are

subject to the prospective payment

system, including hospitals excluded

from the inpatient prospective payment

system, and by community mental

health centers, the applicability date for

implementation of the hospital

outpatient prospective payment system

is August 1, 2000.

FOR FURTHER INFORMATION CONTACT:

Janet Wellham, (410) 786–4510.

SUPPLEMENTARY INFORMATION:

I. Background

On April 7, 2000, we issued a final

rule with comment period in the

Federal Register (65 FR 18434) that

reflected the provisions of the

September 8, 1998 proposed rule (63 FR