ECONOMIC IMPACT ANALYSIS 

of

Schedules of Controlled Substances: Rescheduling Hydrocodone Combination Products 

from Schedule III to Schedule II

[Docket No. DEA-389]

Drug Enforcement Administration

U.S. Department of Justice

February 2014
TABLE OF CONTENTS

1. INTRODUCTION..............................................................................................................................................3

2. REGULATORY ANALYSES INVESTIGATED ...........................................................................................4

2.1 EXECUTIVE ORDERS 12866 AND 13563 ...........................................................................................................4

2.2 REGULATORY FLEXIBILITY ACT ......................................................................................................................5

2.3 UNFUNDED MANDATES REFORM ACT OF 1995................................................................................................6

2.4 CONGRESSIONAL REVIEW ACT OF 1995...........................................................................................................6

3. ANTICIPATED ECONOMIC IMPACT OF REGULATORY ACTION ....................................................7

3.1 GENERAL RELATIONSHIP BETWEEN REGISTRATIONS, ENTITIES, AND SMALL ENTITIES ...................................7

3.2 AFFECTED ENTITIES.........................................................................................................................................8

3.2.1 Number of Handlers of HCPs (Registrations) .......................................................................................8

3.2.2 Number of Entities and Small Entities Handling HCPs.......................................................................10

3.3 ANNUAL COST OF THE RULE..........................................................................................................................13

3.3.1 Costs Associated with Registration Requirements ..............................................................................13

3.3.2 Costs Associated with Storage Requirements......................................................................................14

3.3.3 Costs Associated with Labeling and Packaging Requirements............................................................20

3.3.4 Costs Associated with Quota Requirements........................................................................................21

3.3.5 Costs Associated with Recordkeeping and Reporting Requirements..................................................21

3.3.6 Costs Associated with Ordering Requirements....................................................................................22

3.3.7 Costs Associated with Prescription Requirements...............................................................................23

3.3.8 Costs Associated with Disposal Requirements....................................................................................24

3.3.9 Cost Summary .....................................................................................................................................24

3.4 IMPACT ON SMALL ENTITIES..........................................................................................................................25

3.4.1 Criteria for “Significant” Economic Impact ........................................................................................25

3.4.2 Analysis...............................................................................................................................................25

3.4.3 Criteria for “Substantial” Number .......................................................................................................28

3.5 EXAMINATION OF INDUSTRY SEGMENTS WITH SIGNIFICANT ECONOMIC IMPACTS ........................................29

4. ECONOMIC ANALYSIS RESULTS.............................................................................................................29

4.1 EXECUTIVE ORDERS 12866 AND 13563 .........................................................................................................29

4.2 REGULATORY FLEXIBILITY ACT ....................................................................................................................29

4.3 UNFUNDED MANDATES REFORM ACT OF 1995..............................................................................................30

4.4 CONGRESSIONAL REVIEW ACT OF 1995.........................................................................................................30

APPENDIX A: REGISTRANT LANDSCAPE......................................................................................................31

APPENDIX B: BUSINESSES WITH IMPACT 1% OR MORE OF ANNUAL REVENUE............................40
1. INTRODUCTION

This document describes the economic analysis conducted by the Drug Enforcement Administration 

(DEA) in support of the regulatory analyses statements published with the notice of proposed rulemaking 

(NPRM) to reschedule hydrocodone combination products (HCPs) from schedule III to schedule II of the 

Controlled Substances Act (CSA) [Docket No. DEA-389]. The proposed action is based on a 

recommendation from the Assistant Secretary for Health of the HHS and on an evaluation of all other 

relevant data by the DEA. Pursuant to the provisions of the CSA (21 U.S.C. 811(a)), this action is a 

formal rulemaking “on the record after opportunity for a hearing.” Such proceedings are conducted 

pursuant to the provisions of the Administrative Procedure Act (APA) (5 U.S.C. 551-559), 21 CFR 

1308.41-1308.45, and 21 CFR part 1316 subpart D. If finalized, this action would impose the regulatory 

controls and administrative, civil, and criminal sanctions of schedule II controlled substances on any 

person who handles hydrocodone combination products. 

Dihydrocodeinone (hydrocodone), a semisynthetic opioid derived from codeine, is a narcotic drug as 

defined by 21 U.S.C. 802(17). Hydrocodone was listed in schedule II of the CSA upon the enactment of 

the CSA in 1971. Pub.L. 91-513, 84 Stat. 1236, sec. 202(c), schedule II, paragraph (a), clause (1) 

(codified at 21 U.S.C. 812(c)); initially implemented at 21 CFR 1308.12(b)(1)(x) (36 FR 7776, April 24, 

1971) (currently implemented at 21 CFR 1308.12(b)(1)(vi)). At that time, hydrocodone combination 

products in specified doses (containing no greater than 15 milligrams (mg) hydrocodone per dosage unit 

or not more than 300 mg hydrocodone per 100 milliliters (mL)) were listed in schedule III of the CSA 

when formulated with specified amounts of an isoquinoline alkaloid of opium or one or more 

therapeutically active nonnarcotic ingredients. Pub.L. 91-513, 84 Stat. 1236, sec. 202(c), schedule III, 

paragraph (d), clauses (3) and (4) (codified at 21 U.S.C. 812(c)); initially implemented at 21 CFR 

1308.13(e)(3) and (4) (36 FR 7776, April 24, 1971) (currently implemented at 21 CFR 1308.13(e)(1)(iii) 

and (iv)). A non-exhaustive listing of currently marketed HCPs include Vicodin®, Vicoprofen®, Lortab®, 

Lorcet®, Norco®, Hydrocet®, Anexsia®, Azdone®, and Zydone®. Any other products that contain single 

3
entity hydrocodone or combinations of hydrocodone and other substances outside the range of specified 

doses are listed in schedule II of the CSA.

2. REGULATORY ANALYSES INVESTIGATED

2.1 EXECUTIVE ORDERS 12866 AND 13563

Pursuant to Executive Order 12866 (58 FR 51735, Sept. 30, 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

For purposes of E.O. 12866, “regulatory action” “means any substantive action by an agency 

(normally published in the Federal Register) that promulgates or is expected to lead to the promulgation 

of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and 

notices of proposed rulemaking.”2 Of note, however, in the context of CSA scheduling actions is the fact 

that Executive Order 12866 excepts from the meaning of a “regulation” or “rule”: (1) “regulations or 

rules issued in accordance with the formal rulemaking provisions of 5 U.S.C. 556, 557;” and (2) “any 

other category of regulations exempted by the Administrator of OIRA.”3

 Pursuant to these categorical 

1 Exec. Order No. 12866, section 3(f). 2 Id., sec. 3(e). 3 Id. sec. 3(d). (Sec. 3(d) also exempts from the definition of regulation or rule regulations or rules that pertain to military or 

foreign affairs function of the United States, other than procurement regulations and regulations involving the import or export of 

4

 
exemptions, DEA actions concerning the scheduling of controlled substances are exempt from the 

centralized review requirements of E.O. 12866.4

 Executive Order 13563 (76 FR 3821, Jan. 21, 2011) 

affirms and supplements Executive Order 12866.

2.2 REGULATORY FLEXIBILITY ACT

The Regulatory Flexibility Act (RFA) 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.5 “The RFA does not seek preferential treatment for small 

entities, require agencies to adopt regulations that impose the least burden on small entities, or 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.”6

 

Three types of small entities are defined in the RFA: small businesses, small organizations, and small 

governmental jurisdictions. Pursuant to sec. 601(3) of the RFA, the term “small business” has the same 

meaning as the term “small business concern” under sec. 3 of the Small Business Act. A small business 

concern is an enterprise that is “independently owned and operated” and “not dominant in its field of 

operation.”7

 Under the authority of the Small Business Act, the Small Business Administration (SBA)

Administrator has established standards to be used in the determination of a small business concern.

8

 

SBA size standards have been established for the types of economic activity or industry utilizing the 

non-defense articles and services; and regulations or rules that are limited to agency organization, management, or personnel 

matters.). 4 21 U.S.C. 811(a) (“Rules of the Attorney General under this subsection shall be made on the record after opportunity for a 

hearing pursuant to the rulemaking procedures prescribed by subchapter II of chapter 5 of Title 5.”); see also letter from Sally 

Katzen, Administrator, OIRA, OMB to Eleanor D. Acheson, Assistant Attorney General, OPD, USDOJ (Feb. 4, 1994)

(exempting from OMB review requirements of EO 12866 DEA rulemaking actions concerning the scheduling of controlled 

substances which are made on the record after opportunity for a hearing pursuant to the Administrative Procedure Act). 5 Pub.L. 96-354, 94 Stat. 1164 (1980) (codified at 5 U.S.C. 601). 6 SBA OFFICE OF ADVOCACY, A GUIDE FOR GOVERNMENT AGENCIES: HOW TO COMPLY WITH THE REGULATORY FLEXIBILITY ACT 1

(May 2012).

7 15 U.S.C. 632.

8 Id.; See also SIZE STANDARDS DIVISION, OFFICE OF GOV’T CONTRACTING &BUSINESS DEVELOPMENT, SBA SIZE STANDARDS 

METHODOLOGY (April 2009) (available at www.sba.gov/site/default/files/size_standards/methdology.pdf) (describing SBA 

methodology for establishing and adjusting its small business size standards pursuant to the Small Business Act and related 

legislative guidelines). 

5

 
North American Industry Classification System (NAICS) classifications. The SBA sets the maximum 

size standards—in millions of dollars or number of employees—allowed for concerns (including their 

affiliates) to be designated as small.9 Section 601(4) of the RFA defines a small organization as any notfor-profit enterprise that is independently owned and operated and not dominant in its field. Section 

601(5) of the RFA defines small governmental jurisdictions as governments of cities, counties, towns, 

townships, villages, school districts, or special districts with a population of less than 50,000.

Most DEA registrants are small businesses or employed by small businesses as defined under the 

RFA; therefore, for the purposes of this analysis, the terms “business” and “entity” are used 

interchangeably.

2.3 UNFUNDED MANDATES REFORM ACT OF 1995

The Unfunded Mandates Reform Act (UMRA)10

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 SLTGs, 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 OF 1995

Under the Congressional Review Act (CRA), 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).11 Rules 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 

9 13 CFR 121.201. 10 Pub.L. 104-4, 109 Stat. 48 (1995) (codified at 2 U.S.C. 1501 et seq.). 11 Pub.L. 104-121, sec. 251, 110 Stat. 847 (1996) (codified at 5 U.S.C. 801-808).

6

 
increase in costs or prices; or significant adverse effects on competition, employment, investment, 

productivity, or the ability of United States companies to compete with foreign companies.

3. ANTICIPATED ECONOMIC IMPACT OF REGULATORY ACTION

3.1 GENERAL RELATIONSHIP BETWEEN REGISTRATIONS, ENTITIES, AND SMALL ENTITIES

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

distributors, and pharmacies, as well as individuals such as practitioners12 and mid-level practitioners.

13 

It is very common for businesses and individuals to hold more than one 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). 

The DEA estimates the number of entities represented by the number of DEA controlled substance 

registrations by relating NAICS classification data to the various DEA business activity registration types. 

Utilizing this information, the DEA broadly classifies registrations into two categories: (1) registrations 

associated with industries where very few businesses in the industry are DEA registrants; and (2) 

registrations associated with industries where most businesses in the industry are DEA registrants. The 

first category includes manufacturers, distributors, importers and exporters. Only a small fraction of all 

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

“practitioner” (physicians, veterinarians, podiatrists, dentists) but does not include hospitals/clinics, pharmacists, pharmacies, or

mid-level practitioners as defined below. 13 For the purposes of this Economic Impact Analysis, “mid-level practitioner” means an individual registered with the DEA as a 

“mid-level practitioner” but does not include practitioners as defined above. Examples of mid-level practitioners include, but are 

not limited to, health care providers such as nurse practitioners, nurse midwives, nurse anesthetists, clinical nurse specialists and 

physician assistants.

7

 
businesses engaged in these activities across the United States are DEA registrants. The second category 

includes pharmacies, hospitals/clinics, offices of physicians, etc. In contrast to the first category, nearly 

all the businesses engaged in these activities across the United States are DEA registrants, employ 

registrants, or represent multiple registrations. Based on this information, the DEA utilizes certain 

assumptions unless more specific business information is readily available.

• The DEA estimates a 1-to-1 entity-to-registration ratio for manufacturers, distributors, and 

importers/exporters (“category 1”). 

• The DEA utilizes the number of entities in the NAICS codes as an estimate for the number 

of entities for pharmacies, hospitals/clinics, offices of physicians, etc. (“category 2”). 

Specifically, the DEA estimates:

o A 0.74-to-1 entity-to-registration ratio for pharmacies; and

o A 0.23-to-1 entity-to-registration ratio for practitioners, mid-level practitioners, and 

hospitals/clinics (combined). 

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

used by the DEA to determine the entity-to-registration ratios and the percentages of entities that are 

small entities.

3.2 AFFECTED ENTITIES

3.2.1 Number of Handlers of HCPs (Registrations)

HCPs are the most frequently prescribed controlled substance in the United States. They are widely 

prescribed for the treatment of pain and cough suppression. Hydrocodone/acetaminophen was the most 

frequently dispensed prescription medicine in 2012 in the United States with approximately 135 million 

prescriptions dispensed.

14 If finalized, HCPs will be classified as a schedule II controlled substance, 

affecting all persons who currently handle HCPs. Handlers of HCPs primarily include manufacturers, 

distributors, exporters, pharmacies, practitioners, mid-level practitioners, and hospitals/clinics. It is 

14 IMS Health, National Prescription Audit, Dec. 2012.

8

 
possible that other registrants, such as importers,15 researchers, analytical labs, teaching institutions, etc., 

also handle HCPs. However, based on its understanding of its registrant population, the DEA assumes for 

purposes of this analysis that for all business activities other than manufacturers, distributors, exporters, 

pharmacies, practitioners, mid-level practitioners, and hospitals/clinics, that the volume of HCPs handled 

is nominal, and therefore de minimis to the economic impact determination of the proposed rule.

Because HCPs are so widely prescribed, for the purposes of this analysis, the DEA conservatively 

assumes all distributors, pharmacies, practitioners, mid-level practitioners, and hospitals/clinics currently 

registered with the DEA to handle schedule III controlled substances are also handlers of HCPs. The 

DEA estimated the number of manufacturers (115) and exporters (5) handling HCPs directly from DEA 

records. In total, the DEA estimates that there are 1,478,713 handlers of HCPs.

16 Table 1 provides the 

breakdown of handlers of HCPs by DEA business activity registration.

15 See 21 U.S.C. 952(a) (“It shall be unlawful to import***into the United States***any narcotic drug in schedule 

III***except***such amounts of crude opium, poppy straw, [and] concentrate of poppy straw***as the Attorney General finds to 

be necessary to provide for medical scientific, or other legitimate purposes, and such amounts of***any narcotic drug in schedule 

III***that the Attorney General finds to be necessary to provide for the medical, scientific, or other legitimate needs of the 

United States—(A) during an emergency in which domestic supplies of such substances or drugs are found by the Attorney 

General to be inadequate, (B) In any case in which the Attorney General finds that competition among domestic manufactures of

the controlled substances is inadequate and will not be rendered adequate by the registration of additional manufacturers under 

section 823 [of the CSA], or (C) in any case in which the Attorney General finds that such controlled substance is in limited

quantities exclusively for scientific, analytical or research use***.”). 16 The DEA notes that HCPs have been designated as schedule II controlled substances in New York under State law for 

prescribing purposes only. Although the DEA recognizes that prescribing requirements for HCPs under New York State law 

may be similar to Federal schedule II controlled substance prescribing requirements, all HCP handlers in New York are 

conservatively included in this analysis as being affected.

9

 
Table 1. Number of HCP Handlers by Registered DEA Business Activity

Business Activity # of Registrations

Manufacturer 115

Exporter 5

Distributor 706

Pharmacy 69,588

Practitioner 1,162,906

Mid-level Practitioner* 229,676

Hospital/Clinic 15,717

Total 1,478,713

Source: DEA, Nov. 2013.

* Ambulance services, animal shelters, euthanasia technicians, and medical psychologists are excluded from the count of handlers 

of HCPs for this analysis as, while some States may authorize these entities to handle schedule III controlled substances, it is 

unlikely that these registrants handle HCPs.

3.2.2 Number of Entities and Small Entities Handling HCPs

As previously summarized, and as explained in detail in appendix A, the DEA utilizes an entity-toregistration ratio to extrapolate the number of businesses represented by the number of DEA registrations

where specific data is not readily available. For manufacturers, distributors, importers,17 and exporters, 

the DEA assumes a 1-to-1 entity-to-registration ratio. For pharmacies and “other”18 registrants, where 

businesses are more likely to hold multiple registrations, employ multiple registrants, or engage in 

controlled substance activities at multiple locations, the DEA utilizes the number of businesses reported 

under the potentially impacted NAICS classification codes in the most recent United States Economic 

Census (currently the 2007 Economic Census) to represent the number of businesses represented by DEA 

registrations. Comparing economic census data for the number of employees and annual revenue with 

SBA size standards for each potentially impacted NAICS code, the DEA estimated the percentage of 

businesses (represented by DEA registrations) that are small businesses. Table A1 in appendix A 

17 See note 16. 18 Because practitioners and mid-level practitioners primarily work in various physician and health care specialist offices as well 

as hospitals and clinics, the analysis in appendix A groups practitioners, mid-level practitioners, and hospitals/clinics, as “other.” 

10

 
summarizes the relationship among controlled substance registrations, entities, and small entities. The 

number of DEA registrations changes daily and the number of registrations in table 1 above can vary 

from the number of registrations in table A1 used to determine the entity-to-registration ratio. However, 

the analysis contained in appendix A is updated at least annually and any difference in the number of 

registrations between table 1 above and table A1 has negligible impact on the entity-to-registration ratio.

To estimate the number of entities that would be affected by the proposed action to reschedule HCPs, 

the DEA applied the entity-to-registration ratio for that registration category (other than manufacturers

and exporters). Applying the 1-to-1 entity-to-registration ratio for distributors, the DEA estimates that the 

706 registrations correspond to 706 entities. Applying the 0.74 ratio for pharmacies, the DEA estimates 

that the 69,588 registrations correspond to 51,495 entities. Applying the 0.23 ratio for practitioners, midlevel practitioners, and hospitals/clinics (combined), the DEA estimates that the 1,408,299 (1,162,906

practitioner + 229,676 mid-level practitioner + 15,717 hospital/clinic) registrations correspond to 323,909

entities that employ individuals holding practitioner, mid-level practitioner, or hold hospital/clinic 

registrations. Based on research of DEA records and multiple subscription-based and public data sources, 

the DEA estimates that the 115 manufacturer and 5 exporter registrations correspond to 74 and 5 entities, 

respectively. In total, the DEA estimates that 1,478,713 registrations would be affected by the proposed 

action, corresponding to 376,189 entities affected if HCPs are rescheduled from schedule III to II under 

the CSA. Table 2 contains the analysis, by DEA business activity, of the estimated number of affected 

entities and affected small entities utilizing the applicable entity-registration ratios. 

To determine the number of small manufacturer and exporter entities, the DEA estimated the number 

of employees and annual revenue for each of the 79 (74 manufacturers + 5 exporters) affected entities 

based on research of DEA records and multiple subscription-based and public data sources. Using the 

SBA size standard for NAICS code “325412 – Pharmaceutical Preparation Manufacturing” of 750 

11
employees or less for manufacturers and “Sector 42 – Wholesale Trade”19 of 100 employees or less for 

exporters, the DEA estimates that 50 of the 74 affected manufacturers and 4 of 5 affected exporter are 

small entities. 

For the remaining affected business activities, the DEA used the percentage of businesses below SBA 

size standards, as explained in appendix A, to determine the number of affected businesses below SBA 

size standards (i.e., the number of businesses represented by DEA registrations that are small businesses). 

Applying the percentage (96.7%) of small entities to distributors, the DEA estimates that 683 of the 706 

affected distributors are small entities. Applying the percentages of 98.6% for pharmacies and 97.2% for 

practitioners, mid-level practitioners and hospitals/clinics, the DEA estimates that 50,774 of 51,495 

pharmacies and 314,840 of 323,909 entities that employ practitioners, mid-level practitioners, or hold

hospital/clinic registrations are small entities. In total, the DEA estimates that 366,351 (97.4%) of 

376,189 affected entities are small entities. Table 2 lists the estimated number of affected small entities 

by business activity.

Table 2. Number of Affected Entities and Small Entities

Business Activity # of 

Registrations

Entity-toRegistration 

Ratio

# of 

Entities

% of 

Small

Entities

# of 

Small

Entities

Manufacturer 115 N/A 74 N/A 50

Exporter 5 N/A 5 N/A 4

Distributor 706 1.00 706 96.7 683

Pharmacy 69,588 0.74 51,495 98.6 50,774

Practitioner 1,162,906

Mid 0.23 323,909 97.2 314,840 -level Practitioner 229,676

Hospital/Clinic 15,717

Total 1,478,713 376,189 366,351

19 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.

12

 
3.3 ANNUAL COST OF THE RULE

If this rule is promulgated, all persons who handle (manufacture, distribute, dispense, import, export, 

engage in research, conduct instructional activities, and possess), or propose to handle HCPs, will be 

subject to the CSA’s regulatory controls and administrative, civil, and criminal sanctions applicable to 

schedule II controlled substances.

3.3.1 Costs Associated with Registration Requirements

Of the 1,478,713 registrations currently estimated as authorized to handle schedule III HCPs, 65,330

(4.4%) of them are currently not authorized to handle schedule II controlled substances. If the proposed 

rule were finalized, those 65,330 registrations would need to be modified and be authorized by the DEA 

to handle schedule II controlled substances in order to continue to handle HCPs currently in schedule III. 

Table 3 lists the number of registrations by business activity which are currently not registered to handle 

schedule II controlled substances.

To request a registration modification, registrants would need to log on to the DEA’s registration 

website, select the appropriate radio button (“Registration Changes”) to request a modification to add 

schedule II. Registrants can also request a registration modification by submitting a letter of request to 

the DEA’s Registration Unit in accordance with §1301.51. There is no fee to request a registration 

modification and it requires minimal time at nominal cost. 

Therefore, the DEA estimates costs associated with the request to modify a DEA registration to be 

nominal.

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Table 3. Number of Controlled Substance Registrations Not Currently Registered to Handle Schedule II Controlled 

Substances

Business Activity # of 

Registrations

# Not Registered 

for Schedule II

Manufacturer 115 0

Exporter 5 0

Distributor 706 229

Pharmacy 69,588 344 

Practitioner 1,162,906 14,652 

Mid-level Practitioner 229,676 49,876*

Hospital/Clinic 15,717 229

Total 1,478,713 65,330

* While there are an estimated 49,876 mid-level practitioner handlers of schedule III HCPs, the DEA estimates that 35,080 of 

those registrations are located in States where State law does not authorize the handling of schedule II controlled substances by 

mid-level practitioners. If finalized, various State laws will prevent those 35,080 mid-level practitioners from handling HCPs and 

they will need to refer patients to supervising or collaborating physicians. Practice arrangements between mid-level practitioners 

and supervising physicians can vary greatly and the DEA has no basis for estimating the economic impact of such referrals. 

Additionally, State laws regarding authorization for mid-level practitioners to handle schedule II controlled substances are subject 

to change by State law.

3.3.2 Costs Associated with Storage Requirements

Pursuant to 21 CFR 1301.71(a): “All applicants and registrants shall provide effective controls and 

procedures to guard against theft and diversion of controlled substances.” Storage requirements for 

controlled substances are described in 21 CFR 1301.72 for non-practitioners,

20 and in 21 CFR 1301.75 

for practitioners. The DEA’s estimated costs associated with such physical security requirements are 

outlined in the following subsections. 

Manufacturers/Exporters: 

Many manufacturers and exporters are likely to have sufficient space in their existing vaults to 

accommodate HCPs. However, the DEA understands that some manufacturers and exporters will need to 

build new vaults or expand existing vaults to store HCPs in compliance with schedule II controlled 

substances storage requirements. Due to the uniqueness of each business, the DEA made assumptions 

20 Non-practitioners are all registrants other than practitioners. Examples include manufacturers, distributors,

importers/exporters, and narcotic treatment programs (NTPs).

14

 
based on research and institutional knowledge of its registrant community to quantify the costs associated 

with storage requirements for manufacturers and exporters.

The DEA estimates 120 (115 + 5) manufacturer and exporter registrations would be affected by this 

rescheduling action. While 120 manufacturer and exporter registrations are estimated to correspond to 79

entities, the cost estimate is based on registrations to account for multiple locations. The DEA assumes 

60 of the 120 affected manufacturers and exporters (50%) would not need to increase vault space as a 

result of this rule. The remaining 60 affected manufacturers and exporters are expected to need to 

construct or add vault space as a result of this rule. The DEA assumes that 3 of the 60 (5%) would have a 

need for a large expansion, 6 (10%) would have a need for a medium expansion, and the remaining 51

(85%) would have a need for a small expansion. The DEA estimates: (1) a large expansion as an 

expansion of 15,000 sq. ft. of vault space; (2) a medium expansion as an expansion of 1,500 sq. ft. of 

vault space; and (3) a small expansion as an expansion of 150 sq. ft. of vault space. The DEA recognizes 

that there are large gaps between the small, medium, and large expansions and that the actual expansion 

requirement for an individual registrant may be anywhere between 0 and 15,000 sq. ft., or even greater 

than 15,000 sq. ft. Since the DEA does not collect data regarding storage space specifically dedicated to 

HCPs, the DEA modeled expansion need into these three groups. The DEA is aware that in actuality, 

coincident to this rule, a manufacturer or exporter may choose to expand its vault greater than the 

expansion specifically needed for HCPs. This coincident expansion is outside the scope of the proposed 

action and is not factored into the cost of the proposed rule. The small, medium, and large expansion 

assumptions represent expansion needs for HCPs only.

The DEA estimates total vault construction or expansion project cost to be approximately $110, $120, 

and $130 per sq. ft. for large, medium, and small expansions, respectively. These cost estimates include

planning, labor, and material costs associated with vault construction, including electronics, ventilation, 

and surveillance. Multiplying 15,000 sq. ft. by $110 per sq. ft. for a large expansion, the DEA estimates 

that each large expansion will cost $1,650,000. Multiplying 1,500 sq. ft. by $120 per sq. ft. for a medium 

15
expansion, the DEA estimates that each medium expansion will cost $180,000. Multiplying 150 sq. ft. by 

$130 per sq. ft. for a small expansion, the DEA estimates that each small expansion will cost $19,500. 

To determine the total physical security cost as a result of this rule, the DEA utilized the combined 

costs of large, medium, and small expansions. The DEA anticipates 3 manufactures/exporters would 

need large expansions at $1,650,000 per expansion for a combined $4,950,000. The DEA anticipates 6

manufacturers/exporters would need medium expansions at $180,000 per expansion for a combined 

$1,080,000. The DEA anticipates 51 manufacturers/exporters would need small expansions at $19,500

per expansion for a combined $994,500. 

The total cost of physical security for all manufacturers and exporters combined is $7,024,500. Cost 

of physical security requirements for manufacturers and exporters is summarized in table 4.

Table 4. Cost of Physical Security Requirements for Manufacturers and Exporters

Required Expansion # of 

Manufacturers

and Exporters

Additional space 

requirements

(sq. ft.)

Cost per

sq. ft. 

($)

Unit Cost

($)

Cost

($)

All affected manufacturers and exporters 120

50% of manufacturers and exporters

need more space 60

Large expansion, 5% 3 15,000 110 1,650,000 4,950,000 

Medium expansion, 10% 6 1,500 120 180,000 1,080,000 

Small expansion, 85% 51 150 130 19,500 994,500 

Total 7,024,500 

The DEA annualized costs at a rate of 7% over 20 years for each of the large, medium, and small 

expansions.

21 These costs are calculated to be $155,748, $16,991, and $1,841, respectively. Applying 

these annualized costs to the number of large, medium, and small expansions, the total annualized cost of 

the physical security requirements of this rule for manufacturers and exporters is anticipated to be 

$663,063. Table 5 summarizes the calculation for annualized physical security requirement costs for 

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

OMB Circular A-4, September 17, 2003. See also “Regulatory Impact Analysis: A Primer” and “Regulatory Impact Analysis: 

Frequently Asked 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.

16

 
manufacturers and exporters. Annualized cost at a rate of 3% over 20 years is also provided for 

informational purposes.22 

Table 5. Annualized Cost of Physical Security Requirements for Manufacturers and Exporters

Required Expansion # of 

Manufacturers

and Exporters

Annualized 

Unit Cost 

@3%,

20 years

($)*

Annualized 

Cost 

@3%,

20 years

($)*

Annualized 

Unit Cost 

@7%,

20 years

($)*

Annualized 

Cost 

@7%,

20 years

($)*

All affected manufacturers and exporters 120

50% of manufacturers and exporters

need more space 60

Large expansion, 5% 3 110,906 332,718 155,748 467,245 

Medium expansion, 10% 6 12,099 72,593 16,991 101,944 

Small expansion, 85% 51 1,311 66,846 1,841 93,874 

Total 472,157 663,063 

* Decimals not shown.

Distributors

Similar to manufacturers and exporters, many distributors are likely to have enough space in their 

vaults to accommodate HCPs. However, the DEA understands that some distributors will need to build

new vaults or expand existing vaults to store HCPs. Due to the uniqueness of each business, the DEA 

made assumptions to quantify the costs associated with storage requirements for distributors. 

The DEA used the same expansion parameters for distributors as for manufactures and exporters. 

The DEA estimates: (1) a large expansion as an expansion of 15,000 sq. ft. of vault space; (2) a medium 

expansion as an expansion of 1,500 sq. ft. of vault space; and (3) a small expansion an expansion of 150 

sq. ft. of vault space. Again, the DEA recognizes that there are large gaps between the small, medium, 

and large expansions and that the actual expansion requirement for an individual registrant may be 

anywhere between zero and 15,000 sq. ft., or even greater than 15,000 sq. ft. Since the DEA does not 

collect data regarding storage space specifically dedicated to HCPs, the DEA modeled expansion need 

into these three groups. The DEA is aware that in actuality, coincident to this rule, a distributor may 

22 See Id.

17

 
choose to expand its vault greater than the expansion specifically needed for HCPs. This coincident 

expansion is outside the scope of the proposed action and is not factored into the cost of the proposed 

rule. The small, medium, and large expansion assumptions represent expansion needs for HCPs only.

The same as with manufacturers and exporters, the DEA estimates total vault construction or 

expansion project cost to be approximately $110, $120, and $130 per sq. ft. for large, medium, and small 

expansions, respectively. These cost estimates include planning, labor and material costs associated with 

vault construction, including electronics, ventilation, and surveillance. 

The DEA estimated there to be 706 affected distributors. Since the estimated entity-to-registration

ratio is 1-to1, the 706 affected distributor registrations correspond to 706 entities. The DEA estimates

353 (50%) of the 706 affected distributors would not need to increase vault space as a result of this rule. 

The remaining 353 (50%) affected distributors are estimated to need to construct or add vault space as a 

result of this rule if finalized. Based on knowledge that a small number of large distributors handle the 

bulk of the HCPs, the DEA estimates that 18 (5%) of the 353 will have a need for a large expansion, 35

(10%) will have a need for a medium expansion, and the remaining 300 (85%) will have a need for a 

small expansion. 

To determine the total physical security cost as a result of this rule, the DEA utilized the combined 

costs of large, medium, and small expansions (using the parameters previously discussed). The DEA 

estimates that 18 distributors would need large expansions at $1,650,000 per expansion for a combined 

subtotal of $29,700,000. Thirty-five distributors would need medium expansions at $180,000 per 

expansion for a combined subtotal of $6,300,000. Three hundred distributors would need small 

expansions at $19,500 per expansion for a combined subtotal of $5,850,000. 

The estimated combined cost of physical security for all distributors combined is a total of 

$41,850,000. Table 6 summarizes the calculation.

18
Table 6. Cost of Physical Security Requirement for Distributors 

Required Expansion # of Distributors Additional 

Space 

Requirements 

(sq. ft.) 

Cost per 

sq. ft.

($)

Unit Cost

($)

Cost

($)

All affected distributors 706

50% of distributors need more space 353

Large expansion, 5% 18 15,000 110 1,650,000 29,700,000 

Medium expansion, 10% 35 1,500 120 180,000 6,300,000 

Small expansion, 85% 300 150 130 19,500 5,850,000 

Total 41,850,000 

The annualized costs at 7% interest over 20 years for each of the large, medium, and small expansions 

were calculated to be $155,748, $16,991, and $1,841, respectively. Applying these annualized costs to 

the number of large, medium, and small expansions, the total annualized cost of the physical security 

requirements of this rule to distributors is $3,950,344. Table 7 summarizes the calculation for annualized 

costs. Annualized cost at 3% interest over 20 years is also provided for informational purposes. 

Table 7. Annualized Cost of Physical Security Requirement for Distributors 

Required Expansion # of 

Distributors 

Annualized 

Unit Cost 

@ 3%,

20 years

($)*

Annualized 

Cost @ 3%,

20 years

($)*

Annualize

d Unit 

Cost 

@ 7%,

20 years

($)*

Annualized 

Cost @ 7%,

20 years

($)*

All affected distributors 706

50% of distributors need more space 353

Large expansion, 5% 18 110,906 1,996,307 155,748 2,803,470 

Medium expansion, 10% 35 12,099 423,459 16,991 594,675 

Small expansion, 85% 300 1,311 393,212 1,841 552,199 

Total 2,812,977 3,950,344

* Decimals not shown.

Pharmacies and Hospitals/Clinics

The physical security requirements for schedule II controlled substances are the same as the physical 

security requirements for schedule III controlled substances for pharmacies and institutional practitioners 

19
(i.e., hospitals/clinics),23 pursuant to 21 CFR 1301.75(b). In addition, pharmacies and institutional 

practitioners may disperse both schedule II and III controlled substances throughout their stock of noncontrolled substances in such manner as to obstruct the theft or diversion of the controlled substances. 

Therefore, the DEA estimates the physical security requirements of this proposed rule will impose 

nominal cost to pharmacies and hospitals/clinics.

Practitioners

The physical security requirements for schedule II controlled substances are the same as the physical

security requirements for schedule III controlled substances for practitioners. Therefore, the DEA 

estimates the physical security requirements of this proposed rule will impose nominal cost to 

practitioners.

Mid-level Practitioners

The physical security requirements for schedule II controlled substances are the same as the physical

security requirements for schedule III controlled substances for mid-level practitioners. Therefore, the 

DEA estimates the physical security requirements of this proposed rule will impose nominal cost to midlevel practitioners.

3.3.3 Costs Associated with Labeling and Packaging Requirements

DEA labeling and packaging requirements are the same for schedule II controlled substances as 

schedule III narcotic controlled substances. 21 CFR part 1302. Under the proposed rule, the printed label 

would need to be changed to indicate the HCPs’ status as a schedule II controlled substance. For 

example, the printed label would need to change from “C-III” to “C-II.” The DEA assumes that the 

activity of manufacturers making labeling changes is routine and in their normal course of business. The 

DEA therefore assumes that the cost of making this change is nominal. Correspondingly, the DEA 

23 Institutional practitioner means a hospital or other person (other than an individual) licensed, registered, or otherwise 

permitted, by the United States or the jurisdiction in which it practices, to dispense a controlled substance in the course of 

professional practice, but does not include a pharmacy.

20

 
estimates that the cost of the labeling and packaging requirements of this proposed rule is nominal.

3.3.4 Costs Associated with Quota Requirements

Manufacturers of schedule II controlled substances are required to apply for a procurement quota

using DEA Form 250. If finalized, manufacturers of HCPs would need to apply for a procurement quota 

annually.24 All quota applications currently are received online where much of the information is

automatically generated for each particular registrant. Therefore, the DEA assumes procurement quota 

applications can be completed by manufacturers of HCPs in their normal course of business at nominal 

cost. Additionally, the DEA assumes that manufacturers of HCPs are aware of their quota need for 

hydrocodone; therefore, estimating procurement quota would be in the normal course of business. 

Therefore, the DEA estimates that the cost of the quota requirements of this proposed rule is nominal.

3.3.5 Costs Associated with Recordkeeping and Reporting Requirements

Initial and biennial inventories are required for all schedule II-V controlled substances pursuant to 21 

U.S.C. 827, 958 and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11(c). If this rule is 

promulgated, inventory requirements would not change, except dispensers, researchers, and reverse 

distributors would be required to take an exact inventory of HCPs (at the next biennial inventory), as 

compared to the current ability to estimate schedule III controlled substance inventories in containers that 

hold less than 1,000 tablets or capsules.25 21 CFR 1304.11. Likewise, all DEA registrants would be 

required to maintain records with respect to HCPs, pursuant to 21 U.S.C. 827, 958, and in accordance 

with 21 CFR parts 1304, 1307, and 1312. Manufacturers, distributors, and reverse distributors would 

continue to be required to submit reports to the Automation of Reports and Consolidated Order System 

(ARCOS) pursuant to 21 U.S.C. 827 and in accordance with 21 CFR 1304.33.

In association with HCPs’ status as a schedule III narcotic controlled substance, handlers of HCPs are 

24 Bulk hydrocodone is currently a schedule II controlled substance; thus, bulk hydrocodone manufacturers would not be affected 

by this rule or the manufacturing quota requirements.

25 The DEA notes that many States may require exact counts for schedule III controlled substances.

21

 
already conducting inventories and maintaining records accordingly. Correspondingly, the DEA assumes 

that handlers of HCPs can conduct the initial inventory, maintain inventories and records separately from 

all other records, and preserve the DEA Forms 222 from all other records at nominal cost. 

The DEA estimates that the cost of the records and reports requirements of this proposed rule is 

nominal.

3.3.6 Costs Associated with Ordering Requirements

Either a DEA Form 222 or its electronic equivalent as set forth in subpart C of 21 CFR parts 1305 and 

1311 is required for each distribution of a schedule I or II controlled substance.26 If the proposed rule is 

finalized, all handlers of HCPs will need to use DEA Form 222 to acquire HCPs. This includes 

manufacturers, distributors, exporters, pharmacies, practitioners, mid-level practitioners, and 

hospitals/clinics. The DEA Form 222 is provided by the DEA at no cost to the registrant. DEA Form 

222 can be requested on DEA’s web site or by contacting the local DEA office. The registrant receives 

the maximum number of order form books allowed for the business activity.

As determined based on the figures in table 3, 96% ((1,478,713 - 65,330) / 1,478,713) of handlers of 

HCPs are already registered to handle schedule II controlled substances. The DEA assumes that these 

registrants are already using DEA Form 222 or the electronic equivalent. If this proposed rule is 

finalized, HCPs would represent additional line items on the form. The DEA assumes that handlers of 

HCPs can make additional HCP entries at nominal cost. Handlers of HCPs that are not registered for 

schedule II controlled substances would need to start using DEA Form 222 to order HCPs. The DEA 

assumes that the cost of using the DEA Form 222 is nominal. 

Therefore, the DEA estimates that the cost of the ordering requirements of this proposed rule is 

nominal.

26 Except in certain circumstances described in 21 CFR 1305.02.

22

 
3.3.7 Costs Associated with Prescription Requirements

There are several key differences in prescription requirements between schedule II and III controlled 

substances. Prescriptions for schedule II controlled substances must be issued on paper or electronically, 

whereas, orally issued prescriptions (i.e., call-in prescriptions) or facsimile copies are allowed for 

schedule III controlled substances. Refills for schedule II controlled substances are prohibited, whereas 

refills up to six months are allowed for schedule III controlled substances. A practitioner or mid-level 

practitioner may issue multiple prescriptions authorizing the patient to be dispensed a total of up to a 90-

day supply of a schedule II controlled substances in accordance with 21 CFR 1306.12. Finally, the 

prescribing practitioner or mid-level practitioner must be authorized by the jurisdiction in which they 

practice and registered with the DEA to prescribe schedule II controlled substances.

For practitioners and mid-level practitioners, the DEA assumes that there is nominal time and cost 

differences between issuing written, electronic, facsimile, and oral (call-in) prescriptions. For 

pharmacies, the DEA assumes that there is nominal time and cost differences between filling written, 

electronic, facsimile, and call-in prescriptions.

If the proposed rule is finalized, prescription refills for HCPs will be prohibited. However, as 

discussed, multiple prescriptions may be issued for up to a 90-day supply, and a single prescription may 

provide treatment for any length of time. A prescription for a controlled substance to be effective must be 

issued for a legitimate medical purpose by an individual practitioner acting in the usual course of 

professional practice. 21 CFR 1306.04. Practitioners and mid-level practitioners must determine on their 

own, based on sound medical judgment and in accordance with established medical standards, whether it 

is appropriate to issue multiple prescriptions and how often to see their patients. This rule will not 

require a patient visit each time a prescription is issued for HCPs when it is issued for a legitimate 

medical purpose by an individual practitioner acting in the usual course of professional practice. 

Therefore, the DEA estimates that this rule will not require an increase in the number of patient-doctor 

visits; and therefore, any cost associated with prescription requirements is nominal.

23
Finally, if the proposed rule is finalized, the prescribing practitioner or mid-level practitioner must be 

registered to handle schedule II controlled substances. As described in section 3.3.1, the DEA estimates 

the cost to modify a registration from schedule III to schedule II is nominal. Therefore, the DEA 

estimates that the cost of the prescription requirements of this proposed rule is nominal.

3.3.8 Costs Associated with Disposal Requirements

The disposal of controlled substances by registrants is generally performed by procuring the services 

of a reverse distributor. Distribution of schedule II controlled substances to reverse distributors requires 

the use of DEA Form 222. If the proposed rule is finalized, the transfer of HCPs to reverse distributors 

for disposal will require the use of the DEA Form 222. As discussed in section 3.3.6, the DEA assumes 

that the cost of using the DEA Form 222 is nominal. Therefore, the DEA estimates that the cost of the 

disposal requirements of this proposed rule is nominal.

3.3.9 Cost Summary

In summary, the DEA estimates that any economic impact of this proposed rule would be due to the 

change in physical security requirements from schedule III to schedule II controlled substances for 

manufacturers, distributors, and exporters. As described in section 3.3.2, anticipated expansion of secure 

storage area is estimated to cost $7,024,500 for all affected manufacturers and exporters combined and

$41,850,000 for all affected distributors. 

The total economic impact of this rule is a one-time cost of $48,874,500 ($7,024,500 for affected 

manufacturers and exporters + $41,850,000 for all affected distributors). Adding results from tables 5 

and 7, the annualized cost over 20 years is $4,613,407 ($663,063 annualized cost of physical security 

requirements for manufactures and exports + $3,950,344 annualized cost of physical security 

requirements for distributors) and $3,285,134 ($472,157 + 2,812,944) at 7% interest and 3% interest, 

respectively. Conservatively, using the 7% rate, the DEA estimates the annual economic impact of the 

proposed rule to be $4,613,407.

24
3.4 IMPACT ON SMALL ENTITIES

To comply with the RFA, the DEA conducted a preliminary analysis to determine whether, if 

promulgated, the rule will have a significant economic impact on a substantial number of small entities.

3.4.1 Criteria for “Significant” Economic Impact

When there are no special considerations for “significant economic impact” or criteria prescribed by 

external sources, the DEA uses one of two general criteria, either a revenue-based criterion or a profitbased criterion. Table 8 summarizes the general criteria for “significant” economic impact.

Whereas the revenue-based criteria are widely used, the profit-based criteria can be used for some 

high-profit industries. 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 8. 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

Profit-based <5% of annual profit Not significant economic impact

5% or more of annual profit Significant economic impact

3.4.2 Analysis

Since the DEA does not collect revenue information on its registrants, to estimate the number of 

entities “significantly” impacted by the proposed rule, the DEA relied on publicly available information. 

For manufacturers and exporters, the DEA estimated the annual revenue for each of the 79 affected 

entities, as described in section 3.3.2. To determine the number of manufacturers and exporters with 

economic impact greater than 1% of annual revenue, the DEA compared the revenue level at which 

annualized cost of $1,841, $16,991, or $155,748 would be 1% of annual revenue. The smallest 85% of 

manufacturers and exporters would be significantly impacted if their annual revenue were less than 

25
$184,100, the next group of 10% of manufacturers and exporters if less than $1,699,100, and largest 5% if 

annual revenue were less than $15,574,800. Based on this analysis, the DEA determined that one of the 

affected manufacturers would be significantly affected by this rule.

For distributors, the revenue profile from the 2007 Economic Census for each NAICS code associated 

with the affected entities was used to determine the number of affected businesses with impact greater 

than 1% of annual revenue. Using the revenue profile from the 2007 Economic Census, the DEA 

estimated the percentage of businesses where the cost of the rule is 1% or more than the annual revenue. 

This percentage was then applied to the affected registrants to determine the number of registrants with 

economic impact greater than 1% of annual revenue.

For example, NAICS code “424210–Drugs and druggists' sundries merchant wholesalers” would 

incur an annual cost of $1,841. The revenue level that corresponds to $1,841 as 1% of annual revenue is 

$184,100. Using the revenue profile for NAICS code 424210 from the 2007 Economic Census, the DEA 

determined the number of businesses with annual revenue less than $184,100. Taking into consideration 

that the $1,841 cost applies to the smallest 85% and $16,991 applies to the next 10%, and $155,748

applies to the remaining 5%, the “Revenue where cost is 1%” is adjusted accordingly.

The revenue profile indicates that there are 909 firms in the “424210–Drugs and druggists' sundries 

merchant wholesalers” category with annual revenue less than $250,000. Applying the earlier discussed 

estimate that only 50% of the affected entities would require expansion of storage space, only 455 firms 

with annual revenue less than $250,000 will have a cost impact. Using linear interpolation, 74% 

($184,100/$250,000) of 455 firms, or 335 firms, are estimated to have annual revenue below $184,100. 

Therefore, the cost of the rule will be 1% or more of annual revenue for 335 of 5,430 businesses in the 

“424210–Drugs and druggists' sundries merchant wholesalers” category. Table 9 contains the revenue 

profile for the “424210–Drugs and druggists' sundries merchant wholesalers” category and summary of 

analysis conducted.

This calculation was repeated for all NAICS codes associated with all affected registrations. Two 

thousand eight-seven (7.6%) of all 27,401 firms, self-identified with NAICS codes expected to be used by 

26
the DEA distributor registrants, are estimated to have an impact greater than 1% of annual revenue. 

Appendix B contains the complete revenue profile and analysis for all distributor related NAICS codes. 

Table 10 summarizes the results.

Table 9. Revenue Profile for the “424210–Drugs and druggists' sundries merchant wholesalers” category and Summary 

of Analysis Conducted

2007 

NAICS 

code

2007 NAICS 

code 

description

Revenue size of firms 

operated entire year

# of firms

Adjusted # of firms 

for 50% 

Distributor, 

Importer, Exporter

# of firms adjusted 

for large, medium, 

and small storage 

expansion 

requirement

Revenue where cost 

is 1%

($)

# of Firms with 

Revenue below 1% 

Threshold

424210

Drugs and 

druggists' 

sundries 

merchant 

wholesalers

All firms 6,261 3,131

Firms operated for the entire 

year 5,430 2,715

Firms operated entire year 

with sales/receipts/revenue 

less than $250,000 909 455

 

455 184,100

 

335

Firms operated entire year 

with sales/receipts/revenue of 

$250,000 to $499,999 626 313

 

313 184,100 0

Firms operated entire year 

with sales/receipts/revenue of 

$500,000 to $999,999 744 372

 

372 184,100 0

Firms operated entire year 

with sales/receipts/revenue of 

$1,000,000 to $2,499,999 1,059 530

 

530 184,100 0

Firms operated entire year 

with sales/receipts/revenue of 

$2,500,000 to $4,999,999 651 326

 

326 184,100 0

Firms operated entire year 

with sales/receipts/revenue of 

$5,000,000 to $9,999,999 505 253

 

253 184,100 0

Firms operated entire year 

with sales/receipts/revenue of 

$10,000,000 to $24,999,999

425 213

 

60 184,100 0

 

153 1,699,100 0

Firms operated entire year 

with sales/receipts/revenue of 

$25,000,000 to $49,999,999 193 97

 

97 1,699,100 0

Firms operated entire year 

with sales/receipts/revenue of 

$50,000,000 to $99,999,999

114 57

 

23 1,699,100 0

 

34 15,574,800 0

Firms operated entire year 

with sales/receipts/revenue of 

$100,000,000 or more 204 102

 

102 15,574,800 0

Firms not operated for the 

entire year 831 416

27
Based on the revenue profile analysis discussed above, the DEA estimates that 7.6% of 706, or 54, 

distributors will have impact greater than 1% of revenue. Since 683 of 706 are estimated to be small 

businesses, assuming all 54 are small businesses, 7.9% (54 of 683) of affected small distributors are 

expected to have significant impact. None of the other business activities are estimated to incur costs 

greater than 1% of annual revenue as a result of this proposed rule. Overall, 55 (1 manufacturer and 54

distributors) of 366,351 total affected small entities is 0.015%. 

Table 10. General Criteria for "Significant" Economic Impact

Registrant Categories and NAICS Code Titles NAICS Codes 

Represented 

by DEA 

Registrants

Total # of 

Business by

NAICS 

Code*

# of Firms w/ 

Revenue below 

Threshold

% of 

Business 

Groups 

below 

Threshold

Distributors

Drugs and Druggists’ Sundries Merchant 

Wholesalers 424210 5,430 335

General Line Grocery Merchant Wholesalers 424410 1,842 72

Confectionery Merchant Wholesalers 424450 1,544 106

Other Chemical and Allied Products Merchant 

Wholesalers 424690 5,948 326

Tobacco and Tobacco Product Merchant 

Wholesalers 424940 1,053 21

Other Misc. Nondurable Good Merchant 

Wholesalers 424990 10,043 1,083

Packaging and Labeling Services 561910 1,541 144

Distributors Summary 27,401 2,087 7.6

3.4.3 Criteria for “Substantial” Number

When there are no special considerations for “substantial number” or criteria prescribed by external 

sources, the DEA uses a general criteria based on percentage. Table 11 lists the general criteria for 

“substantial” number.

For the purposes of this analysis, a “substantial number” is defined as greater than 30%.

As estimated above, 55 of 366,351 (0.015%) affected small businesses would experience significant 

economic impact if the proposed rule were finalized, far below the 30% criteria for all registrant 

categories.

28
The DEA estimates that a higher percentage (7.9%) of small businesses in the distributor category 

will experience a significant economic impact than the overall percentage (0.015%) of all small 

businesses affected by the proposed rule. However, the 7.9% is far less than the 30% criteria, and is not a 

substantial number. 

Table 11. General Criteria for "Substantial" Number

Criteria Result

<10% of small businesses Not substantial number

10% to 30% of small businesses Possible substantial number

>30% of small businesses Substantial number

3.5 EXAMINATION OF INDUSTRY SEGMENTS WITH SIGNIFICANT ECONOMIC IMPACTS

No industry segment is estimated to experience significant economic impact. The number of small 

businesses that are estimated to experience significant economic impact is less than the criteria for a 

“substantial number.”

4. ECONOMIC ANALYSIS RESULTS

4.1 EXECUTIVE ORDERS 12866 AND 13563

The estimated annual impact of this rule is $4,613,407; thus, this rule will not have an annual effect 

on the economy of $100 million or more and is therefore not economically significant.

4.2 REGULATORY FLEXIBILITY ACT

In accordance with the RFA, the DEA evaluated the impact of this proposed rule on small entities. 

The DEA estimates that 376,189 entities are affected by this rule, of which 366,351 are small entities. 

Specifically, the DEA examined the registration, storage, inventory and recordkeeping, and disposal 

requirements for the 366,351 small entities estimated to be affected by the proposed rule, 50 

manufacturers, 4 exporters, 683 distributors, 50,774 pharmacies, and 314,840 entities that employ 

29
practitioners, mid-level practitioners, or hold hospital/clinic registrations.

27 Based on the DEA’s 

understanding of its registrants’ operations and facilities and research, the DEA estimates that 50% of 

small manufacturers, distributors, and exporters requiring small expansions will incur an annualized cost 

of $1,841 for small storage expansion. The DEA estimates the cost impacts associated with this proposed 

action on the remaining 50% of manufacturers, distributors, and exporters, as well as on all practitioners, 

mid-level practitioners, and hospitals/clinics will be de minimis. The DEA estimates there will be

significant economic impact on 1 (2%) of 50 small business manufacturers and 54 (7.9%) of 683 of small 

business distributors. None of the 5 exporters, 50,774 pharmacies, or 314,840 practitioners/mid-level 

practitioners/hospitals/clinics are anticipated to be significantly impacted by this rule. Fifty-five of the 

366,351 (0.015%) affected small entities are estimated to experience significant impacted, (i.e., incur 

costs greater than 1% of annual revenue) if the proposed rule were finalized. The percentage of small 

entities with significant economic impact is below the 30% threshold for all registrant business activities. 

The DEA’s assessment of economic impact by size category indicates that the proposed rule will not have 

a significant effect on a substantial number of these small entities.

4.3 UNFUNDED MANDATES REFORM ACT OF 1995

The estimated annual impact of this rule is $4,613,407, thus this action would not result in any 

Federal mandate that may result in “the expenditure by State, local, and tribal governments, in the 

aggregate, or by the private sector, of $100 million or more (adjusted for inflation) in any one year***.” 

4.4 CONGRESSIONAL REVIEW ACT OF 1995

The estimated annual impact of this rule is $4,613,407; thus, the rule will not have an annual effect on 

the economy of $100 million or more.

27 The practitioner and mid-level practitioners primarily work in various physician and health care specialist offices as well as 

hospitals and clinics. The numbers represent the estimated number of businesses for which the registrants work.

30

 
APPENDIX A: REGISTRANT LANDSCAPE

The results of the analysis are summarized in the table below and detailed in the following sections. 

Table A1. DEA registrants who are Small Entities

Registrant Business 

Activity

# of 

Registrations

Est. #. of Entities 

Represented by 

DEA Registrants

Entity-toRegistration

Ratio

# of Entities 

Below SBA 

Size Standards

% Small 

Entities

Manufacturer 544 544 1.00 533 97.9

Distributor/Importer/Exporter 1,481 1,481 1.00 1,433 96.7

Pharmacy 69,404 51,248 0.74 50,517 98.6

Other* 1,414,596 328,286 0.23 319,105 97.2

Total 1,486,025 381,559 371,588 97.4

Note: The number of DEA registrations changes daily and the number of registrations in table 1 in the main body of the 

document can vary from the number of registrations in table A1 used to determine the entity-to-registration ratio. However, the 

analysis contained in appendix A is updated at least annually and any difference in the number of registrations between table 1 

and table A1 has nominal impact on the entity-to-registration ratio.

* Because individual practitioners and mid-level practitioners primarily work in various physician and health care specialist 

offices as well as hospitals and clinics, this analysis groups individual practitioners, mid-level practitioners, and hospitals/clinics, 

as “other.” 

DEA Registrant Population by Business Activity

As of June 2013, the date of the current update of the entity-to-registration ratio, there were 1,486,025 

controlled substances registrants as shown in table A2.

Table A2. Number of Registrants by Business Activity

Registrant Business Activity Controlled Substances

Pharmacy 69,404

Hospital/Clinic 15,899

Practitioner 1,156,879

Teaching Institution 318

Mid-Level Practitioner 22,826

Researcher/Canine Handler 9,739

Analytical Lab 1,518

Narcotic Treatment Program 1,317

Distributor 954

Reverse Distributor 60

Importer 223

Exporter 244

Manufacturer 544

Total 1,486,025

Source: DEA, June 2013.

Note: The number of DEA registrations fluctuates daily and the number of DEA registrations at the time of the analysis can vary 

slightly from the number of DEA registrations contained in this table. However, the base analysis contained in this section is 

updated at least annually and any difference in the number of DEA registrations between the time of the analysis and the number 

of DEA registrations contained in this table has minimal impact on the overall results.

31
Corresponding Number of Businesses

Most DEA registrants are small entities or employed by small entities as defined by the RFA. The 

RFA defines a “small entity” as a “small business” (5 U.S.C. 601(3)), a “small organization” (5 U.S.C. 

601(4)), or a “small governmental jurisdiction” (5 U.S.C. 601(5)). Pursuant to the RFA, the term “small 

business” has the same meaning as the term “small business concern” under section 3 of the Small 

Business Act (SBA). The SBA designates a “small-business concern,” as one which is independently 

owned and operated and is not dominant in its field of operation. 15 U.S.C. 632(a)(1). Furthermore, the 

SBA defines whether a business entity is small by size standards. These size standards have been 

established based on the types of economic activity or industry under NAICS. The SBA sets the 

maximum size standards—in millions of dollars or number of employees—allowed for concerns and their 

affiliates to be designated small.

The RFA requirements and SBA size standards apply to entities and businesses. Because the DEA 

does not, in the general course of business, collect information regarding associated or parent 

organizations holding multiple registrations, the DEA has associated the number of registrants to a 

corresponding number of businesses. The DEA registrations are held by businesses such as 

manufacturers, distributors, and pharmacies as well as individuals such as practitioners and mid-level 

practitioners. Additionally, many businesses hold more than one registration in situations where a single 

business has more than one location or more than one business activity. Therefore, the DEA related the

approximately 1.5 million DEA registrations to the number of businesses, as described below. First, since 

the SBA size standards are organized by NAICS codes, the approximately 1.5 million affected 

registrations are organized by NAICS codes. Because the DEA does not collect NAICS code information 

from its registrants, the DEA reviewed all NAICS codes28 and developed a table that relates various 

registrant groups to NAICS codes. Table A3 lists the DEA registrant categories with NAICS titles and 

28 www.census.gov/eos/www/naics/.

32

 
codes. Second, using 2007 Economic Census data, the DEA determined the number of businesses for 

each NAICS code. See table A4.

33
Table A3. DEA Registrant Categories and Corresponding Estimated NAICS Codes

Registrant Categories and NAICS Code Titles

Titles

# of DEA 

Registrations

NAICS Codes Represented 

by DEA Registrations

Manufacturers

544

Petrochemical Manufacturing 325110

Medicinal and Botanical Manufacturing 325411

Pharmaceutical Preparation Manufacturing 325412

Adhesive Manufacturing 325520

Toilet Preparation Manufacturing 325620

All Other Msc. Chemical Product and Preparation 

Manufacturing 325998

Distributors/Importers/Exporters

1,481

424210

Drugs and Druggists’ Sundries Merchant Wholesalers 424410

General Line Grocery Merchant Wholesalers 424450

Confectionary Merchant Wholesalers 424690

Tobacco and Tobacco Product Merchant Wholesalers 424940

Other Msc. Nondurable Goods Merchant Wholesalers 424990

Packaging and Labeling Services 651910

Pharmacies

69,404

Supermarkets and Other Grocery (except Convenience) 

Stores 445110

Pharmacies and Drug Stores 446110

Discount Department Stores 452112

Warehouse Clubs and Superstores 452910

Others

1,414,596

Colleges, Universities and Professional Schools 611310

Offices of Physicians (except Mental Health Specialists) 621111

Offices of Physicians, Mental Health Specialists 621112

Offices of Dentists 621210

Offices of Optometrists 621320

Offices of Podiatrists 621391

Offices of All Other Msc. Health Practitioners 621399

Outpatient Mental Health and Substance Abuse Centers 621420

HMO Medical Centers 621491

General Medical and Surgical Hsps. 622110

Psychiatric and Substance Abuse Hsps. 622210

Specialty (except Psychiatric and Substance Abuse) Hsps. 622310

Testing Laboratories 541380

Total Controlled Substance Registrants 1,486,025

34
Table A4. Number of Businesses by NAICS Codes

Source: 2007 Economic Census, www.census.gov/econ/census07.

* Manufacturer data is in number of establishments while all other sectors are in number of firms. A firm may have 

more than one establishment. Based on sectors with both firm and establishment data, the number of establishments 

are similar to the number of firms. The term “firm” used in the source data is used synonymously with “business” for 

the purposes of this analysis.

Registrant Categories and NAICS Code 

Titles

Number of 

DEA 

Registrations

NAICS Codes 

Represented 

by DEA 

Registrants

Total 

Number of 

Businesses 

by NAICS 

Code* 

Manufacturers 544 

Petrochemical Manufacturing 325110 56

Medicinal and Botanical Manufacturing 325411 410

Pharmaceutical Preparation Manufacturing 325412 991

Adhesive Manufacturing 325520 600

Toilet Preparation Manufacturing 325620 854

All Other Miscellaneous Chemical Product 

and Preparation Manufacturing 325998 1,261

Manufacturer Summary 4,172

Distributors/Importers/Exporters 1,481 

Drugs and Druggists’ Sundries Merchant 

Wholesalers 424210 5,430

General Line Grocery Merchant 

Wholesalers

424410 1,842

Confectionery Merchant Wholesalers 424450 1,544

Other Chemical and Allied Products 

Merchant Wholesalers 424690 5,948

Tobacco and Tobacco Product Merchant 

Wholesalers 424940 1,053

Other Miscellaneous Nondurable Goods 

Merchant Wholesalers 424990 10,043

Packaging and Labeling Services 561910 1,541

Distributors/Importers/Exporters 

Summary 27,401

Pharmacies 69,404

Supermarkets and Other Grocery (except 

Convenience) Stores 445110 34,009

Pharmacies and Drug Stores 446110 17,217

Discount Department Stores 452112 11

Warehouse Clubs and Superstores 452910 11

Pharmacies Summary 51,248

Others 1,414,596 

Colleges, Universities and Professional 

Schools 611310 2,149

Offices of Physicians (except Mental Health 

Specialists) 621111 160,034

Offices of Physicians, Mental Health 

Specialists

621112 9,075

Offices of Dentists 621210 111,013

Offices of Optometrists 621320 16,659

Offices of Podiatrists 621391 7,566

Offices of All Other Miscellaneous Health 

Practitioners

621399 9,094

Outpatient Mental Health and Substance 

Abuse Centers

621420 4,113

HMO Medical Centers 621491 30

General Medical and Surgical Hospitals 622110 3,051

Psychiatric and Substance Abuse Hospitals 622210 423

Specialty (except Psychiatric and Substance 

Abuse) Hospitals 622310 352

Testing Laboratories 541380 4,727

Others Summary 328,286

Total Controlled Substance Registrants 1,486,025 

Category 1 Category 2

35
There are many more businesses under the manufacturers and distributors/importers/exporters NAICS 

codes than the number of DEA registrations that fall within these NAICS codes. There are 544 and 1,481 

manufacturer and distributor/importer/exporter registrants, respectively, while the numbers of businesses 

for these NAICS codes are 4,172 and 27,401, respectively. Meanwhile, the number of businesses under

pharmacies and other (remaining) NAICS codes are far fewer than the number of DEA registrants that fall 

within these business activities. There are 69,404 and 1,414,596 pharmacies and other registrants, 

respectively, while the numbers of establishments for the corresponding NAICS codes are only 51,248 

and 328,286, respectively. Therefore, the DEA broadly classified registrants in two categories: 

• Category 1: Registrants in industries where very few businesses in the industry are 

registrants; and

• Category 2: Registrants in industries where most businesses in the industry are registrants. 

As shown in table A4, only a small fraction of manufacturers, distributors, and importers/exporters 

are DEA registrants—2,025 (544 + 1,481) of 31,573 (4,172 + 27,401), while nearly all pharmacies, 

hospitals/clinics, offices of physicians, etc., are registrants, employ registrants, or may represent multiple 

registrations, such as several practitioners and/or mid-level practitioners working in the same office or 

hospital. Therefore, while recognizing that DEA registrants with manufacturer, distributor, or 

importer/exporter registrations can also have more than one registration, the DEA estimates a 1-to-1 ratio 

and that 544 manufacturer and 1,481 distributor, importer/exporter registrations roughly equate to 544 

and 1,481 businesses, respectively, for registrants in category 1. 

For registrants in category 2 (pharmacies, hospitals/clinics, offices of physicians, etc.), nearly all 

businesses counted by the NAICS codes are expected to be or to hire DEA registrants. Therefore, the 

number of businesses in these NAICS codes is used as an estimate for the number of businesses that are 

in the pharmacies and other registrant categories. The DEA estimates that 69,404 pharmacy registrations 

roughly equate to 51,248 businesses resulting in a 0.74-to-1 business-to-registration ratio, and 1,414,596 

remaining other registrations roughly equate to 328,286 businesses resulting in a 0.23-to-1 business-toregistration ratio. In total, the DEA estimates that the nearly 1.5 million DEA registrants represent 

36
approximately 381,559 businesses. See table A5. The DEA recognizes that this estimate is not precise, 

but instead provides understanding of orders of magnitude.

Number of Affected Businesses that Are Small Businesses

After estimating that approximately 1.5 million DEA registrants represent 381,559 businesses, the 

DEA then determined how many of the estimated 381,559 businesses represented by DEA registrants are 

small businesses based on the SBA size standards. Because the DEA does not collect data on company 

size of its registrants, it used 2007 Economic Census data to make this determination. The Economic 

Census provides the number of businesses by annual revenue ranges as well as the number of businesses 

by number of employee ranges by NAICS codes. This data was compared to the SBA size standards for 

each NAICS code to determine the number of businesses that are small businesses for each NAICS code. 

See table A6. 

The DEA determined that 97.9% of manufacturers and 96.7% of distributors/importers/exporters 

by NAICSs are small businesses. These percentages were applied to the total affected businesses (544 

manufacturers and 1,481 distributors), resulting in number of businesses (533 manufacturers and 1,433 

distributors) estimated to be small businesses. The estimate for category 2 registrants/businesses that are

small businesses is derived directly from the 2007 Economic Census. 98.6% (50,517 of 51,248) of 

pharmacies and 97.2% (319,105 of 328,286) of other businesses are estimated to be small businesses. 

Combining the results of manufacturers, distributors/importers/exporters, pharmacies, and other, the DEA 

estimates 371,588 of the 381,559 (97.4%) businesses that represent the registrant population are 

considered “small entities” in accordance with the RFA and SBA standards, 5 U.S.C. 601(6) and 15 

U.S.C. 632. Again, the DEA recognizes that its estimate is not precise, but instead provides 

understanding of orders of magnitude, so that the DEA can assess whether or not the number of 

significantly impacted businesses constitute a substantial number of small businesses.

37
Table A5: Number of Businesses Represented by DEA Controlled Substances Registrants

Registrant Categories and NAICS Code 

Titles

Number of 

DEA 

Registrations

NAICS 

Codes 

Represented 

by DEA 

Registrants

Total 

Number of 

Businesses 

by NAICS 

Code* 

Estimated 

Number of 

Businesses 

Represented 

by DEA 

Registrants

Manufacturers 544 544

Petrochemical Manufacturing 325110 56

Medicinal and Botanical Manufacturing 325411 410

Pharmaceutical Preparation Manufacturing 325412 991

Adhesive Manufacturing 325520 600

Toilet Preparation Manufacturing 325620 854

All Other Miscellaneous Chemical Product and 

Preparation Manufacturing 325998 1,261

Manufacturers Summary 4,172

Distributors/Importers/Exporters 1,481 1,481

Drugs and Druggists’ Sundries Merchant 

Wholesalers 424210 5,430

General Line Grocery Merchant Wholesalers 424410 1,842

Confectionery Merchant Wholesalers 424450 1,544

Other Chemical and Allied Products Merchant 

Wholesalers 424690 5,948

Tobacco and Tobacco Product Merchant 

Wholesalers 424940 1,053

Other Miscellaneous Nondurable Goods 

Merchant Wholesalers 424990 10,043

Packaging and Labeling Services 561910 1,541

Distributors/Importers/Exporters Summary 27,401

Pharmacies 69,404 51,248

Supermarkets and Other Grocery (except 

Convenience) Stores 445110 34,009

Pharmacies and Drug Stores 446110 17,217

Discount Department Stores 452112 11

Warehouse Clubs and Superstores 452910 11

Pharmacies Summary 51,248

Others 1,414,596 328,286

Colleges, Universities and Professional Schools 611310 2,149

Offices of Physicians (except Mental Health 

Specialists) 621111 160,034

Offices of Physicians, Mental Health Specialists 621112 9,075

Offices of Dentists 621210 111,013

Offices of Optometrists 621320 16,659

Offices of Podiatrists 621391 7,566

Offices of All Other Miscellaneous Health 

Practitioners 621399 9,094

Outpatient Mental Health and Substance Abuse 

Centers 621420 4,113

HMO Medical Centers 621491 30

General Medical and Surgical Hospitals 622110 3,051

Psychiatric and Substance Abuse Hospitals 622210 423

Specialty (except Psychiatric and Substance 

Abuse) Hospitals 622310 352

Testing Laboratories 541380 4,727

Others Summary 328,286

Total Controlled Substance Registrants 1,486,025 381,559 

Category 1 Category 2

38
Table A6. Number of Affected Businesses that Are Small Businesses

Source: 2007 Economic Census, www.census.gov/econ/census07; and 13 CFR 121.201.

* Manufacturer data is in number of establishments while all other sectors are in number of firms. A firm may have more than 

one establishment. The term “firm” used in the source data is used synonymously with “business” for the purposes of this 

analysis. 

**SBA size standards for manufacturers and distributors/reverse distributors are by number of employees, while size standards

for pharmacies and others (practitioners/hospitals/clinics) are by dollar amount of annual revenue.

*** Number of establishments/firms data by number of employees/annual revenue is available in specific increments. When the 

SBA size standard/threshold is between increments, half of the number in the increment was used to estimate the number below 

the threshold. For example, the number of offices of dentists was available for various increments; $4,999,999 and below is 

110,410 and increment $5,000,000-$9,999,999 is 448. Because the size standard is $7M, half of 448 (224) was estimated for 

$5,000,000-$7,000,000 resulting in a total of 110,634.

Registrant Categories and NAICS Code 

Titles

Number of 

DEA 

Registrations

NAICS 

Codes 

Represented 

by DEA 

Registrants

Total 

Number of 

Businesses 

by NAICS 

Code* 

Estimated 

Number of 

Businesses 

Represented 

by DEA 

Registrants

SBA Size 

Standards: 

Number of 

Employees or 

Millions of 

Dollars**

Number of 

Businesses 

Below SBA 

Size 

Standard

% of 

Businesses 

Below SBA 

Size 

Standard Note

Manufacturers 544 544 533

Petrochemical Manufacturing 325110 56 1,000 56

Medicinal and Botanical Manufacturing 325411 410 750 406 ***

Pharmaceutical Preparation Manufacturing 325412 991 750 943 ***

Adhesive Manufacturing 325520 600 500 600

Toilet Preparation Manufacturing 325620 854 500 828

All Other Miscellaneous Chemical Product and 

Preparation Manufacturing 325998 1,261 500 1,253

Manufacturers Summary 4,172 4,086 97.9%

Distributors/Importers/Exporters 1,481 1,481 1,433

Drugs and Druggists’ Sundries Merchant 

Wholesalers 424210 5,430 100 5,155

General Line Grocery Merchant Wholesalers 424410 1,842 100 1,739

Confectionery Merchant Wholesalers 424450 1,544 100 1,506

Other Chemical and Allied Products Merchant 

Wholesalers 424690 5,948 100 5,824

Tobacco and Tobacco Product Merchant 

Wholesalers 424940 1,053 100 978

Other Miscellaneous Nondurable Goods 

Merchant Wholesalers 424990 10,043 100 9,926

Packaging and Labeling Services 561910 1,541 $7.0 1,381 ***

Distributors/Importers/Exporters Summary 27,401 26,509 96.7%

Pharmacies 69,404 51,248 50,517

Supermarkets and Other Grocery (except 

Convenience) Stores 445110 34,009 $30.0 33,444 ***

Pharmacies and Drug Stores 446110 17,217 $25.5 17,069 ***

Discount Department Stores 452112 11 $27.0 3 ***

Warehouse Clubs and Superstores 452910 11 $27.0 1 ***

Pharmacies Summary 51,248 50,517 98.6%

Others 1,414,596 328,286 319,105

Colleges, Universities and Professional Schools 611310 2,149 $7.0 

 Not 

Available 

Offices of Physicians (except Mental Health 

Specialists) 621111 160,034 $10.0 155,908

Offices of Physicians, Mental Health Specialists 621112 9,075 $10.0 9,056

Offices of Dentists 621210 111,013 $7.0 110,634 ***

Offices of Optometrists 621320 16,659 $7.0 16,611 ***

Offices of Podiatrists 621391 7,566 $7.0 7,556 ***

Offices of All Other Miscellaneous Health 

Practitioners 621399 9,094 $7.0 9,070 ***

Outpatient Mental Health and Substance Abuse 

Centers 621420 4,113 $10.0 3,826

HMO Medical Centers 621491 30 $10.0 17

General Medical and Surgical Hospitals 622110 3,051 $34.5 1,285 ***

Psychiatric and Substance Abuse Hospitals 622210 423 $34.5 334 ***

Specialty (except Psychiatric and Substance 

Abuse) Hospitals 622310 352 $34.5 200 ***

Testing Laboratories 541380 4,727 $12.0 4,608 ***

Others Summary 328,286 319,105 97.2%

Total Controlled Substance Registrants 1,486,025 381,559 371,588

Category 1 Category 2

39
APPENDIX B: BUSINESSES WITH IMPACT 1% OR MORE OF ANNUAL REVENUE

Table B contains the complete revenue profile for distributors as well as the summary of analysis 

conducted.

Table B. Complete Revenue Profile for Distributors Based On 2007 NAICS Codes and Summary of Analysis Conducted

NAICS 

code

NAICS 

code description

Revenue size of firms operated 

entire year

# of firms

Adjusted # of firms 

for 50% 

Distributor, 

Importer, Exporter

# of firms adj. for 

large, medium, and 

small storage 

expansion 

requirement

Revenue where cost 

is 1% ($)

Number of Firms 

with Revenue below 

1% Threshold

424210

Drugs and 

druggists' sundries 

merchant 

wholesalers

All firms 6,261 3,131

Firms operated for the entire year 5,430 2,715

Firms operated entire year with 

sales/receipts/revenue less than 

$250,000 909 455 455 

 

184,100 

 

335 

Firms operated entire year with 

sales/receipts/revenue of 

$250,000 to $499,999 626 313 313 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$500,000 to $999,999 744 372 372 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$1,000,000 to $2,499,999 1,059 530 530 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$2,500,000 to $4,999,999 651 326 326 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$5,000,000 to $9,999,999 505 253 253 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$10,000,000 to $24,999,999

425 213 60 

 

184,100 0

 153 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$25,000,000 to $49,999,999 193 97 97 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$50,000,000 to $99,999,999

114 57 23 

 

1,699,100 0

 34 

 

15,574,800 0

Firms operated entire year with 

sales/receipts/revenue of 

$100,000,000 or more 204 102 102 

 

15,574,800 0

Firms not operated for the entire 

year 831 416

424410

General line 

grocery merchant 

wholesalers

All firms 2,208 1,104

Firms operated for the entire year 1,842 921

Firms operated entire year with 

sales/receipts/revenue less than 

$250,000 195 98 98 

 

184,100 

 

72 

Firms operated entire year with 

sales/receipts/revenue of 

$250,000 to $499,999 187 94 94 

 

184,100 0

40
NAICS 

code

NAICS 

code description

Revenue size of firms operated 

entire year

# of firms

Adjusted # of firms 

for 50% 

Distributor, 

Importer, Exporter

# of firms adj. for 

large, medium, and 

small storage 

expansion 

requirement

Revenue where cost 

is 1% ($)

Number of Firms 

with Revenue below 

1% Threshold

Firms operated entire year with 

sales/receipts/revenue of 

$500,000 to $999,999 243 122 122 

 

184,100 0

424410

(cont.)

General line grocery 

merchant wholesalers

(cont.)

Firms operated entire year with 

sales/receipts/revenue of 

$1,000,000 to $2,499,999 365 183 183 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$2,500,000 to $4,999,999 273 137 137 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$5,000,000 to $9,999,999 188 94 94 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$10,000,000 to $24,999,999

193 97 58 

 

184,100 0

 39 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$25,000,000 to $49,999,999 75 38 38 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$50,000,000 to $99,999,999

42 21 16 

 

1,699,100 0

 6 

 

15,574,800 0

Firms operated entire year with 

sales/receipts/revenue of 

$100,000,000 or more 81 41 41 

 

15,574,800 0

Firms not operated for the entire 

year 366 183

424450 Confectionery 

merchant wholesalers

All firms 1,798 899

Firms operated for the entire year 1,544 772

Firms operated entire year with 

sales/receipts/revenue less than 

$250,000 287 144 144 

 

184,100 

 

106 

Firms operated entire year with 

sales/receipts/revenue of 

$250,000 to $499,999 238 119 119 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$500,000 to $999,999 238 119 119 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$1,000,000 to $2,499,999 291 146 146 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$2,500,000 to $4,999,999 163 82 82 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$5,000,000 to $9,999,999

132 66 48 

 

184,100 0

 19 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$10,000,000 to $24,999,999 91 46 46 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$25,000,000 to $49,999,999

46 23 13 

 

1,699,100 0

 10 

 

15,574,800 0

41
NAICS 

code

NAICS 

code description

Revenue size of firms operated 

entire year

# of firms

Adjusted # of firms 

for 50% 

Distributor, 

Importer, Exporter

# of firms adj. for 

large, medium, and 

small storage 

expansion 

requirement

Revenue where cost 

is 1% ($)

Number of Firms 

with Revenue below 

1% Threshold

Firms operated entire year with 

sales/receipts/revenue of 

$50,000,000 to $99,999,999 28 14 14 

 

15,574,800 0

Firms operated entire year with 

sales/receipts/revenue of 

$100,000,000 or more 30 15 15 

 

15,574,800 0

Firms not operated for the entire 

year 254 127

424690

Other chemical and 

allied products 

merchant wholesalers

All firms 6,527 3,264

Firms operated for the entire year 5,948 2,974

Firms operated entire year with 

sales/receipts/revenue less than 

$250,000 886 443 443 

 

184,100 

 

326 

424690

(cont.)

Other chemical and 

allied products 

merchant wholesalers

Firms operated entire year with 

sales/receipts/revenue of 

$250,000 to $499,999 706 353 353 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$500,000 to $999,999 894 447 447 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$1,000,000 to $2,499,999 1,164 582 582 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$2,500,000 to $4,999,999 771 386 386 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$5,000,000 to $9,999,999 562 281 281 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$10,000,000 to $24,999,999

494 247 37 

 

184,100 0

 211 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$25,000,000 to $49,999,999

220 110 87 

 

1,699,100 0

 24 

 

15,574,800 0

Firms operated entire year with 

sales/receipts/revenue of 

$50,000,000 to $99,999,999 101 51 51 

 

15,574,800 0

Firms operated entire year with 

sales/receipts/revenue of 

$100,000,000 or more 150 75 75 

 

15,574,800 0

Firms not operated for the entire 

year 579 290

424940

Tobacco and tobacco 

product merchant 

wholesalers

All firms 1,135 568

Firms operated for the entire year 1,053 527

Firms operated entire year with 

sales/receipts/revenue less than 

$250,000 56 28 28 

 

184,100 21 

Firms operated entire year with 

sales/receipts/revenue of 

$250,000 to $499,999 55 28 28 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$500,000 to $999,999 74 37 37 

 

184,100 0

42
NAICS 

code

NAICS 

code description

Revenue size of firms operated 

entire year

# of firms

Adjusted # of firms 

for 50% 

Distributor, 

Importer, Exporter

# of firms adj. for 

large, medium, and 

small storage 

expansion 

requirement

Revenue where cost 

is 1% ($)

Number of Firms 

with Revenue below 

1% Threshold

Firms operated entire year with 

sales/receipts/revenue of 

$1,000,000 to $2,499,999 139 70 70 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$2,500,000 to $4,999,999 118 59 59 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$5,000,000 to $9,999,999 159 80 80 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$10,000,000 to $24,999,999 181 91 91 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$25,000,000 to $49,999,999 99 50 50 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$50,000,000 to $99,999,999

81 41 7 

 

184,100 0

 34 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$100,000,000 or more

91 46 20 

 

1,699,100 0

 26 

 

15,574,800 0

Firms not operated for the entire 

year 82 41

424990

Other miscellaneous 

nondurable goods 

merchant wholesalers

All firms 12,118 6,059

Firms operated for the entire year 10,043 5,022

Firms operated entire year with 

sales/receipts/revenue less than 

$250,000 2,941 1,471 1,471 

 

184,100 

 

1,083 

Firms operated entire year with 

sales/receipts/revenue of 

$250,000 to $499,999 1,807 904 904 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$500,000 to $999,999 1,736 868 868 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$1,000,000 to $2,499,999 1,732 866 866 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$2,500,000 to $4,999,999

827 414 161 

 

184,100 0

 253 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$5,000,000 to $9,999,999 447 224 224 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$10,000,000 to $24,999,999

348 174 26 

 

1,699,100 0

 149 

 

15,574,800 0

Firms operated entire year with 

sales/receipts/revenue of 

$25,000,000 to $49,999,999 112 56 56 

 

15,574,800 0

Firms operated entire year with 

sales/receipts/revenue of 

$50,000,000 to $99,999,999 54 27 27 

 

15,574,800 0

43
NAICS 

code

NAICS 

code description

Revenue size of firms operated 

entire year

# of firms

Adjusted # of firms 

for 50% 

Distributor, 

Importer, Exporter

# of firms adj. for 

large, medium, and 

small storage 

expansion 

requirement

Revenue where cost 

is 1% ($)

Number of Firms 

with Revenue below 

1% Threshold

Firms operated entire year with 

sales/receipts/revenue of 

$100,000,000 or more 39 20 20 

 

15,574,800 0

Firms not operated for the entire 

year 2,075 1,038

561910 Packaging and 

labeling services

All firms 1,809

 

905 

Firms operated for the entire year 1,541

 

771 

Firms operated entire year with 

sales/receipts/revenue less than 

$100,000 164

 

82 82 

 

184,100 

 

82 

Firms operated entire year with 

sales/receipts/revenue of 

$100,000 to $249,999 221

 

111 111 

 

184,100 62

Firms operated entire year with 

sales/receipts/revenue of 

$250,000 to $499,999 278

 

139 139 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$500,000 to $999,999 247

 

124 124 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$1,000,000 to $2,499,999 257

 

129 129 

 

184,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$2,500,000 to $4,999,999

161 

81 

 71 

 

184,100 0

 10 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$5,000,000 to $9,999,999 105

 

53 53 

 

1,699,100 0

Firms operated entire year with 

sales/receipts/revenue of 

$10,000,000 to $24,999,999

74 

37 

 15 

 

15,574,800 0

 22 

 

15,574,800 0

Firms operated entire year with 

sales/receipts/revenue of 

$25,000,000 to $49,999,999 25

 

13 13 

 

15,574,800 0

Firms operated entire year with 

sales/receipts/revenue of 

$50,000,000 to $99,999,999 6

 

3 3 

 

15,574,800 0

Firms operated entire year with 

sales/receipts/revenue of 

$100,000,000 or more 3

 

2 2 

 

1,699,100 0

Firms not operated for the entire 

year 268

 

134 

Total with impact greater than 1% of revenue 2,087

44