32784 Federal Register / Vol. 83, No. 136 / Monday, July 16, 2018 / Rules and Regulations 

[FR Doc. 2018–14378 Filed 7–13–18; 8:45 am] 

BILLING CODE 6750–01–C 

DEPARTMENT OF JUSTICE 

Drug Enforcement Administration 

21 CFR Part 1303 

[Docket No. DEA–480] 

RIN 1117–AB48 

Controlled Substances Quotas 

AGENCY: Drug Enforcement 

Administration, Department of Justice. 

ACTION: Final rule. 

SUMMARY: The Drug Enforcement 

Administration (DEA) is publishing this 

final rule to strengthen the process for 

setting controls over diversion of 

controlled substances and make other 

improvements in the quota management 

regulatory system for the production, 

manufacturing, and procurement of 

controlled substances. 

DATES: This final rule is effective August 

15, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Michael J. Lewis, Diversion Control 

Division, Drug Enforcement 

Administration; Mailing Address: 8701 

Morrissette Drive, Springfield, Virginia 

22152; Telephone: (202) 598–8953. 

SUPPLEMENTARY INFORMATION: 

Legal Authority 

Provisions of the Controlled 

Substances Act, 21 U.S.C. 801 et seq., 

authorize the Attorney General to issue 

rules and regulations relating to 

registration and control of the 

manufacture, distribution, and 

dispensing of controlled substances and 

listed chemicals. 21 U.S.C. 821. 

Pursuant to this authority, the Attorney 

General, through the Drug Enforcement 

Administration (DEA), has issued and 

administers regulations setting aggregate 

production quotas for each basic class of 

controlled substances in schedules I and 

II, manufacturing quotas for individual 

manufacturers, and procurement quotas 

for manufacturers to produce other 

controlled substances or to convert the 

substances into dosage form. See 21 CFR 

part 1303. 

The current regulations, issued 

initially in 1971, need to be updated to 

reflect changes in the manufacture of 

controlled substances, changing patterns 

of substance abuse and markets in illicit 

drugs, and the challenges presented by 

the current national crisis of controlled 

substance abuse. This final rule 

modifies the regulations to strengthen 

controls over diversion—that is, the 

redirection of controlled substances 

which may have lawful uses into illicit 

channels—and makes other 

improvements in the controlled 

substance regulatory quota system. 

The quota process, in general terms, is 

a critical element of the Controlled 

Substances Act’s regulatory system that 

seeks to prevent or limit diversion by 

preventing the accumulation of 

controlled substances in amounts 

exceeding legitimate need. The 

measures the final rule adopts to 

strengthen the system include 

authorizing the requisition from quota 

applicants of additional information 

helpful in detecting and preventing 

diversion, and ensuring that DEA’s 

determinations regarding the 

appropriate quotas are adequately 

informed by input from other federal 

agencies, from the states, and from 

quota applicants. 

Section-by-Section Analysis 

The DEA is finalizing the rule as 

proposed without changes. Below are 

summaries of provisions contained in 

the final rule. 

Section 1303.11—Aggregate Production 

Quotas 

Section 1303.11 currently directs the 

Administrator of DEA to determine the 

total quantity of each basic class of 

controlled substance listed in schedule 

I or II needed in the calendar year for 

the medical, scientific, research, and 

industrial needs of the United States, for 

lawful export requirements, and for the 

establishment and maintenance of 

reserve stocks. Section 1303.11(b)(1) 

through (4) identifies a number of 

factors that are categorically to be 

considered in determining aggregate 

production quotas—relating to total net 

disposal, net disposal trends, 

inventories and inventory trends, and 

demand—followed by a final catchall 

factor, (5), regarding factors to be 

considered as the Administrator finds 

relevant. 

The final rule makes two additions to 

the list of factors that must regularly be 

considered in setting the aggregate 

production quotas because of their 

importance. First, it adds to the list the 

extent of any diversion of the controlled 

substance in the class, which will 

ensure that the allowed aggregate 

production quota is limited to that 

needed to provide adequate supplies for 

the United States’ legitimate needs. 

Second, the final rule amends the list of 

factors to be considered in establishing 

these quotas to include relevant 

information from the Department of 

Health and Human Services (HHS) and 

its components, including the Food and 

Drug Administration (FDA), the Centers 

for Disease Control and Prevention 

(CDC), and the Centers for Medicare and 

Medicaid Services (CMS), as well as 

relevant information obtained from the 

states. The amendment will ensure that 

information will be requested from the 

relevant HHS components and will be 

considered in setting the aggregate 

production quotas. 

The final rule provides that the 

Administrator will consider information 

from the states in setting the aggregate 

production quotas and make additional 

changes enhancing their role in 

§ 1303.11(c). The states are critically 

situated to provide information about 

the extent of legitimate and illegitimate 

use of controlled substances because of 

their responsibilities for drug 

enforcement within their jurisdictions, 

including through the Prescription Drug 

Monitoring Programs (PDMP), their 

responsibilities for administration of 

their health care systems, and their 

responsibilities for dealing with the 

human and social costs of drug abuse 

and diversion. States may have relevant 

information indicating that individual 

procurement quota requests reflect 

quantities which will in fact be diverted 

to illicit use, which may in turn yield 

an exaggerated picture of the aggregate 

production quotas needed for legitimate 

purposes. 

The final rule accordingly includes 

amendments to § 1303.11(c) which 

provide for (i) transmitting notices of 

proposed aggregate production quotas, 

and final aggregate production quota 

orders, to the state attorney general, and 

(ii) holding a hearing if necessary to 

resolve an issue of material fact raised 

by a state’s objection to a proposed 

aggregate production quota as excessive 

in relation to legitimate United States 

need. 

Section 1303.12—Procurement Quotas 

Section 1303.12 currently directs the 

Administrator to issue procurement 

quotas for manufacturers that use 

controlled substances to put them into 

dosage form or to make other 

substances. The section requires 

applicants for procurement quotas to 

state what basic class of controlled 

substance is needed, the purpose or 

purposes for which the class is desired, 

the quantity desired for each purpose 

during the next calendar year, and the 

quantities used and estimated to be used 

for each purpose during the current and 

preceding two calendar years. If the 

applicant’s purpose is to manufacture 

another basic class of controlled 

substance, the applicant also must state 

the quantity of the other basic class that 

the applicant has applied to 


sradovich on DSK3GMQ082PROD with RULES
Federal Register / Vol. 83, No. 136 / Monday, July 16, 2018 / Rules and Regulations 32785 

1https://www.cdc.gov/media/releases/2018/ 

p0329-drug-overdose-deaths.html. 

manufacture, and the quantity of the 

first basic class necessary to 

manufacture a specified quantity of the 

second basic class. 

The final rule amends § 1303.12(b) to 

clarify that the Administrator may 

require additional information from 

applicants that may help to detect or 

prevent diversion, including customer 

identities and amounts of the controlled 

substance sold to each customer. 

Section 1303.13—Adjustments of 

Aggregate Production Quotas 

Section 1303.13 authorizes the 

Administrator, at any time, to increase 

or reduce the aggregate production 

quotas for basic classes of controlled 

substances that were previously fixed 

pursuant to § 1303.11. The final rule in 

§ 1303.13 parallels some of the 

amendments made to § 1303.11. 

Specifically, it includes changes in the 

extent of any diversion of the controlled 

substance among the factors to be 

considered in adjusting the aggregate 

production quota, requires transmission 

of adjustment notices and final 

adjustment orders to the state attorneys 

general, and provides for a hearing if 

necessary to resolve an issue of material 

fact raised by a state’s objection to a 

proposed adjusted quota as excessive for 

legitimate United States need. 

Section 1303.22—Procedure for 

Applying for Individual Manufacturing 

Quotas 

The final rules amends § 1303.22 to 

clarify that the Administrator may 

require additional information from 

individual manufacturing quota 

applicants that may help to detect or 

prevent diversion, including customer 

identities and amounts of the controlled 

substance sold to each customer. 

Section 1303.23—Procedures for Fixing 

Individual Manufacturing Quotas 

The final rule amends § 1303.23 to 

provide that the factors the 

Administrator may deem relevant in 

fixing individual manufacturing quotas 

include the extent and risk of diversion 

of controlled substances. 

Section 1303.32—Purpose of Hearing 

The final rule includes an amendment 

relating to hearings in § 1303.32(a), 

conforming to the amendments to 

§§ 1303.11(c) and 1303.13(c) concerning 

hearings based on state objections. 

Other Matters 

In addition to the significant changes 

discussed above, the final rule corrects 

a number of typographic errors in the 

current regulations. 

Notice of Proposed Rulemaking 

On April 19, 2018, the DEA published 

a notice of proposed rulemaking 

(NPRM) in the Federal Register, which 

provided an opportunity for comment 

on the proposed rule. The comment 

period closed on May 4, 2018. 83 FR 

17329. The DEA specifically sought 

comments on the provisions regarding 

the factors the Administrator should 

consider when adjusting the aggregate 

production quotas (21 CFR 

1303.13(b)(1)), and the additional 

information the Administrator may 

require from applicants (21 CFR 

1303.12(b) and 21 CFR 1303.22). 

Discussion of Comments 

DEA received a total of 1,561 written 

and electronic comments on the NPRM. 

In the NPRM, the DEA stated that some 

of the proposed rule’s provisions 

relating to seeking information from 

other federal agencies and the states (21 

CFR 1303.11(b)(6)) and those relating to 

the holding of hearings based on state 

objections (21 CFR 1303.11(c), 21 CFR 

1303.13(c), and 21 CFR 1303.32(a)) were 

exempt from the notice and comment 

requirements of the Administrative 

Procedure Act as ‘‘rules of agency 

organization, procedure, or practice.’’ 5 

U.S.C. 553(b)(A). However, many 

commenters still addressed these two 

issues. While the DEA appreciates the 

interest commenters have shown in 

these areas, because they were exempt 

from the notice and comment 

requirements of the APA, the DEA has 

not considered these comments in its 

promulgation of this final rule. 

After a review of the comments, DEA 

noted that there were six main issues 

that commenters raised, and that many 

commenters raised multiple issues in 

their comments. Each issue is 

summarized below, along with the 

DEA’s responses. The DEA has also 

summarized the remainder of the 

comments which did not fit into one of 

the six main issues. 

A. Causes for the Increase in Opioid 

Deaths 

Issue: Approximately 156 commenters 

raised the issue that the increase in 

opioid deaths was due to illicitly 

manufactured opioids coming in from 

Mexico and China and errors in 

reporting deaths involving multiple 

substances, not written prescriptions for 

controlled substances. Advocacy groups 

and the general public voiced concern 

about the accuracy of CDC death 

calculations that they believe led to 

more strict quotas on the pain pills they 

need to live, instead of focusing on the 

issue of illicitly manufactured 

substances like fentanyl and heroin. 

One advocacy group noted that 

available data indicated that the large 

increase in overdose deaths was largely 

due to illicitly manufactured fentanyl, 

heroin, and synthetic opioids, not 

prescription opioids. The advocacy 

group stated that the data reinforced the 

need to address the growing threat 

posed by heroin, counterfeit fentanyl, 

and other counterfeit drugs. 

An association representing 

physicians also noted that although the 

rate of prescription opioid mortality 

continues to rise, illicit fentanyl and 

heroin have become the main 

contributors to opioid-related mortality. 

A coalition commented that a major 

issue with the proposed rule was that it 

would do nothing to solve the current 

opioid epidemic because illicit fentanyl 

and heroin cause most of the overdoses 

in the United States, not prescription 

opioids. The coalition referenced 

journal articles for statistics to support 

their argument. The coalition also noted 

that the vast majority of the illicit 

fentanyl that is arriving into the United 

States is coming from China through the 

U.S. Postal Service, and that the policies 

in the proposed rule would have no 

effect on the current number of overdose 

deaths. 

One law firm noted that after a reevaluation of CDC data and DEA’s own 

analyses, it has become evident that the 

current opioid ‘‘crisis’’ is caused by 

illicit synthetic opioids, particularly 

fentanyl and deadlier fentanyl 

derivatives with no medical use. 

DEA Response: This final rule does 

not establish specific quotas. Instead, 

this final rule revises and improves the 

process for DEA to follow in gathering 

information and taking other actions 

pertaining to quotas. The CDC has 

acknowledged that they have a new 

analysis confirming recent increases in 

drug overdose death,1 however, as 

stated in the NPRM, the CDC’s data will 

not be the only source of information 

the DEA will be considering. The DEA 

will also consider relevant information 

from other components of HHS, as well 

as relevant information from the States. 

The DEA believes that the misuse of 

controlled prescription drugs (CPDs) is 

inextricably linked with the threat the 

United States faces from the trafficking 

of heroin and illicit fentanyl and 

fentanyl analogues. In 2016, almost 3.4 

million Americans age 12 or older 

reported misusing prescription pain 


sradovich on DSK3GMQ082PROD with RULES
32786 Federal Register / Vol. 83, No. 136 / Monday, July 16, 2018 / Rules and Regulations 

2Substance Abuse and Mental Health Services 

Administration. (2017). Key substance use and 

mental health indicators in the United States: 

Results from the 2016 National Survey on Drug Use 

and Health (HHS Publication No. SMA 17–5044, 

NSDUH Series H–52). Rockville, MD: Center for 

Behavioral Health Statistics and Quality, Substance 

Abuse and Mental Health Services Administration. 

Retrieved from https://www.samhsa.gov/data/. 

3Cicero TJ, Ellis MS, Surratt HL, Kurtz SP. (2014). 

The changing face of heroin use in the United 

States: A retrospective analysis of the past 50 years. 

JAMA Psychiatry.71(7):821–826. 

4Substance Abuse and Mental Health Services 

Administration. (2017). Key substance use and 

mental health indicators in the United States: 

Results from the 2016 National Survey on Drug Use 

and Health (HHS Publication No. SMA 17–5044, 

NSDUH Series H–52). Rockville, MD: Center for 

Behavioral Health Statistics and Quality, Substance 

Abuse and Mental Health Services Administration. 

Retrieved from https://www.samhsa.gov/data/. 

relievers within the past month.2

Roughly 75 percent of heroin users 

reported nonmedical use of prescription 

opioids before using heroin (though the 

vast majority of individuals misusing 

opioid CPDs do not go on to use 

heroin).3 Many stated that they first 

obtained these drugs for free from the 

family medicine cabinet or from 

friends 4 but then sought street or black 

market drugs to maintain their 

addiction. This illustrates the role that 

CPDs have played in the opioid 

epidemic and underscores the 

continued need for robust regulatory 

and enforcement measures to stop 

diversion of CPDs. Black-market sales 

for opioid CPDs are typically five to ten 

times their retail value, and DEA 

intelligence reveals the ‘‘street’’ cost of 

prescription opioids steadily increases 

with the relative strength of the drug. 

B. The Injectable Shortage and 

Adjusting the Quota Process 

Issue: The DEA received 23 comments 

concerning how manufacturing quotas 

may cause a shortage of injectable 

opioids. Commenters were concerned 

that injectable opioids that are used 

routinely for surgeries and cancer 

treatment, such as injectable morphine, 

hydromorphone, and fentanyl would 

not be available to hospitals and 

patients. Commenters attributed the 

perceived shortages of these drugs to 

manufacturing setbacks and a 

government effort to restrict the amount 

of opioids and other pain medicines to 

be manufactured. Commenters stated 

that due to the alleged shortage of these 

drugs, hospitals are having a difficult 

time treating patients and finding 

alternatives for pain management. 

Many commenters stated that the DEA 

is focusing on the wrong issues. A 

majority asserted that synthetic drugs 

are the cause of most of the overdose 

opioid deaths, and that the government 

should focus on those synthetic drugs 

instead of creating regulations that they 

feel lead to a reduction in injectable 

opioids. 

Comments received from 

organizations and associations asserted 

that there is no risk of diversion for 

injectables. It was stated numerous 

times that the DEA should consider 

adding drug shortage information as a 

factor when establishing and adjusting 

quotas. It was also recommended that 

the DEA add the intent to resolve drug 

shortages to the relevant factors 

considered in adjusting quotas. 

DEA Response: The DEA is 

committed to ensuring that quotas are 

set in such a way as to grant 

manufacturers the ability to provide 

FDA-approved drug products to meet 

the demand of the legitimate medical, 

scientific, and export needs of the 

United States. As required in 21 U.S.C. 

826(h), when there is a shortage, the 

DEA will ‘‘increase the aggregate and 

individual production quotas and any 

ingredients therein to the level 

requested.’’ When it is determined that 

the level requested is not necessary to 

address a shortage, the DEA provides a 

written response detailing the basis for 

the decision. 21 U.S.C. 826(h)(1)(B)(ii). 

Quotas granted to the dosage form 

manufacturers based on legitimate 

medical need will always be considered 

in the aggregate production quota. The 

DEA will always take into consideration 

any changes in market dynamics that 

may require allocation of individual 

manufacturers’ quotas or revisions of 

the aggregate production quota. The 

DEA, however, cannot set quotas based 

on individual pharmaceutical dosage 

forms (21 U.S.C. 826(a)) nor can DEA 

compel manufacturers to manufacture 

specific individual pharmaceutical 

dosage forms even though the latter may 

lead to manufacturer induced shortages 

based on their internal business 

decisions. Thus, independent of DEA’s 

adjustment of quotas, manufacturers’ 

business decisions and manufacturing 

practices may lead to a shortage of 

certain individual pharmaceutical 

dosage forms, despite the adequacy of 

the applicable aggregate production 

quota. 

C. The DEA’s Methodology for 

Quantifying Diversion 

Issue: The DEA received 16 comments 

regarding DEA’s methodology for 

determining quantities of controlled 

substances being diverted. Three 

commenters recommended that the DEA 

obtain data from HHS, CDC, and CMS 

on topics such as patterns of drug abuse, 

and that such information be considered 

for calculating aggregate production 

quota. The same commenters suggested 

that the information from HHS, CDC, 

and CMS can contribute to appropriate 

methods for determining quantities of 

controlled substances being diverted. 

Another commenter stated that the DEA 

does not distinguish between diversion 

and abuse when considering the quota 

formula. Seven commenters stated that 

DEA does not have reliable measures to 

calculate diversion of controlled 

substances. One of these commenters 

stated that DEA did not provide any 

examples or explanations on how DEA 

will collect measureable data. Two 

commenters suggested that DEA obtain 

data from the FDA on controlled 

substances shortages (which can be 

broken down by dosage) to help the 

DEA quantify a clear picture of 

diversion risks by the specific dosage 

forms. Another commenter stated that 

DEA did not provide any scientific data 

that supports DEA claim that quota 

reductions decrease diversion of 

controlled substances. 

One commenter suggested DEA work 

on anti-diversion legislation that will 

put requirements in place during the 

manufacturing process to prevent 

diversion of controlled substances so it 

will not affect quotas. Another 

commenter requested DEA to provide 

quantitative evidence to show the 

impact current reductions have had on 

diversion of controlled substances. 

DEA Response: The DEA is 

committed to continuously developing 

sound and reliable methods for 

determining quantities of controlled 

substances being diverted. Currently, 

DEA’s reliable method to measure the 

diversion of controlled substances 

occurs at the level of individual dosage 

manufacturers rather than at the 

aggregate production quota level. 

Selected opioid dispositions from these 

manufacturers are compared to known, 

completed regulatory and operation 

enforcement actions and counted 

toward diverted quantities for 

individual manufacturers and not the 

aggregate production quota itself. 

Modifications to section 1303.11 

would allow relevant information from 

appropriate HHS components to be 

considered in setting the aggregate 

production quota. HHS studies the use 

and misuse of controlled substances 

regarding the quantities of controlled 

substances necessary to support the 

medical needs in the United States 

pursuant to 42 U.S.C. 242(a). 

Furthermore, the CDC and the CMS may 

have relevant information related to the 

patterns of drug abuse and the diversion 

of controlled substances for illicit use 

which DEA will also consider when 

setting the aggregate production quota. 

The information collected from HHS 


sradovich on DSK3GMQ082PROD with RULES
Federal Register / Vol. 83, No. 136 / Monday, July 16, 2018 / Rules and Regulations 32787 

5Challenges and Solutions in the Opioid Abuse 

Crisis: Hearing Before the H. Comm. On the 

Judiciary, 115th Cong. 6,10 (2018) (statement of 

Robert W. Patterson, Acting Administrator, Drug 

Enforcement Administration). 

through FDA, CDC, and CMS, and that 

collected from the states, will improve 

DEA’s ability to distinguish diversion of 

controlled substances at a more 

geographically localized level. The 

information collected will enhance the 

DEA’s ability to determine registrant’s 

compliance with suspicious order 

monitoring regulations. The 

modifications to section 1303.22 will 

allow the Administrator to require 

additional information from 

manufacturing quota applicants that 

will assist the DEA in detecting or 

preventing diversion of controlled 

substances. 

The Administrator of the DEA has the 

authority to determine the total quantity 

of each basic class of controlled 

substance listed in Schedule I or II 

needed in each calendar year for 

medical, scientific, research and 

industrial needs of the United States, for 

lawful export, and for the establishment 

and maintenance of reserve stocks. The 

DEA has observed a decline for certain 

prescriptions written for Schedule II 

opioids since 2014 which can be 

attributed to federal and state 

government activities and interventions, 

including the implementation of 

Prescription Drug Monitoring Programs, 

enforcement of current regulations, and 

guidance documents such as the CDC 

Guideline for Prescribing Opioids for 

Chronic Pain—United States March 

2016. 

D. Trend in the Number of Prescriptions 

Written for Controlled Substances 

Issue: The DEA received 36 comments 

from commenters stating that 

prescription data shows that there has 

been a downward trend in the 

prescribing of controlled substances for 

the last several years, therefore 

prescription opioids are not responsible 

for the current opioid epidemic. As 

such, the commenters believed there 

was no need for the regulations to be 

updated. There were comments received 

from patients describing their inability 

to receive prescriptions for pain 

medications; they stated that their 

doctors had placed blame on the DEA. 

DEA Response: The DEA 

acknowledges that prescriptions for 

opioid drug products have decreased 

over the last several years due to the 

stepped up civil, criminal, and 

regulatory enforcement efforts of the 

agency. However, while there is a 

downward trend in prescribing, these 

schedule II prescription opiates 

continue to have a high potential for 

abuse and dependence and require the 

annual assessment of quotas. These 

decreases can be attributed to DEA’s 360 

Strategy, which combines local, state, 

and federal activities and interventions, 

including creating new partnerships, 

enforcing current regulations, and 

dissemination of provider education 

and guidance documents, including the 

CDC Guideline for Prescribing Opioids 

for Chronic Pain released in March 

2016. In addition, more states have 

enacted and are enforcing laws 

mandating the use of PDMPs by medical 

providers and pharmacists, which 

provides prescribers with valuable 

information to guide their medical 

decisions.5 As such, this final rule will 

allow the downward trend to continue 

through the continued sharing of 

information from different HHS 

components and states. 

E. Fifteen Day Comment Period 

Issue: The DEA received 5 comments 

from commenters who felt the proposed 

rule’s comment period was too short. 

One commenter suggested that the 

comment period remain open for 180 

days because of the complex issues 

being addressed in the document. Two 

commenters voiced displeasure with the 

length of the comment period stating 

that it made it seem like the average 

citizens’ opinion was not being valued. 

One national organization noted that 

the comment period provided by the 

DEA was unusual in its brevity. The 

national organization referenced 

Executive Order 13563, as well as 

guidance from the Administrative 

Conference of the United States, to 

suggest that the DEA comment period 

should have at least been 30 days since 

it was a rulemaking that was not 

considered ‘‘significant.’’ The national 

organization stated that they were not 

certain that the additional 15 days 

necessary to achieve the 30-day period 

for review and input by experts outside 

of the agency would meaningfully 

‘‘impede putting into effect the 

diversion countermeasures [the 

proposal] authorizes.’’ 

DEA Response: The APA does not 

specify a minimum time for submission 

of written comments. Agencies must 

provide the public with a ‘‘meaningful 

opportunity’’ to comment on a proposed 

notice. Rural Cellular Ass’n v. FCC, 588 

F.3d 1095 (D.C. Cir. 2009). While the 

length of the comment period is a factor 

in determining whether the public was 

afforded a ‘‘meaningful opportunity’’ to 

comment, courts have upheld comment 

periods of less than 30 days. See, e.g. 

Omnipoint Corp. v. FCC, 78 F.3d 620 

(D.C. Cir. 1996) (upholding 15-day 

comment period where there was 

‘‘urgent necessity for rapid 

administrative action under the 

circumstances’’ and the public was not 

harmed). 

Under Executive Order 13563, there is 

a presumption that a period of 60 days 

should be allotted for the comment 

period. The Administrative Conference 

of the United States’ recommendations 

serve as guidance for the notice-andcomment period. While they 

recommend 30 to 60 days depending on 

the significance of a rule, they also 

recommend that agencies provide an 

explanation when they set a shorter 

comment period, as was done in the 

NPRM. 76 FR 48791 (Aug. 9, 2011). 

Here, the DEA received more than 

1,500 comments, many of which 

included a thoughtful and detailed 

analysis. Due to the opioid epidemic as 

expressed in the proposed rule and the 

urgent need to finalize this rule, the 15- 

day comment period was sufficient. 

F. Clarification of What Additional Data 

DEA May Seek From Registrants 

Issue: There were 11 comments 

received seeking clarification of what 

additional information the 

Administrator may require from 

registrants. The majority of the 

comments received were from industry 

and advocacy groups. While they agreed 

that steps need to be taken to address 

the current opioid epidemic, the views 

were not completely in support of the 

possibility of having to turn in 

additional information. 

One company felt the proposed 

changes seemed to codify the current 

practice of considering ARCOS 

(Automated Reporting and Consolidated 

Orders System) data when setting 

quotas. Many comments under this 

issue suggested that the DEA clearly 

detail what information would be 

required. A trade group also explained 

that knowing what the DEA could 

request beforehand would allow 

manufacturers the ability to ensure that 

systems are in place to collect and 

provide relevant data in a timely 

manner. The group felt that the DEA 

should determine whether additional 

data should be required beyond what is 

already required for schedule II 

controlled substances by way of the 

DEA Form 222. The group also 

requested that the DEA make sure that 

any additional requested information 

not place an undue burden on 

manufacturers or delay the issuance of 

initial quotas. They argued that DEA 

needs to include adequate protection of 

proprietary and sensitive commercial 

and financial information provided by 

the manufacturers, because the 


sradovich on DSK3GMQ082PROD with RULES
32788 Federal Register / Vol. 83, No. 136 / Monday, July 16, 2018 / Rules and Regulations 

6 21 CFR 1305.11–1305.19. 

additional data allowed for the 

collection of trade secrets or 

confidential commercial information. 

One association asked for the additional 

data to be used in a timely fashion to 

help anticipate and address potential 

shortages in the future. Another 

organization strongly objected to the 

proposed rule, because they did not see 

how the additional information could be 

useful in reducing opioid abuse and 

overdose when the main source of the 

problem is illicit drugs. 

A pharmaceutical company requested 

that the DEA provide opportunities for 

companies to receive guidance and 

training on how to best satisfy the 

additional information requirements. 

Another pharmaceutical company stated 

they contract with Contract 

Manufacturing Organizations (CMO) for 

the manufacturing of their finished drug 

products, and that because of this the 

CMO would be the actual quota 

applicant but would not be equipped 

with the additional information to help 

in detecting and preventing diversion. 

Two states commented on this issue 

and both applauded the DEA for taking 

action. West Virginia stated that 

obtaining additional information would 

be helpful because some of the 

legitimate demand may be double 

counted by way of multiple applicants 

relying on the same amounts of 

legitimate demand from the same 

customers. West Virginia’s view was 

that the additional information will 

allow the DEA to prevent excess quota 

levels. Ohio also agreed with the 

proposed rule and encouraged the DEA 

to consider a more rigorous and 

information-driven quota application 

process. 

DEA Response: The DEA 

acknowledges that the CSA’s 

requirement for allotting quotas for 

manufacturers was enacted on the 

business model of a vertically integrated 

system. Since its enactment, 

manufacturers have determined new 

and innovative ways of conducting 

business, as a response to a more robust, 

competitive market. While the CSA 

allows for adequate domestic 

competition, it also limits this 

competition to the legitimate medical, 

scientific, and industrial needs of the 

United States. The DEA has always had 

the ability to request information to 

clarify and support a manufacturer’s 

request for quota to ensure that any 

quota granted is limited to legitimate 

need. Detailed information about what 

may be requested for clarification or 

support cannot be provided because the 

request would be on a case-by-case 

basis. DEA does not provide a list of 

additional items needed to process 

quotas because they may not pertain to 

every registrant. Therefore, additional 

data will be determined in light of the 

information manufacturers provide to 

the DEA as justification for a quota. 

Manufacturers of schedule I and II 

substances provide information needed 

to assist the DEA in making a quota 

determination. The information 

provided is based on their individual 

business activities. Regulations require 

manufacturers to utilize DEA Form 222 6

to document purchase and disposition 

information between DEA registrations; 

similar information is also transmitted 

to ARCOS. A limitation of ARCOS can 

be the reporting period a company opts 

to report their data (monthly or 

quarterly) and the timeliness of 

corrections to any errors in the reported 

data. There is no undue burden or cost 

to supply this information because it is 

already being captured in some form by 

the company per CSA regulations and 

good business practices. 

The DEA communicates with 

registrants who have pending quota 

applications via telephone or email 

when necessary, to request clarification 

or additional information required to 

process their applications in a timely 

manner. The DEA also maintains an 

email box that registrants may 

preemptively supply information and 

communicate concerns related to quota 

requirements. Appropriate safeguards 

are currently in place to protect 

confidential business information. 

As stated above, requesting 

clarification or additional information is 

a current practice of DEA. The DEA 

provides training conferences annually, 

in strategic locations, to help registrants 

understand quota and reporting 

requirements. The agency also provides 

the presentations from the trainings on 

the DEA website. During these 

conferences, DEA explicitly states it 

never provides confidential and 

proprietary information supplied by 

registrants to outside sources. The 

additional information that may be 

requested is important and an integral 

part of the analysis as it helps DEA 

determine the amount of quota a 

manufacturer should be granted. 

G. Other Comments 

Approximately 1,300 comments were 

received from the general public 

expressing concerns about the proposed 

regulations affecting their ability to get 

their prescriptions, and the possibility 

of drug shortages being created because 

of the proposed rule. The DEA 

understands and appreciates the nature 

of the comments. It is not the DEA’s 

intent to create shortages or prevent a 

patient with a legitimate need from 

getting their prescription. The purpose 

of the proposed rule is to improve the 

process of setting the annual quota 

while ensuring an adequate supply is 

available for the United States’ 

legitimate needs. 

Regulatory Flexibility Act 

The Administrator, in accordance 

with the Regulatory Flexibility Act (5 

U.S.C. 601–612), has reviewed this final 

rule and by approving it certifies that 

the rule will not have a significant 

economic impact on a substantial 

number of small entities. 

The DEA estimates that 325 

manufacturers may be affected by the 

final rule, of which 301 manufacturers 

(92.6% of the total) are small entities. 

There will not be a significant economic 

impact on a substantial number of these 

small entities or any others because, as 

the ensuing certifications discuss, any 

overall cost of the rule is not significant. 

Executive Orders 12866, 13563, and 

13771—Regulatory Planning and 

Review, and Reducing Regulation and 

Controlling Regulatory Costs 

This regulation has been drafted and 

reviewed in accordance with Executive 

Order 12866, ‘‘Regulatory Planning and 

Review,’’ section 1(b), Principles of 

Regulation, and Executive Order 13563, 

‘‘Improving Regulation and Regulatory 

Review.’’ The DEA has determined that 

this final rule is not a ‘‘significant 

regulatory action’’ under Executive 

Order 12866, section 3(f). The DEA 

analyzed the economic impact of each 

provision of this final rule. Section 

1303.11 is amended to make two 

additions to the list of factors to be 

considered by the Administrator in 

setting the aggregate production quotas. 

First, it adds the extent of any diversion 

of the controlled substance in the class. 

Second, it adds relevant information 

from HHS and its components, as well 

as from the states. The DEA has always 

considered any information obtained 

from other federal and state government 

agencies when fixing the aggregate 

production quotas for a controlled 

substance. While the DEA may receive 

additional information that is valuable 

in detecting and preventing diversion, 

the DEA has no reason to believe that 

there will be adverse economic impact 

or other consequences sufficient to 

implicate Executive Order (E.O.) 12866. 

Additionally, §§ 1303.11 and 1303.13 

are amended to require the DEA to 

transmit copies of aggregate production 

quotas and any adjustments to those 

quotas published in the Federal 

Register directly to state attorneys 


sradovich on DSK3GMQ082PROD with RULES
Federal Register / Vol. 83, No. 136 / Monday, July 16, 2018 / Rules and Regulations 32789 

general. While the DEA anticipates 

some labor burden to transmit aggregate 

production quota notices and orders to 

each state attorney general, the DEA 

estimates that this activity will result in 

a minimal yearly cost to the DEA and 

that the DEA has sufficient resources to 

absorb this minimal cost. 

Additionally, §§ 1303.11, 1303.13, 

and 1303.32 are amended to explicitly 

state that the DEA Administrator shall 

hold a hearing if he or she determines 

it is necessary to resolve an issue of 

material fact raised by a state objecting 

to the proposed quantity for the class as 

excessive for legitimate United States 

need. The estimated yearly cost of this 

revision will be dependent on the 

number of hearings the DEA 

Administrator determines to be 

necessary to resolve an issue of material 

fact raised by a state regarding the 

aggregate production quota. Hearings 

regarding aggregate production quotas 

are infrequent and the DEA estimates 

that hearings of this type will continue 

to be infrequent under this final rule. 

For these reasons, the DEA does not 

expect a material increase in the number 

of hearings or in the associated costs to 

DEA or the states. 

Sections 1303.12 and 1303.22 are 

amended to explicitly state that the 

Administrator may require additional 

information from an individual 

manufacturing or procurement quota 

applicant, including customer identities 

and amounts of controlled substances 

sold to each of their customers. 

Currently, the DEA can and does request 

additional information of this nature 

from quota applicants if deemed 

necessary. While affording the 

Administrator express regulatory 

authority to require such information 

may result in the receipt of additional 

information that is valuable in detecting 

and preventing diversion, it is not 

expected that the difference will have 

adverse economic impact or other 

consequences sufficient to implicate 

E.O. 12866. 

Sections 1303.11, 1303.13, and 

1303.23 are amended to add the 

requirement that the DEA consider 

diversion of a controlled substance 

when fixing aggregate production 

quotas, adjusting aggregate production 

quotas, and fixing individual 

manufacturing quotas. When fixing and 

adjusting the aggregate production 

quota, or fixing an individual 

manufacturing quota for a controlled 

substance, the DEA has always 

considered all available information 

regarding the diversion of that 

controlled substance. While the final 

rule’s amendments, as discussed above, 

may result in the receipt and 

consideration of additional information 

relating to diversion, it is not expected 

that the difference will have adverse 

economic impact or other consequences 

sufficient to implicate E.O. 12866. 

This final rule is not an E.O. 13771 

regulatory action because this final rule 

is not significant under E.O. 12866. 

Executive Order 13132—Federalism 

This regulation will not have 

substantial direct effects on the states, 

on the relationship between the national 

Government and the states, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Therefore, in 

accordance with Executive Order 13132, 

it is determined that this final rule does 

not have sufficient federalism 

implications to warrant the preparation 

of a federalism assessment. 

Executive Order 12988—Civil Justice 

Reform 

This regulation meets the applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988. 

Paperwork Reduction Act 

This final rule codifies current agency 

practice under existing approved 

information collections, and does not 

impose new information collection 

requirements under the Paperwork 

Reduction Act of 1995, 44 U.S.C. 3501– 

3521. 

Unfunded Mandates Reform Act of 

1995 

This final rule will not result in the 

expenditure by State, local and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year, and it will not 

significantly or uniquely affect small 

governments. Therefore, no actions were 

deemed necessary under the provisions 

of the Unfunded Mandates Reform Act 

of 1995. 

Congressional Review Act 

This rulemaking is not a major rule as 

defined by section 251 of the 

Congressional Review Act. 5 U.S.C. 804. 

This final rule will not result in an 

annual effect on the economy of $100 

million or more; a major increase in 

costs or prices; or significant adverse 

effects on competition, employment, 

investment, productivity, or innovation, 

or on the ability of United States-based 

enterprises to compete with foreignbased enterprises in domestic and 

export markets. 

List of Subjects in 21 CFR Part 1303 

Administrative practice and 

procedure, Drug traffic control. 

Accordingly, for the reasons stated in 

the preamble, part 1303 of title 21 of the 

Code of Federal Regulations is amended 

as follows: 

PART 1303—QUOTAS 

■ 1. The authority citation for part 1303 

continues to read as follows: 

Authority: 21 U.S.C. 821, 826, 871(b). 

■ 2. In § 1303.11: 

■ a. Remove the word ‘‘and’’ at the end 

of paragraph (b)(4). 

■ b. Redesignate paragraph (b)(5) as 

paragraph (b)(7). 

■ c. Add new paragraph (b)(5) and 

paragraph (b)(6). 

■ d. Revise paragraph (c). 

The additions and revision read as 

follows: 

§ 1303.11 Aggregate production quotas. 

* * * * * 

(b) * * * 

(5) The extent of any diversion of the 

controlled substance in the class; 

(6) Relevant information obtained 

from the Department of Health and 

Human Services, including from the 

Food and Drug Administration, the 

Centers for Disease Control and 

Prevention, and the Centers for 

Medicare and Medicaid Services, and 

relevant information obtained from the 

states; and 

* * * * * 

(c) The Administrator shall, on or 

before May 1 of each year, publish in 

the Federal Register, general notice of 

an aggregate production quota for any 

basic class determined by him under 

this section. A copy of said notice shall 

be mailed simultaneously to each 

person registered as a bulk manufacturer 

of the basic class and transmitted to 

each state attorney general. The 

Administrator shall permit any 

interested person to file written 

comments on or objections to the 

proposal and shall designate in the 

notice the time during which such 

filings may be made. The Administrator 

may, but shall not be required to, hold 

a public hearing on one or more issues 

raised by the comments and objections 

filed with him, except that the 

Administrator shall hold a hearing if he 

determines it is necessary to resolve an 

issue of material fact raised by a state 

objecting to the proposed quantity for 

the class as excessive for legitimate 

United States’ needs. In the event the 

Administrator decides to hold a hearing, 

he shall publish notice of the hearing in 

the Federal Register, which notice shall 

summarize the issues to be heard and 

shall set the time for the hearing, which 

shall not be less than 30 days after the 


sradovich on DSK3GMQ082PROD with RULES
32790 Federal Register / Vol. 83, No. 136 / Monday, July 16, 2018 / Rules and Regulations 

date of publication of the notice. After 

consideration of any comments or 

objections, or after a hearing if one is 

ordered by the Administrator, the 

Administrator shall issue and publish in 

the Federal Register his final order 

determining the aggregate production 

quota for the basic class of controlled 

substances. The order shall include the 

findings of fact and conclusions of law 

upon which the order is based. The 

order shall specify the date on which it 

shall take effect. A copy of said order 

shall be mailed simultaneously to each 

person registered as a bulk manufacturer 

of the basic class and transmitted to 

each state attorney general. 

■ 3. In § 1303.12, paragraph (b), add 

after the fifth sentence a new sentence 

to read as follows: 

§ 1303.12 Procurement quotas. 

* * * * * 

(b) * * * The Administrator may 

require additional information from an 

applicant which, in the Administrator’s 

judgment, may be helpful in detecting 

or preventing diversion, including 

customer identities and amounts of the 

controlled substance sold to each 

customer. * * * 

* * * * * 

■ 4. In § 1303.13, revise paragraphs 

(b)(1) and (c) to read as follows: 

§ 1303.13 Adjustments of aggregate 

production quotas. 

* * * * * 

(b) * * * 

(1) Changes in the demand for that 

class, changes in the national rate of net 

disposal of the class, changes in the rate 

of net disposal of the class by registrants 

holding individual manufacturing 

quotas for that class, and changes in the 

extent of any diversion in the class; 

* * * * * 

(c) The Administrator in the event he 

determines to increase or reduce the 

aggregate production quota for a basic 

class of controlled substance, shall 

publish in the Federal Register general 

notice of an adjustment in the aggregate 

production quota for that class 

determined by him under this section. 

A copy of said notice shall be mailed 

simultaneously to each person 

registered as a bulk manufacturer of the 

basic class and transmitted to each state 

attorney general. The Administrator 

shall permit any interested person to file 

written comments on or objections to 

the proposal and shall designate in the 

notice the time during which such 

filings may be made. The Administrator 

may, but shall not be required to, hold 

a public hearing on one or more issues 

raised by the comments and objections 

filed with him, except that the 

Administrator shall hold a hearing if he 

determines it is necessary to resolve an 

issue of material fact raised by a state 

objecting to the proposed adjusted quota 

as excessive for legitimate United States’ 

needs. In the event the Administrator 

decides to hold a hearing, he shall 

publish notice of the hearing in the 

Federal Register, which notice shall 

summarize the issues to be heard and 

shall set the time for the hearing, which 

shall not be less than 10 days after the 

date of publication of the notice. After 

consideration of any comments or 

objections, or after a hearing if one is 

ordered by the Administrator, the 

Administrator shall issue and publish in 

the Federal Register his final order 

determining the aggregate production 

for the basic class of controlled 

substance. The order shall include the 

findings of fact and conclusions of law 

upon which the order is based. The 

order shall specify the date on which it 

shall take effect. A copy of said order 

shall be mailed simultaneously to each 

person registered as a bulk manufacturer 

of the basic class and transmitted to 

each state attorney general. 

§ 1303.21 [Amended] 

■ 5. In § 1303.21, in paragraph (a), 

remove ‘‘§§ ’’ in the second sentence 

and add in its place ‘‘§ ’’. 

■ 6. In § 1303.22: 

■ a. In paragraph (c)(2), remove the 

word ‘‘econolic’’ and add in its place 

the word ‘‘economic’’. 

■ b. Add paragraph (d). 

The addition reads as follows: 

§ 1303.22 Procedure for applying for 

individual manufacturing quotas. 

* * * * * 

(d) The Administrator may require 

additional information from an 

applicant which, in the Administrator’s 

judgment, may be helpful in detecting 

or preventing diversion, including 

customer identities and amounts of the 

controlled substance sold to each 

customer. 

§ 1303.23 [Amended] 

■ 7. In § 1303.23, add the phrase ‘‘the 

extent of any diversion of the controlled 

substance,’’ after ‘‘strikes),’’ in 

paragraph (a)(2), and add the phrase 

‘‘any risk of diversion of the controlled 

substance,’’ after ‘‘strikes),’’ in 

paragraph (b)(2). 

§ 1303.32 [Amended] 

■ 8. In § 1303.32, in paragraph (a), add 

the phrase ‘‘and shall, if determined by 

the Administrator to be necessary under 

§ 1303.11(c) or 1303.13(c) based on 

objection by a state,’’ before ‘‘hold a 

hearing’’. 

Dated: July 11, 2018. 

Uttam Dhillon, 

Acting Administrator. 

[FR Doc. 2018–15141 Filed 7–13–18; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Parts 28, 30, 87, 180, and 3282 

[Docket No. FR–6076–F–01] 

RIN 2501–AD86 

Adjustment of Civil Monetary Penalty 

Amounts for 2018 

AGENCY: Office of the General Counsel, 

HUD. 

ACTION: Final rule. 

SUMMARY: This rule provides for 2018 

inflation adjustments of civil monetary 

penalty amounts required by the Federal 

Civil Penalties Inflation Adjustment Act 

of 1990, as amended by the Federal 

Civil Penalties Inflation Adjustment Act 

Improvements Act of 2015. 

DATES: Effective date for 2018 inflation 

adjustment: August 15, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Dane Narode, Associate General 

Counsel, Office of Program 

Enforcement, Department of Housing 

and Urban Development, 1250 

Maryland Avenue SW, Suite 200, 

Washington, DC 20024; telephone 

number 202–245–4141 (this is not a tollfree number). Hearing- or speechimpaired individuals may access this 

number via TTY by calling the Federal 

Information Relay Service, toll-free, at 

800–877–8339. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 

2015 (the 2015 Act) (Pub. L. 114–74, 

Sec. 701), which further amended the 

Federal Civil Penalties Inflation 

Adjustment Act of 1990 (Pub. L. 101– 

410), requires agencies to make annual 

adjustments to civil monetary penalty 

(CMP) amounts for inflation 

‘‘notwithstanding section 553 of title 5, 

United States Code.’’ Section 553 refers 

to the Administrative Procedure Act, 

which might otherwise require a delay 

for advance notice and opportunity for 

public comment on future annual 

inflation adjustments. This annual 

adjustment is for 2018. 

The annual adjustment is based on 

the percent change between the U.S. 


sradovich on DSK3GMQ082PROD with RULES