ECONOMIC IMPACT ANALYSIS

of

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

Drug Enforcement Administration

U.S. Department of Justice

December 2012
Table of Contents

CHAPTER 1: OVERVIEW ......................................................................................................................................4

1.1 STATUTORY AUTHORITY.........................................................................................................................................4

1.2 EXECUTIVE ORDERS 12866 AND 13563 ..................................................................................................................5

1.3 REGULATORY FLEXIBILITY ACT .................................................................................................................................6

1.4 PURPOSE ............................................................................................................................................................6

CHAPTER 2: REGISTRANT LANDSCAPE ................................................................................................................7

2.1 DEA REGISTRANTS ...............................................................................................................................................7

2.2 DESCRIPTION OF SMALL ENTITIES AFFECTED ..............................................................................................................8

2.2.1 Population Affected by Proposed Rule...................................................................................................9

2.2.2 Corresponding Number of Affected Businesses .....................................................................................9

2.2.3 Number of Affected Businesses that Are Small Businesses..................................................................15

CHAPTER 3: ALTERNATIVE REGISTRANT AND NON-REGISTRANT DISPOSAL METHODS CONSIDERED ............... 17

3.1 SCOPE OF ANALYSIS ............................................................................................................................................17

3.2 NON-REGISTRANT DISPOSAL ................................................................................................................................18

3.2.1 Single Collection...................................................................................................................................19

3.2.2 Open Collection....................................................................................................................................20

3.2.3 Multiple Collection (Selected Methodology)........................................................................................21

3.3 REGISTRANT DISPOSAL ........................................................................................................................................21

3.3.1 Retain Existing Regulations..................................................................................................................21

3.3.2 Establish Consistent National Standards (Selected Methodology) ......................................................22

3.4 REVERSE DISTRIBUTORS.......................................................................................................................................23

3.4.1 On-site Requirement............................................................................................................................23

3.4.2 Prompt Requirement............................................................................................................................24

3.4.3 No Requirement...................................................................................................................................24

3.4.4 Fourteen Calendar Day Requirement...................................................................................................25

CHAPTER 4: ANTICIPATED ECONOMIC IMPACT OF PROPOSED RULE ................................................................ 26

4.1 REGISTRANT DISPOSAL ........................................................................................................................................26

4.1.1 Impact on Registrants that Destroy Controlled Substances.................................................................26

4.1.2 Impact on Reverse Distributors............................................................................................................29

4.2 NON-REGISTRANT DISPOSAL ................................................................................................................................33

4.2.1 Impact on Collectors ............................................................................................................................33

4.2.2 Impact on Reverse Distributors and Distributors.................................................................................34

4.2.3 Impact on Law Enforcement Agencies.................................................................................................35

4.3 RETURN AND RECALL ..........................................................................................................................................36

4.4 DESTRUCTION....................................................................................................................................................37

4.5 ANNUAL ECONOMIC EFFECT ON THE ECONOMY .......................................................................................................38

4.6 IMPACT ON SMALL ENTITIES .................................................................................................................................40

CHAPTER 5: COST-BENEFIT ANALYSIS OF PROPOSED REGULATORY ACTION..................................................... 40

5.1 COSTS OF THE PROPOSED RULE.............................................................................................................................40

5.2 BENEFITS OF THE PROPOSED RULE .........................................................................................................................40

5.2.1 Prescription Drug Abuse Epidemic .......................................................................................................41

5.2.2 Monetary Costs of Prescription Drug Abuse ........................................................................................43

5.3 EVALUATION OF THE COSTS AND BENEFITS OF THE PROPOSED RULE (THRESHOLD ANALYSIS).............................................45

CHAPTER 6: CERTIFICATION STATEMENTS........................................................................................................ 47

6.1 EXECUTIVE ORDERS 12866 AND 13563 ................................................................................................................47
3

6.2 REGULATORY FLEXIBILITY ACT ...............................................................................................................................47
4

CHAPTER 1: OVERVIEW

In DEA-316, the notice of proposed rulemaking (NPRM) on the Disposal of Controlled 

Substances, DEA proposes requirements to govern the secure disposal1of controlled substances

by both DEA registrants and ultimate users. These regulations would implement the Secure and 

Responsible Drug Disposal Act of 2010 (Disposal Act) (Public Law 111-273, 124 Stat. 2858) by 

providing ultimate users, persons lawfully entitled to dispose of ultimate user decedent’s 

property, and, in some circumstances, long term care facilities the following safe and convenient 

options to transfer controlled substances for the purpose of disposal: take back events, mail back 

programs, and collection receptacles. This proposed rule also reorganizes and consolidates 

existing regulations on disposal, including the role of reverse distributors, and proposes a 

comprehensive regulatory framework for the collection and destruction of controlled substances 

consistent with the Controlled Substances Act (CSA).

1.1 STATUTORY AUTHORITY

On October 12, 2010, the Secure and Responsible Drug Disposal Act of 2010 (Disposal 

Act) was enacted (Pub. L. 111-273, 124 Stat. 2858). The Disposal Act amended the CSA to 

allow an ultimate user to “deliver” a controlled substance “to another person for the purpose of 

 

1

The terms “disposal,” “dispose,” or “disposition” appear several times in the CSA and its implementing 

regulations, but these terms are not defined. For example, in the CSA, see 21 U.S.C. 822(g); 824(f) and (g); 826(c), 

(e), and (f); 827(a)(3) and (d)(1); 842(a)(7); 853(n); 880(a)(2); 881(e)(1); and 958(d)(6); and in the CFR, see 21 

CFR 1307.21(b). The term “net disposal,” however, is defined at 21 CFR 1300.01(b). As used, the terms refer to a 

variety of activities that ultimately result in eliminating the availability of controlled substances for use. For 

example, within the meaning of the CSA, a controlled substance can be “disposed of” by destruction, return, recall, 

sale, or through the manufacturing process. The Disposal Act allows an ultimate user to deliver a lawfully obtained 

controlled substance to another person “for the purpose of disposal.” DEA believes that the ultimate user disposal 

authorized by the Disposal Act includes the transfer or delivery of controlled substances for purposes of destruction, 

return, and recall. Such ultimate user activities are consistent with the intent to remove unused, unwanted, tainted, 

and expired substances from households and out of the reach of children and teenagers thereby reducing the risk of 

diversion and protecting the public health and safety. As used in this Notice of Proposed Rulemaking, DEA uses the 

terms “disposal” and “dispose” to refer generally to the wide range of activities that result in controlled substances 

being unavailable for further use. When necessary to specify a particular activity within the disposal process, the 

particular activity is identified, e.g., transfer, deliver, collect/collection, return, recall, destroy/destruction. 
5

disposal” if the person receiving the controlled substance is authorized to receive that substance 

and the disposal takes place in accordance with regulations issued by the Attorney General to 

prevent the diversion of controlled substances. 21 U.S.C. 822(g)(1). The Attorney General 

delegated responsibility for promulgating the Disposal Act implementing regulations to DEA. 

In addition to authorizing ultimate users to deliver their controlled substances to another 

person for the purpose of disposal, the Disposal Act also authorized any person lawfully entitled 

to dispose of the ultimate user decedent’s property to deliver the ultimate user’s controlled 

substance if the ultimate user dies while in lawful possession of the controlled substance. The 

Disposal Act also gave DEA the ability to authorize, by regulation, long term care facilities 

(LTCFs) to dispose of controlled substances on behalf of ultimate users who reside or have 

resided at the LTCF. Congress directed DEA, in promulgating the Disposal Act implementing 

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

and participation by various communities. The implementing regulations may not require any 

person to establish or operate a delivery or disposal program.

1.2 EXECUTIVE ORDERS 12866 AND 13563

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

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

Affairs (OIRA) a regulatory impact analysis for matters identified or determined by OIRA to be 

a “significant regulatory action.” A “significant regulatory action” is any regulatory action that 

is likely to result in a rule that may: (1) have an annual effect on the economy of $100 million or 

more, or (2) 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; (3) create a serious inconsistency or otherwise interfere with an 
6

action taken or planned by another agency; (4) materially alter the budgetary impact of 

entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients 

thereof; or (5) raise novel legal or policy issues arising out of legal mandates, the President’s 

priorities, or the principles set forth in Executive Order 12866.2 Executive Order 13563 (76 FR 

3821, January 18, 2011) affirms and supplements Executive Order 12866.

1.3 REGULATORY FLEXIBILITY ACT

In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. §§ 601 et seq.), an 

agency is required to prepare and make available for public comment an initial regulatory 

flexibility analysis for any notice of proposed rulemaking that, if promulgated, will have a 

significant economic impact on a substantial number of small entities. 5 U.S.C. 603. The 

agency is not required to prepare an initial regulatory flexibility analysis, however, if the head of 

such agency can certify that the rule will not, if promulgated, have a significant economic impact 

on a substantial amount of small entities. 5 U.S.C. 605(b). 

1.4 PURPOSE

The purpose of this document is to:

 Describe the registrants affected by this rulemaking, including small entities.

 Analyze alternative methodologies considered for the collection and destruction of controlled 

substances.

 Provide an analysis of the costs and benefits of this rulemaking.

 Analyze whether the annual impact of the proposed rule is a significant regulatory action 

pursuant to Executive Orders 12866 and 13563.

 

2

E.O. 12866, Section 3(f). 
7

 Analyze whether the proposed rule, if promulgated, will have a significant economic impact 

on a substantial number of small entities, pursuant to the Regulatory Flexibility Act.

CHAPTER 2: REGISTRANT LANDSCAPE

2.1 DEA REGISTRANTS

If promulgated, this proposed rule on the disposal of controlled substances will affect 

those manufacturers, distributors, dispensers, importers, and exporters of controlled substances 

that are required to register with DEA pursuant to the CSA (21 U.S.C. 822 and 958(f)). Since all 

registrants have the potential to engage in the disposal of controlled substances, for the purposes 

of this Economic Impact Analysis (EIA), DEA considers all current 1.4 million controlled 

substance registrants to be the entities affected by the proposed rule. As of June 2012, there 

were 1,441,608 controlled substances registrants as shown in Table 1.

Table 1: Number of Registrants by Business Activity

Registrant Class/Business Controlled Substances

Pharmacy 67,687

Hospital/Clinic 15,784

Practitioner 1,135,217

Teaching Institution 316

Mid-Level Practitioner 208,508

Researcher/Canine Handler 9,368

Analytical Lab 1,511

Narcotic Treatment Program 1,298

Distributor 858

Reverse Distributor 62

Importer 216

Exporter 243

Manufacturer 540

Total 1,441,608

*Data as of June 2012.

If promulgated, this proposed rule would affect all 1.4 million controlled substance registrants 

who represent a wide variety of entities. The economic impact is analyzed at the business level, 
8

not at the individual registrant level, since Small Business Administration (SBA) size standards 

are established at the business level. 

2.2 DESCRIPTION OF SMALL ENTITIES AFFECTED

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. The Small Business Act 

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 

for the types of economic activity or industry under the North American Industry Classification 

System (NAICS). SBA sets the maximum size standard – in millions of dollars or number of 

employees – allowed for concerns and their affiliates to be designated small. 13 CFR 121.201.

The RFA requirements and SBA size standards apply to entities and businesses, not to 

individual DEA registrations, and any cost impact of the proposed rule is at the business level, 

not at the individual registration level. Therefore, DEA has associated the number of affected 

registrants to a corresponding number of businesses. 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, DEA employed the following methodology to estimate the number of small business 

affected by this proposed rule.
9

1. Identify the registrant population affected by the proposed rule.

2. Estimate the corresponding number of businesses the affected population 

represents.

3. Estimate the number of affected businesses that are small businesses.

2.2.1 Population Affected by Proposed Rule

As discussed earlier, this proposed rule affects all 1,441,608 controlled substances 

registrants that are registered with DEA. The business activities of the 1,441,608 controlled 

substances registrants are shown in Table 1.

2.2.2 Corresponding Number of Affected Businesses

To determine the corresponding number of businesses affected by the proposed rule, DEA 

related the 1.4 million DEA registrants to the number of businesses, as described below. 

First, since the SBA size standards are organized by NAICS codes, the 1.4 million affected 

registrants were organized by NAICS codes. Because DEA does not collect NAICS code 

information from its registrants, DEA reviewed all NAICS codes3and developed a table that 

relates various registrant groups to NAICS codes based on DEA’s estimate. Table 2 lists the 

DEA registrant groupings with NAICS titles and codes.

Table 2: DEA Registrants and Estimated NAICS Codes

 

3

http://www.census.gov/eos/www/naics/.
10

Registrant Categories and NAICS Code 

Titles

Number of 

DEA 

Registrations

NAICS Codes 

Represented 

by DEA 

Registrants

Manufacturers 540 

Petrochemical Manufacturing 325110

Medicinal and Botanical Manufacturing 325411

Pharmaceutical Preparation Manufacturing 325412

Adhesive Manufacturing 325520

Toilet Preparation Manufacturing 325620

All Other Miscellaneous Chemical Product 

and Preparation Manufacturing

325998

Manufacturer Summary

Distributors/Importer/Exporter 1,379 

Drugs and Druggists’ Sundries Merchant 

Wholesalers

424210

General Line Grocery Merchant 

Wholesalers

424410

Confectionery Merchant Wholesalers 424450

Other Chemical and Allied Products 

Merchant Wholesalers

424690

Tobacco and Tobacco Product Merchant 

Wholesalers

424940

Other Miscellaneous Nondurable Goods 

Merchant Wholesalers

424990

Packaging and Labeling Services 561910

Distributors/Importers/Exporters 

Summary

Pharmacies 67,687

Supermarkets and Other Grocery (except 

Convenience) Stores 445110

Pharmacies and Drug Stores 446110

Discount Department Stores 452112

Warehouse Clubs and Superstores 452910

Others 1,372,002 

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 Miscellaneous Health 

Practitioners

621399

Outpatient Mental Health and Substance 

Abuse Centers

621420

HMO Medical Centers 621491

General Medical and Surgical Hospitals 622110

Psychiatric and Substance Abuse Hospitals 622210

Specialty (except Psychiatric and Substance 

Abuse) Hospitals 622310

Testing Laboratories 541380

Total Controlled Substance Registrants 1,441,608 
11

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

each NAICS code. See Table 3.

Table 3: Number of Businesses by NAICS Codes

Registrant Categories and NAICS Code 

Titles

Number of 

DEA 

Registrations

NAICS Codes 

Represented 

by DEA 

Registrants

Total 

Number of 

Businesses 

by NAICS 

Code* 

Manufacturers 540 4,172

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/Importer/Exporter 1,379 27,401

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 67,687 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

Others 1,372,002 328,286

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

Total Controlled Substance Registrants 1,441,608 

Category 1 Category 2
12

Source: 2007 Economic Census, http://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 EIA.

There are many more businesses for the Manufacturers and 

Distributors/Importers/Exporter NAICS codes than the number of DEA registrants that fall 

within these NAICS codes. There are 540 and 1,379 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 for 

Pharmacies and Other (remaining) NAICS codes are far fewer than the number of DEA 

registrants that fall within these business activities. There are 67,687 and 1,372,002 Pharmacies 

and Other registrants, respectively, while the numbers of establishments for the corresponding 

NAICS codes are only 51,248 and 328,286, respectively. Therefore, DEA broadly classified 

registrants in two categories: 1) Category 1: registrants in industries where very few businesses 

in the industry are registrants; 2) Category 2: registrants in industries where most businesses in 

the industry are registrants. 

Only a small fraction of Manufacturers, Distributors, and Importers/Exporters are DEA 

registrants – 1,919 of 31,573, while nearly all Pharmacies, Hospitals/Clinics, Offices of Doctors, 

etc., are registrants, employ registrants, or may represent multiple registrations, such as several 

Physicians 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, DEA estimates a one-to-one ratio and that 

540 Manufacturer and 1,379 Distributor, Importer/Exporter registrations roughly equate to 540 

and 1,379 businesses, respectively, for registrants in Category 1. 
13

For registrants in the Category 2, Pharmacies, Hospitals/Clinics, Offices of Doctors, 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. DEA estimates that 

67,687 Pharmacy and 1,372,002 remaining Other registrations roughly equate to 379,534 

Category 2 businesses. In total, DEA estimates 381,453 businesses are affected by this proposed 

rule. See Table 4. DEA recognizes that this estimate is not precise, but instead provides 

understanding of orders of magnitude.
14

Table 4: 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 540 4,172 540

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/Importer/Exporter 1,379 27,401 1,379

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 67,687 51,248 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

Others 1,372,002 328,286 328,286

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

Total Controlled Substance Registrants 1,441,608 381,453 

Category 1 Category 2
15

2.2.3 Number of Affected Businesses that Are Small Businesses

DEA then determined how many of the estimated 381,453 affected businesses are small 

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

of its registrants, DEA 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 standard for each NAICS code to determine the number of businesses that are 

small businesses for each NAICS code. See Table 5. 

DEA determined that 97.9 percent of Manufacturers and 96.7 percent of 

Distributors/Importers/Exporters by NAICSs are small businesses. These percentages were 

applied to the total affected businesses (540 Manufacturers and 1,379 Distributors), resulting in 

number of businesses (529 Manufacturers and 1,334 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. Combining the results of Manufacturers, 

Distributors/Importers/Exporters, Pharmacies, and Others, DEA estimates 371,485 of the 

381,453 businesses affected by the proposed rule are small businesses. Again, DEA recognizes 

that its estimate is not precise, but instead provides understanding of orders of magnitude, so that 

DEA can assess whether or not the number of significantly impacted businesses constitute a 

substantial number of small businesses.
16

Table 5: Number of Affected Businesses that Are Small Businesses

Source: 2007 Economic Census, http://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 EIA. 

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 540 4,172 540 529

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

Manufacturer Summary 4,172 4,086 97.9%

Distributors/Importer/Exporter 1,379 27,401 1,379 1,334

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 67,687 51,248 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 ***

Others 1,372,002 328,286 328,286 319,105

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 ***

Total Controlled Substance Registrants 1,441,608 381,453 371,485 Category 1 Category 2
17

** SBA size standards for Manufacturers and Distributor/Reverse Distributors are by number of 

employees, while size standard for Pharmacies Other, and Other-Practitioner/Hospital/Clinic 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 in between increments, half of the number in the 

increment was used to estimate the number below the threshold. For example, 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 total of 110,634.

If promulgated, this proposed rule would affect all 1.4 million controlled substance 

registrants who represent approximately 381,453 businesses affected by the proposed rule. DEA 

estimates that 371,485 (97 percent) of the affected businesses are considered “small entities” in 

accordance with the RFA and SBA standards. 5 U.S.C. 601(6) and 15 U.S.C. 632. 

CHAPTER 3: ALTERNATIVE REGISTRANT AND NON-REGISTRANT 

DISPOSAL METHODS CONSIDERED

3.1 SCOPE OF ANALYSIS

In developing this proposed rule, DEA considered several options for both registrant and 

non-registrant disposal. DEA analyzed alternative methodology approaches keeping in mind its 

statutory obligations under the CSA. First, DEA is required by statute to promulgate disposal 

regulations that will prevent the diversion of controlled substances. 21 U.S.C. 822(g)(1)(B). 

Second, in developing the disposal regulations, DEA is required by statute to consider the public 

health and safety, ease and cost of program implementation, and participation by various 

communities. 21 U.S.C. 822(g)(2). Finally, DEA cannot implement regulations that require any 

person to establish or operate a delivery or disposal program. 21 U.S.C. 822(g)(2). DEA found 

that in order to properly address the disposal of controlled substances by non-registrants, it was 

necessary to conduct a comprehensive review of DEA policies and regulations related to each 

element of the disposal process, including the transfer, delivery, collection, destruction, return, 

and recall of controlled substances, by both registrants and non-registrants.
18

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

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

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

National Standards. Finally, DEA considered four options for reverse distributors: (1) On-site 

Requirement, (2) Prompt Requirement, (3) Fourteen Calendar Day Requirement, and (4) No 

Requirement. DEA performed a qualitative analysis of each of these alternatives and selected 

the “Multiple Collection” option for non-registrant disposal, the “Establish Consistent National 

Standard” option for registrant disposal, and the “Fourteen Calendar Day Requirement” option 

for reverse distributors. 

3.2 NON-REGISTRANT DISPOSAL

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

each of the alternatives, DEA selected the “Multiple Collection” option for the disposal of nonregistrant controlled substances.
19

3.2.1 Single Collection

DEA considered implementing the “Single Collection” option, which would permit nonregistrants to utilize only one method of collection to dispose of their lawfully possessed 

controlled substances. First, DEA considered permitting non-registrants to utilize only a mailback program to dispose of their lawfully possessed controlled substances, and not a collection 

receptacle or take-back events. Second, DEA considered permitting non-registrants to utilize 

only a collection receptacle to dispose of controlled substances. Finally, DEA considered 

maintaining the existing option for ultimate user disposal and permit non-registrants to utilize 

only take-back events to dispose of their controlled substances. 

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

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

safety. DEA believes that by proposing just one of the three disposal options, participation by 

various communities, ease and cost of program implementation, and public health and safety 

would not be maximized. With three disposal options, the possibility for greater participation is 

increased because more stakeholders have the opportunity to establish or operate a disposal 

program that reaches more members of the public. For example, the mail-back option is 

potentially more costly than the other options, but it has the possibility to reach members of the 

public, such as the elderly or rural communities, that might not have easy access to take-back 

events or collection receptacles. While take-back events may be the most secure collection 

method, because they are under the control and supervision of law enforcement, the cost of 

participation may be high for local law enforcement whose resources are already stretched. 

Finally, while collection receptacles strike a balance between convenience and safety, as 

mentioned above, such options might not be easily accessible or available to all members of the 
20

public, such as the elderly or rural communities. As a result, DEA does not believe that 

proposing just one or two disposal options would result in optimal public participation, cost 

effectiveness, or safety. 

3.2.2 Open Collection

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

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

disposal, regardless of their status as a DEA registrant. DEA believes that this option would not 

effectively protect the public health and safety or prevent the diversion of controlled substances 

consistent with the statutory framework of the CSA. 

Rather, DEA’s proposed regulations contain specific language to continue to allow law 

enforcement agencies and to authorize only certain registrants to collect controlled substances 

from ultimate users for the purpose of disposal. DEA proposes to authorize as collectors those 

persons already registered as manufacturers, distributors, reverse distributors, and retail 

pharmacies because, as registrants, these persons are accountable, have experience handling 

controlled substances, and are subject to controls related to their DEA registration. These preexisting controls protect against the diversion of controlled substances in the process of ultimate 

user collection. Further, DEA believes that ultimate user collection should occur only at DEA 

registered locations or the physical location of a law enforcement agency, and, under specified 

circumstances, at certain long term care facilities. DEA registered locations are subject to DEA 

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

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

substances. 
21

3.2.3 Multiple Collection (Selected Methodology)

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

following safe and convenient options for non-registrants to transfer controlled substances for

purposes of disposal: take-back events, mail-back programs, and collection receptacle locations. 

DEA is also proposing revised return and recall procedures for ultimate users, as discussed 

below. In the proposed rule, registered manufacturers, distributors, reverse distributors, and 

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

registrant authorized to receive a controlled substance for the purpose of disposal from nonregistrants in lawful possession of controlled substances. DEA is also proposing to continue to 

allow law enforcement agencies to voluntarily collect controlled substances from non-registrants 

for the purpose of disposal. 

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

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

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

responsible manner. The disposal options for non-registrants are intended to maximize cost 

efficiency, participation, and accessibility while simultaneously promoting the secure and 

responsible disposal of controlled substances in order to prevent diversion. 

3.3 REGISTRANT DISPOSAL

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

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

3.3.1 Retain Existing Regulations

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

have made no changes to the existing registrant disposal regulations (21 CFR 1307.12 and
22

1307.21). The procedures for the disposal of controlled substances by registrants are often

determined on a case-by-case basis by the DEA Special Agent in Charge (SAC) in the area 

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

how the registrant disposes of the controlled substance, including to whom the substances may 

be transferred or delivered. 21 CFR 1307.21(a) and (b). While this approach is effective, with 

the enactment of the Disposal Act and an increased need for the responsible disposal of 

controlled substances by registrants and non-registrants alike, DEA believes that in order to 

securely and effectively dispose of unwanted or unused controlled substances, consistent national 

standards on disposal are necessary. 

3.3.2 Establish Consistent National Standards (Selected Methodology)

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

option would delete existing regulations on the disposal of controlled substances (21 CFR 

1307.12 and 1307.21) and promulgate a new part 1317 that would incorporate similar 

requirements on proper disposal procedure, security, and recordkeeping for registrants and 

comprehensively outline the process and procedure for the disposal of controlled substances by 

registrants and non-registrants. DEA is proposing clear disposal procedures for all registrants 

that they can follow each time they dispose, regardless of geographic location. Such regulations 

will reduce the burden on registrants by eliminating the existing requirement for every registrant 

to contact the SAC in their area when they wish to destroy controlled substances. The 

procedures and security and recordkeeping requirements that DEA proposes are intended to 

codify existing practice and set singular and consistent procedures for DEA registrants in 

accordance with their authorized business activities while protecting the public health and safety 

and minimizing the risk of diversion. DEA is also proposing revised regulations for reverse 
23

distributors that are clear, consistent, and consolidated into one part. DEA believes that these 

proposed regulations will help reverse distributors comply with the CSA in a manner that 

effectively decreases the risk of diversion of controlled substances during the disposal process. 

3.4 REVERSE DISTRIBUTORS

DEA also considered several alternatives for the destruction of controlled substances by 

reverse distributors and selected the “Fourteen Calendar Day Requirement” option. Reverse 

distributors are a unique group of registrants whose primary function is to possess controlled 

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

valuable service to other registrants in the disposal process. In the distribution of controlled 

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

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

through existing reporting, recordkeeping, and order form requirements. 21 U.S.C. 827 – 828; 

21 CFR part 1304 and 21 CFR part 1305. However, a reverse distributor that acquires controlled 

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

before destruction so there is no recipient to verify that the substance has been destroyed. 

Furthermore, reverse distributors accumulate greater amounts of controlled substances that are 

destined for destruction in comparison to other registrants. This is because reverse distributors 

routinely acquire controlled substances for destruction from other registrants and may also be 

authorized as collectors under the proposed regulations. 

3.4.1 On-site Requirement

DEA considered the “On-site Requirement” option, which would require reverse 

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

risk of diversion is to minimize the transfer of controlled substances between various locations. 
24

DEA considered this option but rejected it because DEA wanted to maintain the flexibility of 

DEA’s current disposal policy that allows reverse distributors to use off-site destruction. Rather, 

DEA is proposing that all registrants that destroy a controlled substance must follow certain 

security procedures related to employees, transportation, loading and unloading, handling, and 

destruction. DEA is proposing enhanced security requirements for those registrants that choose 

to destroy controlled substances in order to strengthen the integrity of the destruction process, 

especially the use of off-site destruction. 

3.4.2 Prompt Requirement

DEA considered the “Prompt Requirement” option, which would require reverse 

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

destruction requirement is flexible and does not set a specific time frame for destruction to 

ensure that controlled substances destined for destruction do not accumulate and are destroyed in 

a timely manner, but still account for the individual circumstances of registrants that destroy 

controlled substances. DEA considered this option for reverse distributors and rejected it 

because the primary business activity of reverse distributors, unlike other registrants, is to 

acquire controlled substances for the purpose of destruction or return. As a result, reverse 

distributors generally accumulate greater amounts of controlled substances that are destined for 

destruction in comparison to other registrants. They are typically the last registrant to handle the 

controlled substance with no other registrant reporting and recording receipt of the substance as a 

check against diversion. 

3.4.3 No Requirement 

DEA considered the “No Requirement” option, which would retain the current 

destruction standard and would not put a timeline on when reverse distributors must destroy 
25

controlled substances acquired for destruction. DEA considered and rejected this option. DEA 

is proposing a comprehensive regulatory framework for the collection and destruction of 

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

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

controlled substances as soon as practicable but no later than fourteen calendar days of receipt 

and all other registrants will be required to destroy their lawfully possessed controlled substances 

promptly. DEA proposes destruction requirements because, just as there is a greater risk of 

diversion when controlled substances are being transported for the purposes of destruction, there 

is a greater risk of diversion the longer a substance destined for destruction remains in storage 

awaiting destruction. 

3.4.4 Fourteen Calendar Day Requirement

DEA considered and selected the “Fourteen Calendar Day Requirement” option, which 

would require reverse distributors to destroy controlled substances received for the purpose of 

destruction as soon as practicable but no later than fourteen calendar days of receipt. A reverse 

distributor that acquires a controlled substance for destruction is the last person to possess such 

substance before destruction and, therefore, must follow increased security measures. The 

“fourteen calendar day” requirement is unique to reverse distributors – other registrants that 

destroy must do so promptly and do not have to follow a specific time limit – because the 

primary business activity of reverse distributors, unlike other registrants, is to acquire controlled 

substances for the purpose of destruction or return. As a result, reverse distributors generally 

accumulate greater amounts of controlled substances that are destined for destruction in 

comparison to other registrants. They are typically the last registrant to handle the controlled 

substance with no other registrant reporting and recording receipt of the substance as a check 
26

against diversion. The “fourteen calendar day” requirement will ensure that reverse distributors 

destroy controlled substances in a timely manner while also enabling them sufficient time to 

prepare the necessary records required for destruction. 

CHAPTER 4: ANTICIPATED ECONOMIC IMPACT OF PROPOSED 

RULE

As discussed above, in accordance with Executive Order 12866 and 13563, an agency

must submit to OIRA a regulatory impact analysis for matters identified or determined by OIRA

to be a "significant regulatory action." DEA has concluded that this rule is not a “significant 

regulatory action” pursuant to Executive Orders 12866 and 13563. Specifically, DEA does not 

anticipate that this proposed rule will: (1) have an annual effect on the economy of $100 million 

or more, or (2) 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.

In addition, in accordance with the RFA, an agency is required to prepare and make 

available for public comment an initial regulatory flexibility analysis for any notice of proposed 

rulemaking that, if promulgated, will have a significant economic impact on a substantial number 

of small entities. DEA has concluded that this rule, if promulgated, will not have a significant 

economic impact on a substantial amount of small entities. 

4.1 REGISTRANT DISPOSAL

4.1.1 Impact on Registrants that Destroy Controlled Substances

In this rulemaking, DEA is proposing clear disposal procedures for all registrants that 

they must follow each time that they destroy controlled substances. Specifically, DEA is 

proposing to authorize registrants to dispose of controlled substances from the registrant’s own 
27

inventory in one of several ways, consistent with the type of business activity in which the 

registrant is engaged. DEA proposes to authorize non-practitioners to dispose of their controlled 

substance inventory in one of four ways: (1) promptly destroy the substance using an on-site 

method of destruction in accordance with applicable federal, state, tribal, and local laws and 

regulations; (2) promptly deliver the substance to a registered reverse distributor at its registered 

location by common or contract carrier, or by reverse distributor pick-up; (3) for the purpose of 

return or recall, promptly deliver the substance by common or contract carrier or pick-up at the 

registrant’s registered location to the person from whom it was obtained, the registered 

manufacturer of the substance, or another registrant authorized by the manufacturer to accept 

returns or recalls; or (4) promptly transport the substance by its own means to the registered 

location of a reverse distributor, the location of destruction, or the registered location of any 

person authorized to receive the substance for the purpose of return or recall. DEA proposes to 

authorize practitioner registrants to dispose of their controlled substance inventory in one of four 

ways: (1) promptly destroy the substance using an on-site method of destruction in accordance 

with applicable federal, state, tribal, and local laws and regulations; (2) promptly deliver the 

substance to a reverse distributor at its registered location by common or contract carrier, or by 

reverse distributor pick-up; (3) for the purpose of return or recall, promptly deliver the substance 

to the registered person from whom the substance was obtained, the registered manufacturer of 

the substance, or another registrant authorized to accept returns or recalls by common or contract 

carrier or by pick-up at the registrant’s registered location; or (4) request assistance from the 

Special Agent in Charge of the Administration in the area in which the practitioner is located. 

Reverse distributors that receive controlled substances for the purpose of destruction 

must destroy those substances as soon as practicable but no later than fourteen calendar days of 
28

pick-up or delivery. For all registrants that destroy controlled substances or cause controlled 

substances to be destroyed (e.g., by transferring the substance to an authorized reverse distributor 

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

proposing that such registrants be required to follow certain security procedures related to 

employees, transportation, loading and unloading, handling, and destruction. Additionally, a 

registrant that destroys a controlled substance or causes controlled substances to be destroyed is 

required to maintain a record of that destruction in a form issued by DEA – Form 41. DEA is 

proposing to modify DEA Form 41 to act as the record of destruction, including the signature of 

the two authorized employees that witnessed the destruction. 

DEA anticipates that such proposed disposal procedures will have minimal to no

economic impact on registrants that dispose of their controlled substances. Based on DEA’s 

field experience and information provided at or in response to the January 19-20, 2011 public 

meeting, DEA believes the proposed regulation clarifies registrant disposal procedures and 

standardizes general practices that already meet the requirements contained in the proposed rule. 

The existing procedures for the disposal of controlled substances by registrants are often 

determined on a case-by-case basis by the SAC in the area where the registrant is located. In 

certain circumstances, the SAC has the discretion to determine how to authorize and instruct 

registrants to dispose of controlled substances, including how the substances may be destroyed. 

21 CFR 1307.21(a) and (b). DEA is proposing these changes to ensure consistency in disposal 

procedures among registrant categories, regardless of geographic location. Such regulations will 

reduce the burden on registrants by eliminating the existing requirement for every registrant to 

contact the SAC in their area when they wish to destroy controlled substances. Also, the 

procedures and security and recordkeeping requirements that DEA proposes are intended to set 
29

clear and consistent procedures for DEA registrants each time they wish to destroy a controlled 

substance, while protecting the public health and safety and minimizing the risk of diversion. 

4.1.2 Impact on Reverse Distributors

DEA is proposing revised regulations for reverse distributors that are clear, consistent, 

and consolidated into one part. These new regulations address reverse distributor registration 

requirements and authorized activities and propose to codify many existing practices. In such 

instances, the codification of existing practices does not impose additional costs above the 

established baseline costs that exist without the proposed rule. DEA believes that these proposed 

regulations will help reverse distributors comply with the CSA in a manner that effectively 

decreases the risk of diversion of controlled substances during the disposal process. 

Security Requirements

DEA is proposing enhanced employee security requirements for reverse distributors. 

DEA is proposing that reverse distributors be prohibited from employing, as an agent or 

employee who has access to controlled substances, any person that has ever been convicted of 

any felony offense related to controlled substances or has ever had an application for registration 

with DEA denied, had a DEA registration revoked or suspended, or surrendered a DEA 

registration for cause. DEA is proposing these enhanced security requirements for reverse 

distributors in order to strengthen the integrity of the disposal process by ensuring that only 

certain employees are authorized to have access to or influence over controlled substances. This 

requirement is similar to existing employee security requirements for registered practitioners, 

where there is also a high risk of diversion. 
30

Analysis of available information regarding reverse distributors4indicates that many 

companies already conduct background checks on their employees, and this requirement is a 

codification of current business practices. Therefore, DEA estimates that the proposed security 

requirements for reverse distributors imposes minimal or no additional cost above the established 

baseline cost associated with security requirements. DEA registrants have an existing

responsibility, by statute and regulation, to maintain effective controls against diversion, 

including procedures to guard against theft and diversion. 21 U.S.C. 823 and 21 CFR 1301.71. 

To ensure that necessary controls against diversion are in place and to fulfill their regulatory 

responsibilities, it is likely that registrants already conduct background checks on their 

employees. DEA believes that this proposed provision of the rule is a codification of current 

general business practices. Therefore, DEA estimates that, because registered reverse 

distributors are likely to already conduct these practices, there should be minimal to no5

economic impact on reverse distributors. 

Finally, DEA is proposing to specify a maximum time limit for reverse distributors to 

destroy or cause the destruction of any controlled substance received for the purpose of 

destruction as soon as practicable but no later than fourteen calendar days of receipt (pick-up or 

delivery). While DEA believes that the majority of reverse distributors already destroy or cause 

the destruction of controlled substances received for the purpose of destruction as soon as 

practicable but no later than fourteen calendar days of receipt, DEA recognizes that some may 

 

4

Research conducted through interviews with Diversion Investigators and analysis of reverse distributor websites.

5

Based on publically available information, the cost of a background check on an employee can cost $30-$80. If a 

reverse distributor needs to conduct several more background checks as a result of this proposed rule the cost of the 

background check is expected to not have significant impact on its financial performance.
31

not.

6

 For the reverse distributors that do not currently meet this standard, this requirement may 

cause them to incur additional costs through more frequent transportation of controlled 

substances to the point of destruction and destruction of partial loads. For purposes of this 

proposal, DEA assumes that some reverse distributors may have to adjust current business 

operations in order to comply with this new requirements, such as by restricting the receipt of 

deliveries to their registered location to specific days and/or amounts, or by modifying pick-up 

routes to accommodate the requirement that any controlled substance received for the purpose of 

destruction be destroyed as soon as practicable but no later than fourteen calendar days of 

receipt. Although this may cause modifications to current business operations, DEA believes 

reverse distributors are able to control the flow of controlled substances they receive through 

minor modifications with minimal to no cost.

Recordkeeping Requirements

DEA is also proposing to streamline and clarify recordkeeping requirements for 

registered reverse distributors so that they are consistent and accurately reflect reverse distributor 

authorized activities in compliance with the CSA. First, the existing regulations require 

registered reverse distributors to record in inventory, information regarding quantities of 

controlled substances that is different from the information required in continuing records. 21 

CFR 1304.11(e)(3) and 1304.22(e). To reconcile this discrepancy, DEA is proposing that in both 

inventory and continuing records, a reverse distributor must record the quantity of a controlled 

substance in both finished and bulk form, and the quantity contained in a commercial container, 

carton, crate, drum, or other receptacle that has been opened.

Second, DEA is proposing to require registered reverse distributors to: (1) keep records 

 

6

Based on interviews with Diversion Investigators, DEA determined that the business practices of reverse 

distributors vary greatly. 
32

regarding each controlled substance received from another registrant for the purpose of return to 

a manufacturer or, if designated, to another registrant authorized by the manufacturer to accept 

returns on the manufacturer’s behalf, and (2) keep records regarding each controlled substance 

destroyed, including information pertaining to the receipt and destruction of the controlled 

substance. DEA proposes that for all controlled substance records, reverse distributors will be 

required to maintain the record of receipt with the corresponding record of return or destruction.

In accordance with the CSA, every DEA registrant must maintain, on a current basis, a 

complete and accurate record of each controlled substance manufactured, received, sold, 

delivered, or otherwise disposed of. 21 U.S.C. 827(a). These records must be maintained 

separately from all other records of the registrant or, alternatively, in the case of non-narcotic 

controlled substances, be in such a form that required information is readily retrievable from the 

ordinary business records of the registrant. 21 U.S.C. 827(b)(2). The records must be kept and 

be available for at least two years for inspection and copying by officers or employees of the 

Attorney General. 21 U.S.C. 827(b)(3). To fulfill their regulatory responsibilities, DEA 

assumes for the purpose of this analysis, that registrants already maintain records of receipt for a 

controlled substance with the corresponding records of return or destruction for that controlled 

substance. DEA estimates that it is an existing business practice to maintain records in this 

manner and most registrants are likely already conducting these activities. Therefore, DEA 

estimates that the proposed record keeping requirements for reverse distributors imposes no

additional economic impact above their existing baseline costs associated with recordkeeping 

requirements.

DEA is also proposing that reverse distributors report acquisition/distribution transactions 

pursuant to 21 CFR 1304.33 and that each person registered to reverse distribute controlled 
33

substances in Schedules I and II comply with 21 CFR 1305. As these are existing requirements 

clarified in the proposed rule, rather than new requirements, no additional economic impact will 

be imposed on reverse distributors. 

4.2 NON-REGISTRANT DISPOSAL

The proposed provisions that facilitate Non-Registrant Disposal are completely voluntary, 

not mandated. Any collector, reverse distributor, distributor, or law enforcement agency (further 

discussed in Sections 4.2.1, 4.2.2, and 4.2.3) that chooses to engage in the voluntary activities 

described in this section, does so based on its own evaluation of costs and benefits (tangible and 

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

the activities to facilitate Non-Registrant Disposal only if there is a net zero or positive benefit to 

the entity. Additionally, any collector, reverse distributor, distributor, or law enforcement 

agency that chooses to engage in these voluntary activities can decide to cease these activities at 

any time. Therefore, for the purposes of the EIA, DEA estimates that the voluntary provisions in 

this section have a net zero economic impact on the regulated entities. Specifics are further 

discussed in the sub-sections.

4.2.1 Impact on Collectors

To implement the Disposal Act, DEA is proposing to provide ultimate users, persons 

lawfully entitled to dispose of ultimate user decedent’s property, and, in some circumstances, 

long term care facilities the following safe and convenient options to transfer controlled 

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

receptacle locations. In the proposed rule, registered manufacturers, distributors, reverse 

distributors, and retail pharmacies may obtain authorization from DEA to be a collector. A 

collector is a registrant authorized by DEA to receive a controlled substance for the purpose of 
34

disposal by destruction from an ultimate user or other authorized non-registrant person in lawful 

possession of the controlled substance. These proposed options are voluntary and no person will 

be required to establish or operate a disposal program. 

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

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

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

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

maintain a collection receptacle or mail-back program. 

DEA has no baseline to determine the level of registrant interest in modifying their 

registration to be a collector. However, as described above, a registrant is expected to become a 

collector only if there is a net zero or a net benefit derived from performing these activities; in 

other words, if the sum of the tangible and intangible benefits outweigh the costs. For example, 

a pharmacy may derive tangible benefits, such as additional revenue from increased retail traffic 

to the pharmacy. Collectors may also derive intangible benefits such as public safety and good 

will from its collection activities. As a conservative estimate, these optional activities are 

deemed to have a net zero economic impact for the purposes of conducting an economic impact 

analysis.

4.2.2 Impact on Reverse Distributors and Distributors

This proposed rule would allow reverse distributors to acquire for the purpose of 

destruction controlled substances that have been collected by: (1) law enforcement agencies

through take-back events, mail-back programs, and collection receptacles, and (2) authorized 

collectors through collection receptacles. DEA is also proposing to authorize registered 

distributors, in addition to registered reverse distributors, to acquire for purposes of destruction 
35

controlled substances collected through a collection receptacle at the collector’s authorized 

location. This is a voluntary activity. DEA assumes that a reverse distributor or distributor will 

only perform this activity if there is a net zero or positive benefit derived from performing these 

activities. DEA believes that reverse distributors and distributors may receive payment from law 

enforcement agencies, authorized collectors, or their partners for activities described. As a 

conservative estimate, these optional activities are deemed to have a net zero economic impact 

for the purposes of conducting an economic impact analysis.

4.2.3 Impact on Law Enforcement Agencies

DEA is proposing specific language to continue to allow federal, state, local, and tribal

law enforcement agencies to collect controlled substances from ultimate users and persons 

lawfully entitled to dispose of an ultimate user decedent’s property through: (1) take-back 

events, (2) mail-back programs, and (3) collection receptacles located at the law enforcement 

agency’s physical address. As described above, these options are voluntary and impose no 

additional requirements on law enforcement agencies, unless they choose to participate. There 

are some specific requirements that law enforcement agencies must follow if they choose to 

participate in a take-back event, conduct a mail-back program, or maintain a collection 

receptacle, but most of the provisions in the proposed rule are recommendations for law 

enforcement agencies, not requirements. For the purposes of the EIA, DEA assumes that a law 

enforcement agency will not choose to conduct these activities unless its evaluation of the costs 

and benefits showed a net zero or positive benefit. Benefits for a law enforcement agency are 

generally intangible benefits such as public safety, reduction in crime, reduction in drug 

availability, etc. As a conservative estimate, these optional activities are deemed to have a net 

zero economic impact for the purposes of conducting an economic impact analysis.
36

4.3 RETURN AND RECALL

DEA is proposing to delete the existing rule on return and recall, 21 CFR 1307.12, and to 

clarify and separate the role of registrants and non-registrants in the return and recall of 

controlled substances. The proposed rule on return and recall for registrants is similar to the 

existing rule on return and recall, 21 CFR 1307.12. The proposed new sections, however, clarify

which registrants are authorized to transfer and receive returns and recalls, in addition to 

clarifying recordkeeping and order form requirements. In accordance with the CSA, every DEA 

registrant must maintain, on a current basis, a complete and accurate record of each controlled 

substance manufactured, received, sold, delivered, or otherwise disposed of. 21 U.S.C. 827(a). 

To fulfill their regulatory responsibilities, DEA believes that it is likely that registrants already 

maintain a detailed record of controlled substances returned or controlled substances received for 

the purpose of return or recall. DEA also believes that this proposed provision of the rule is a 

codification of good business practice – e.g., manufacturers keep detailed business records of 

what is coming into and out of their business and for what purpose. DEA estimates that, because 

most compliant registrants are likely already maintaining these detailed records, there should be 

no additional material economic impact on reverse distributors as a result of the proposed rule.

DEA is also proposing a new rule on the recall of controlled substances for ultimate 

users. The proposed rule authorizes an ultimate user in lawful possession of a controlled 

substance in Schedules II, III, IV, or V to deliver the recalled controlled substance to the 

manufacturer or another registrant authorized by the manufacturer to accept returns or recalls on 

the manufacturer’s behalf. The existing language of 21 CFR 1307.12 is broad and the proposed 

rule reduces ambiguity that exists under current regulations by specifying to whom an ultimate 

user is permitted to deliver their recalled controlled substance and by outlining consistent and 
37

clear requirements for registrants authorized to receive those recalled substances from ultimate 

users.

DEA is proposing that a registered manufacturer or another registrant authorized by the 

manufacturer to accept returns or recalls on the manufacturer’s behalf maintain a record of each 

recalled controlled substance received from ultimate users. In contrast to existing regulations (21 

CFR 1307.12), DEA is proposing that those registrants be exempt from the requirements in 21 

CFR 1305 pertaining to DEA Form 222. Consistent with existing regulations (21 CFR 1307.12), 

DEA is also proposing that the registered manufacturer or another registrant authorized by the 

manufacturer to accept returns or recalls on the manufacturer’s behalf report all recalled 

controlled substance acquisition transactions pursuant to 21 CFR 1304.33. Such registrants may 

report either each individual receipt or a single transaction that includes all recalled controlled 

substances of the same name and finished form (e.g., all 10-milligram tablets or all 5-milligram 

concentration per fluid ounce or milliliter) received from ultimate users.

DEA anticipates that the new return and recall requirements proposed in this rule will not 

economically impact registrants. With the promulgation of the new 21 CFR 1317.85, DEA 

expects that manufacturers will use the same mechanisms for the recall process that are currently 

in place. DEA believes that registrants currently maintain detailed records of these transactions 

as a matter of normal business practice and to fulfill their regulatory responsibilities pertaining to 

current regulations. As a result, DEA anticipates that the new requirements pose no economic 

impact to registrants, including manufacturers to which 1317.85 applies.

4.4 DESTRUCTION

DEA is proposing a standard of destruction – non-retrievable – for persons that destroy

or cause the destruction of controlled substances. DEA is not requiring particular methods of 
38

destruction so long as the desired result is achieved and the method is compliant with all 

applicable federal, state, tribal, and local laws and regulations. This standard is intended to allow 

public and private entities to develop a variety of destruction methods that are secure, 

convenient, and responsible, consistent with preventing the diversion of such substances. DEA 

is proposing a standard of destruction that provides communities the flexibility to tailor disposal 

options to meet their resources and needs and to allow for advances in technology. 

Generally, the current standard for rendering controlled substances non-retrievable is 

incineration. This is based on DEA’s experience with National Take Back Days and DEA field 

experience with registrants that destroy controlled substances. As this is the current method, no 

additional costs are imposed on registrants. As appropriate, DEA has made the determination on 

a case-by-case basis, particularly in manufacturing, that a controlled substance was altered in 

such a way that it was no longer controlled. However, DEA has not and is not able to generally 

approve alternate methods of destruction for controlled substances. The fact that DEA is not 

imposing specific destruction methods, but instead allowing for greater flexibility and innovation 

by applying a standard of non-retrievable may lead to alternative destruction methods at a 

reduced cost. However, at this time, DEA cannot quantify potential savings for alternate 

methods for the destruction of controlled substances under the non-retrievable standard as they 

have not been determined or are not currently used by registrants. 

4.5 ANNUAL ECONOMIC EFFECT ON THE ECONOMY 

DEA does not anticipate that this rulemaking will 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.
39

As discussed in Section 4.1 above, DEA anticipates that this rulemaking will have 

minimal or no economic impact on registrants that destroy controlled substances themselves and 

that modified DEA Form 41 could result in some level of cost savings. In addition, DEA

anticipates that the security and recordkeeping requirements contained in the proposed rule will 

result in minimal or no costs for reverse distributors. 

Moreover, DEA conservatively estimates that the voluntary provisions for collectors, 

reverse distributors, distributors, and law enforcement agencies will have a net zero economic 

impact. The proposed provisions that facilitate Non-Registrant Disposal are completely 

voluntary, not mandated. Any collector, reverse distributor, distributor, or law enforcement 

agency may choose to engage in the voluntary activities based on its own evaluation of costs and 

benefits (tangible and intangible). For the purposes of the EIA, DEA assumes that an entity will 

volunteer to perform the activities to facilitate Non-Registrant Disposal only if there is a net zero 

or positive benefit to the entity. Additionally, any collector, reverse distributor, distributor, or 

law enforcement agency that chooses to engage in these voluntary activities can decide to cease 

these activities at any time. Therefore, for the purposes of the EIA, DEA estimates that the 

voluntary provisions in this section have net zero economic impact on the regulated entities.

In summary, DEA estimates the proposed rule will impose minimal to no annual cost. 

Accordingly, DEA believes this rulemaking will not 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. 
40

4.6 IMPACT ON SMALL ENTITIES

DEA has evaluated the impact of this rule on the regulated entities by size category and has 

determined that this rule will not have a significant economic impact on a substantial number of 

small entities. In order to assess whether or not the proposed rule will have significant effect on 

substantial number of small entities, DEA first estimated the number of small businesses affected 

by the proposed rule, second determined the number of small businesses that are significantly 

affected, and finally determined whether the number of small businesses significantly affected 

constitute a substantial number of small businesses. As discussed in Section 2.2, approximately 

371,485 small businesses may be affected by this proposed rule. DEA has concluded that the 

proposed rule will not have a significant effect on a substantial number of small entities.

CHAPTER 5: COST-BENEFIT ANALYSIS OF PROPOSED

REGULATORY ACTION

In drafting this proposed rule, DEA assessed the costs and benefits and decided to 

propose the rule only after a reasoned determination that the benefits justify the cost in 

accordance with Executive Orders 12866 and 13563. 

5.1 COSTS OF THE PROPOSED RULE

As discussed above, DEA anticipates this rulemaking will have minimal to no cost 

impact on affected businesses. 

5.2 BENEFITS OF THE PROPOSED RULE

The citizens and residents of the United States bear an enormous cost from the diversion 

of controlled substances into the illicit market, not only monetarily but also in public health and 

safety. 
41

5.2.1 Prescription Drug Abuse Epidemic

Before the Disposal Act, the CSA did not address the disposal of controlled substances 

by ultimate users. To dispose of their controlled substances, ultimate users were permitted to 

destroy the substances themselves (e.g., mix the substances with coffee grounds, place in a 

plastic bag, and throw into the garbage or flush) or surrender the substances to law enforcement 

or DEA. There is concern, however, that throwing controlled substances into the garbage or 

flushing them could be harmful to the environment. Because the public has limited options for 

disposal, outdated and unwanted controlled substances often accumulate in medicine cabinets, 

easily within reach of children and teenagers. In passing the Disposal Act, Congress recognized 

that the secure disposal of controlled substances is important because of the significant 

prescription drug abuse problem in the United States. The Centers for Disease Control and 

Prevention declared prescription drug overdoses an epidemic.7

The availability of outdated or unwanted prescription drugs is problematic because there 

is a concern that young people may perceive prescription and/or over-the-counter drugs as 

“safer” than illegal drugs because of their intended, legitimate medical use.8This misperception 

may be shared by parents. Over 20 percent of parents believe that it is acceptable to give a teen a 

prescription drug that was not prescribed to them.9 The 2010 National Survey on Drug Use and 

Health (NSDUH)

10 indicates that over 70 percent of Americans twelve and older who used pain 

 

7

Centers for Disease Control and Prevention, “Morbidity and Mortality Weekly Report,” Vol. 61, No. 1, at 10 

(January 13, 2012). 

8

Partnership for a Drug-Free America and MetLife Foundation, “2009 Parents and Teens Attitude Tracking Study 

Report,” March 2, 2010.

9

Partnership for a Drug-Free America and MetLife Foundation, “2010 Partnership Attitude Tracking Study,” April 

6, 2011.

10 The National Survey on Drug Use and Health (NSDUH) is an annual survey of the civilian, non-institutionalized, 

population of the United States aged twelve or older. The survey is conducted by the Department of Health and 
42

relievers non-medically in the previous year obtained the drugs from a friend or relative.11 

Another study found that more than 50 percent of teens obtained prescription drugs from their 

own family’s medicine cabinet.12

The prevalence of controlled substance prescription drug abuse among teenagers is right 

behind their abuse of marijuana (to include organic marijuana and synthetic cannabinoids). The 

2011 “Monitoring the Future” survey of teenagers found that 8.1 percent of high school seniors 

reported non-medical use of Vicodin (a brand name for Schedule III hydrocodone combination 

products) in the past year, and 4.9 percent reported non-medical use of OxyContin (a brand 

name for Schedule II oxycodone sustained release products) in the past year.

13

 This is consistent 

with reports by high school students of increased non-medical use of painkillers in the past five 

years.

14

 According to a 2009 survey by the Partnership at Drugfree.org, more than 50 percent of 

teenagers (grades 9-12) believe that prescription drugs are easier to obtain than illegal drugs.

The abuse of prescription drugs is the fastest growing drug problem in the United States. 

Findings from the 2010 NSDUH estimate that 7.0 million persons aged twelve or older used 

prescription-type psychotherapeutic drugs – pain relievers, anti-anxiety medications, stimulants, 

and sedatives – non-medically in the previous month.15 This represents 2.7 percent of the U.S. 

 

Human Services Office of Applied Studies, Substance Abuse and Mental Health Services Administration 

(SAMHSA).

11 Substance Abuse and Mental Health Services Administration, “Results from the 2010 National Survey on Drug 

Use and Health: Volume I, Summary of National Findings,” Office of Applied Studies, 2011 (NSDUH Series H-41, 

HHS Publication No. SMA 11-4658), http://www.oas.samhsa.gov/NSDUH/2k10NSDUH/2k10Results.pdf.

12 Partnership for a Drug-Free America and MetLife Foundation, “2010 Partnership Attitude Tracking Study,” April 

6, 2011.

13 Lloyd D. Johnson, Ph.D., et al, “Monitoring the Future National Results on Adolescent Drug Use: Overview of 

Key Findings, 2011,” Institute for Social Research, The University of Michigan, 2012.

14 Lloyd D. Johnston, Ph.D., et al, “Monitoring the Future National Results on Adolescent Drug Use: Overview of 

Key Findings, 2009,” National Institute of Drug Abuse, 2010 (NIH Publication No. 10-7583).

15 Substance Abuse and Mental Health Services Administration, “Results from the 2010 National Survey on Drug 

Use and Health: Volume I, Summary of National Findings,” Office of Applied Studies, 2011 (NSDUH Series H-41, 

HHS Publication No. SMA 11-4658), http://www.oas.samhsa.gov/NSDUH/2k10NSDUH/2k10Results.pdf.
43

population.16 In 2010, 2.0 million persons aged twelve or older used pain relievers nonmedically for the first time.17

 On average, every day 2,046 12- to 17-year-olds abuse a 

prescription pain reliever for the first time.18 

Non-medical drug use, particularly among young adults, is having a devastating effect on 

the United States. According to the Centers for Disease Control and Prevention, poisoning 

deaths, which include drug overdoses such as those from prescription drugs, are the leading 

cause of injury death in the United States; nearly nine out of ten poisoning deaths are caused by 

drugs and more than 40% of those involve opioid analgesics.

19

 According to SAMHSA’s latest 

Drug Abuse Warning Network (DAWN) data, of the 4.6 million emergency department visits in 

2009 associated with drug use, about 1.2 million visits involved the non-medical use of 

pharmaceuticals.20 Emergency department visits involving non-medical use of pharmaceuticals 

(misuse or abuse) almost doubled between 2004 and 2009 from 627,291 in 2004 to 1,244,679 

visits in 2009 (a 98.4 percent increase).21 About half of the 2009 emergency department visits 

related to misuse or abuse of pharmaceuticals involved painkillers and more than one-third 

involved drugs to treat insomnia and anxiety.22

5.2.2 Monetary Costs of Prescription Drug Abuse

To capture the benefits of the proposed rule, DEA estimated the baseline cost of 

diversion to the citizens and residents of the United States without implementation of the 

 

16 These estimates were similar to those from the 2009 survey but 13 percent higher than those from the 2008 

survey.

17 Id.

18 Substance Abuse and Mental Health Services Administration, 2010 National Survey on Drug Use and Health. 

19 U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for 

Injury Prevention and Control, “Drug Poisoning Deaths in the United States, 1980-2008,” December 2011. 

20 Behavioral Health Statistics and Quality, “Highlights of the 2009 Drug Abuse Warning Network (DAWN) 

Findings on Drug-Related Emergency Department Visits,” The DAWN Report, December 28, 2010.

21 Id. at 4.

22 Id. at 3.
44

proposed rule. DEA used “Economic Costs of Nonmedical Use of Prescription Opioids”23 and 

“Estimated Costs of Prescription Opioid Analgesic Abuse in the United States in 2001”24 as 

primary sources for obtaining estimated costs to the citizens and residents of the U.S. associated 

with the diversion of controlled substances into the illicit market. While opioids discussed in the 

publications represent a subset of all controlled substances regulated by DEA, the cost estimates 

in the publications represent a conservative estimated cost of the diversion of all controlled 

substances from a reputable source.

The authors of the primary sources relied upon by DEA gathered data from numerous 

sources including: emergency department information from the Drug Abuse Warning Network 

(DAWN), nonmedical use of prescription opioids information from the National Survey on Drug 

Use and Health (NSDUH), substance abuse treatment information from the Treatment Episode 

Data Sets (TEDS), statistical information from the U.S. Department of Justice Bureau of Justice 

Statistics, Federal Bureau of Investigation, National Forensic Laboratory, and Drug Enforcement 

Administration budget documents. Data related to the total cost of treatment for the abuse of 

prescription opioids also included input from the Substance Abuse and Mental Health Services 

Administration at the U.S. Department of Health and Human Services. 

According to the research published in The Clinical Journal of Pain, estimated costs 

associated with the nonmedical use of prescription opioids increased from $8.6 billion in 2001 to 

$53.4 billion in 2006.

Table 3: U.S. Costs of Nonmedical Use of Prescription Opioids 2001 and 2006

($ million) 2001 2006

% 

Increase

 

23 Clin J Pain (The Clinical Journal of Pain), Volume 27, Number 3, March/April 2011.

24 Clin J Pain (The Clinical Journal of Pain), Volume 22, Number 8, October 2006.
45

Total Cost $ 8,600 $ 53,400 521%

Health Care $ 2,600 $ 3,200 23%

Criminal Justice $ 1,400 $ 8,200 486%

Workplace & Lost 

Productivity $ 4,600 $ 42,000 813%

The baseline cost of diversion to the citizens and residents of the United States is the 

estimated cost in 2012 without the proposed rule. The increase from $8.6 billion in 2001 to 

$53.4 billion in 2006 represents a compound annual growth rate (CAGR) of 44 percent. 

Although it is difficult to project that the cost will continue to grow at this rate and nearly 

impossible to accurately estimate the baseline cost, it would not be an exaggeration to say that 

the cost of nonmedical use of prescription opioids to the U.S. public is enormous and 

accelerating.

Although applying the 44 percent CAGR results in an estimated cost of nonmedical use 

of prescription opioids of $477.7 billion in 2012, DEA conservatively estimates, for the purposes 

of the EIA, that the cost to the citizens and residents of the United States is greater than $53.4 

billion.

5.3 EVALUATION OF THE COSTS AND BENEFITS OF THE PROPOSED RULE

(THRESHOLD ANALYSIS)

In evaluating the costs and benefits of the rule, the annual cost of the rule is compared 

with the anticipated reduction in the growth rate of costs associated with diversion of controlled 

substances and listed chemicals into the illicit market. The cost-benefit analysis uses the costs 

associated with the nonmedical use of prescription opioids, $8.6 billion in 2001 and $53.4 billion 

in 2006. These are conservative estimates of the rapidly growing total cost associated with 

diversion of controlled substances and listed chemicals into the illicit market.
46

It is preferable to conduct a discounted cash flow analysis where the costs and benefits 

are quantified and the net benefits are calculated and presented in present dollar value. However, 

the baseline costs associated with diversion of controlled substances and listed chemicals into the 

illicit market is unreliable. Therefore, a quantitative analysis is not possible and a threshold 

analysis is utilized.

The threshold analysis considers whether the benefits of the rule are greater than or equal 

to the cost of the rule.

As discussed above, the proposed rule poses minimal to no economic impact.

The benefits of the rule are represented as the difference between the costs associated 

with diversion of controlled substances and listed chemicals into the illicit market at the baseline 

and the costs associated with the diversion of controlled substances and listed chemicals into the 

illicit market under the rule.

?

Benefits of Rule $0
47

As DEA has determined this rule poses minimal to no economic impact, DEA concludes 

that this rule reduces the growth in the cost of the diversion of controlled substances and listed 

chemicals into the illicit market, therefore, this rule will have a positive benefit for the health and 

safety of the citizens and residents of the United States.

CHAPTER 6: CERTIFICATION STATEMENTS

6.1 EXECUTIVE ORDERS 12866 AND 13563

The analysis in this document indicates that this rule is not a significant regulatory action 

pursuant to Executive Order 12866 as supplemented and affirmed by Executive Order 13563. In 

particular, this proposed rule is not likely to:

1. Result in an annual effect on the economy of $100 million or more; or

2. 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.

6.2 REGULATORY FLEXIBILITY ACT

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

anticipates that this rule will not have a significant economic impact on a substantial number of 

small entities. As discussed in Section 2.2, approximately 371,485 small businesses are affected 

by this proposed rule. Additionally, as discussed in Sections 4.5 and 4.6, DEA estimates no 

total cost to the economy. The proposed rule will impose minimal to no annual cost. 

?

$0

Cost Associated 

with Diversion to 

illicit market 

(rule)

-

Cost Associated 

with Diversion to 

illicit market 

(baseline)
48

Accordingly, DEA analysis, assessing economic impact by size category, indicates that the 

proposed rule will not have a significant effect on a substantial number of these small business 

entities.