Document ID: EPA-HQ-OAR-2006-0159-0061
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2007-06-12T04:00Z

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA-HQ-OAR-2006-0159; FRL-]

RIN 2060-AN81

Protection of Stratospheric Ozone:  Allocation of Essential Use
Allowances for Calendar Year 2007.

AGENCY:	Environmental Protection Agency (EPA).

ACTION:	Final rule.

SUMMARY:  With this action, EPA is allocating essential use allowances
for import and production of Class I stratospheric ozone-depleting
substances (ODSs) for calendar year 2007.  Essential use allowances
enable a person to obtain controlled Class I ODSs as part of an
exemption to the regulatory ban on the production and import of these
chemicals which became effective as of January 1, 1996.  EPA allocates
essential use allowances for exempted production or import of a specific
quantity of Class I ODSs solely for the designated essential purpose. 
The allocations in this action total 167.0 metric tons (MT) of
chlorofluorocarbons (CFCs) for use in metered dose inhalers (MDIs) for
2007.

DATES:  This final rule is effective [insert date of publication].

ADDRESSES:    EPA has established a docket for this action under Docket
ID No. EPA-HQ-OAR-2006-0159.  All documents in the docket are listed on
the www.regulations.gov web site.  Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute.  Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form.  Publicly available docket
materials are available either electronically through
www.regulations.gov or in hard copy at the Air Docket, EPA/DC, EPA West,
Room B102, 1301 Constitution Ave., NW, Washington, DC.   This Docket
Facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday,
excluding legal holidays.  The Public Reading Room is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays.  The
telephone number for the Public Reading Room is (202) 566-1744, and the
telephone number for the Air Docket is (202) 566-1742. 

FOR FURTHER INFORMATION CONTACT:  Kirsten Cappel, by regular mail: U.S.
Environmental Protection Agency, Stratospheric Protection Division
(6205J), 1200 Pennsylvania Ave., N.W., Washington, D.C. 20460;  by
courier service or overnight express: 1310 L Street, N.W., Room 1047C,
Washington, D.C. 20005;  by telephone: (202) 343-9556;  by fax: (202)
343-2338;  or by e-mail: cappel.kirsten@epa.gov. 

SUPPLEMENTARY INFORMATION

Table of Contents

Basis for Allocating Essential Use Allowances

What are essential use allowances?

Under what authority does EPA allocate essential use allowances?

What is the process for allocating essential use allowances?

What quantity of essential use allowances is EPA allocating? 

Response to Comments

Proposed level of allocations

Consideration of stocks of CFCs in the allocation of essential use
allowances

Number of months of safety stockpile

Rulemaking process and timing

The transition to non-CFC MDIs

Allocation of Essential Use Allowances for Calendar Year 2007

Statutory and Executive Order Reviews

Executive Order 12866:  Regulatory Planning and Review

Paperwork Reduction Act

Regulatory Flexibility 

Unfunded Mandates Reform Act

Executive Order 13132:  Federalism

Executive Order 13175:  Consultation and Coordination with Indian Tribal
Governments

Executive Order 13045:  Protection of Children from Environmental Health
Risks and Safety Risks

Executive Order 13211:  Actions that Significantly Affect Energy Supply,
Distribution, or Use

National Technology Transfer and Advancement Act

Congressional Review Act

V.	Judicial Review

VI. 	Effective Date of this Final Rule

I.	Basis for Allocating Essential Use Allowances

A.  What are essential use allowances?

	Essential use allowances are allowances to produce or import certain
ODSs in the U.S. for purposes that have been deemed “essential” by
the U.S. Government and by the Parties to the Montreal Protocol on
Substances that Deplete the Ozone Layer (Montreal Protocol).  

	The Montreal Protocol is an international agreement aimed at reducing
and eliminating the production and consumption of ODSs.  The elimination
of production and consumption of Class I ODSs is accomplished through
adherence to phase-out schedules for specific class I ODSs, which
include CFCs, halons, carbon tetrachloride, and methyl chloroform.  As
of January 1, 1996, production and import of most Class I ODSs were
phased out in developed countries, including the United States.

	However, the Montreal Protocol and the Clean Air Act (the Act) provide
exemptions that allow for the continued import and/or production of
Class I ODSs for specific uses.  Under the Montreal Protocol, exemptions
may be granted for uses that are determined by the Parties to be
"essential."  Decision IV/25, taken by the Parties to the Protocol in
1992, established criteria for determining whether a specific use should
be approved as essential, and set forth the international process for
making determinations of essentiality.  The criteria for an essential
use, as set forth in paragraph 1 of Decision IV/25, are the following:

	"(a) that a use of a controlled substance should qualify as
‘essential’ only if:

	(i) it is necessary for the health, safety or is critical for the
functioning of society (encompassing cultural and intellectual aspects);
and

	(ii) there are no available technically and economically feasible
alternatives or substitutes that are acceptable from the standpoint of
environment and health;

	(b) that production and consumption, if any, of a controlled substance
for essential uses should be permitted only if:

	(i) all economically feasible steps have been taken to minimize the
essential use and any associated emission of the controlled substance;
and

	(ii) the controlled substance is not available in sufficient quantity
and quality from existing stocks of banked or recycled controlled
substances, also bearing in mind the developing countries’ need for
controlled substances."

B.  Under what authority does EPA allocate essential use allowances?

	Title VI of the Act implements the Montreal Protocol for the United
States.  Section 604(d) of the Act authorizes EPA to allow the
production of limited quantities of Class I ODSs after the phaseout date
for the following essential uses:

	(1)  Methyl chloroform, “solely for use in essential applications
(such as nondestructive testing for metal fatigue and corrosion of
existing airplane engines and airplane parts susceptible to metal
fatigue) for which no safe and effective substitute is available.” 
Under the Act, this exemption was available only until January 1, 2005. 
Prior to that date, EPA issued methyl chloroform allowances to the U.S.
Space Shuttle and Titan Rocket programs.  

	(2) Medical devices (as defined in section 601(8) of the Act), “if
such authorization is determined by the Commissioner [of the Food and
Drug Administration], in consultation with the Administrator [of EPA] to
be necessary for use in medical devices.”  EPA issues allowances to
manufacturers of MDIs, which use CFCs as propellant for the treatment of
asthma and chronic obstructive pulmonary disease.

	(3) Aviation safety, for which limited quantities of halon-1211,
halon-1301, and halon-2402 may be produced “if the Administrator of
the Federal Aviation Administration, in consultation with the
Administrator [of EPA] determines that no safe and effective substitute
has been developed and that such authorization is necessary for aviation
safety purposes.”  Neither EPA nor the Parties have ever granted a
request for essential use allowances for halon, because in most cases
alternatives are available and because existing quantities of this
substance are large enough to provide for any needs for which
alternatives have not yet been developed. 

	The Parties to the Protocol, under Decision XV/8, have additionally
allowed a general exemption for laboratory and analytical uses through
December 31, 2007.  This exemption is reflected in EPA’s regulations
at 40 CFR part 82, subpart A.  While the Act does not specifically
provide for this exemption, EPA has determined that an allowance for
essential laboratory and analytical uses is allowable under the Act as a
de minimis exemption.  The de minimis exemption is addressed in EPA’s
final rule of March 13, 2001 (66 FR 14760-14770).  The Parties to the
Protocol subsequently agreed (Decision XI/15) that the general exemption
does not apply to the following laboratory and analytical uses: testing
of oil and grease, and total petroleum hydrocarbons in water; testing of
tar in road-paving materials; and forensic finger-printing.  EPA
incorporated this exclusion at Appendix G to subpart A of 40 CFR part 82
on February 11, 2002 (67 FR 6352).

C.  What is the process for allocating essential use allowances?

	Before EPA allocates essential use allowances, the Parties to the
Protocol must first authorize the United States’ request to produce or
import essential Class I ODSs.  The procedure set out by Decision IV/25
calls for individual Parties to nominate essential uses and the total
amount of ODSs needed for those essential uses on an annual basis.  The
Protocol’s Technology and Economic Assessment Panel (TEAP) evaluates
the nominated essential uses and makes recommendations to the Parties. 
The Parties make the final decisions on whether to authorize a Party’s
essential use nomination at their annual meeting.  This nomination cycle
occurs approximately two years before the year in which the allowances
would be in effect.  The allowances allocated through today’s action
were first nominated by the United States in January 2005.

	Once the U.S. nomination is authorized by the Parties, EPA allocates
essential use exemptions to specific entities through notice-and-comment
rulemaking in a manner consistent with the Act.  For MDIs, EPA requests
information from manufacturers about the number and type of MDIs they
plan to produce, as well as the amount of CFCs necessary for production.
 EPA then forwards the information to the Food and Drug Administration
(FDA), which determines the amount of CFCs necessary for MDIs in the
coming calendar year.  Based on FDA’s determination, EPA proposes
allocations to each eligible entity.  Under the Act and the Montreal
Protocol, EPA may allocate essential use allowances in quantities that
together are below or equal to the total amount authorized by the
Parties.  EPA will not allocate essential use allowances in amounts
higher than the total authorized by the Parties.  For 2007, the Parties
authorized the United States to allocate up to 1,000 MT of CFCs for
essential uses.  In a notice of proposed rulemaking published in the
Federal Register on November 3, 2006 (71 FR 64668), EPA proposed to
allocate 125.3 MT.

D. What quantity of essential use allowances is EPA allocating? 

	EPA proposed to allocate 125.3 MT of essential use allowances for 2007
in its November 2006 proposed rule.  With today’s final action, EPA is
allocating 167.0 MT of essential use allowances for 2007 for the
production and import of CFCs for the manufacture of essential use MDIs.
 EPA is allocating this amount based on a revised determination letter
by FDA on May 4, 2007.  EPA has placed this revised determination letter
in the docket for review.  This quantity of 167.0 MT includes two
increases from the amounts proposed in November 2006.  First, EPA is
allocating 22.4 MT to Armstrong Pharmaceuticals, Inc. (an increase from
a proposed allocation of 0.0 MT) for the manufacture of epinephrine;
second, EPA is allocating an additional 19.3 MT to 3M Pharmaceuticals
(65.0 MT total for 2007) for the manufacture of essential use MDI
products (Aerobid, Aerobid M, and Maxair Autohaler).  The total
allocation for 2007 of 167.0 MT is far below the 1,000 MT that the
Parties to the Montreal Protocol authorized for the United States for
2007.  It is also a significant reduction from the 1002.4 MT allocated
for 2006.  These reductions demonstrate the U.S. commitment to
decreasing the amount of CFCs allocated for essential uses. 
Furthermore, the 167.0 MT does not include an allocation for the
manufacture of CFC-albuterol MDIs indicating that the transition to non-
CFC alternatives for this application is well underway.  

	In its revised determination letter FDA informed EPA that Armstrong
needed 22.4 MT of CFCs to manufacture generic epinephrine in 2007.  EPA
and FDA are allocating this amount to Armstrong to acquire CFC-114 for
the manufacture of epinephrine, not CFCs to manufacture CFC-albuterol. 
In the revised determination letter, FDA articulated that Armstrong’s
allocation is specific to CFC-114 for the production of epinephrine
MDIs.  FDA stated, “In recent years, we aggregated the amounts for
CFC-11, -12, -114 and provided recommendations on the total amounts of
CFC necessary to protect the public health.  This year, we provide
recommendations for aggregated amount of CFCs, with one exception.  We
recommend that Armstrong Pharmaceuticals receive an allocation of 22.4
tonnes of CFC-114 for the manufacture of epinephrine CFC MDIs.  We
believe that this specific allocation is necessary to protect the public
health, given the current essentiality determination as contained in 21
CFR 2.125(e).”  Consistent with FDA’s determination letter, EPA is
allocating 22.4 MT of CFC-114 to Armstrong for the production of
epinephrine MDIs for 2007.

	FDA also informed EPA in its revised determination letter that it
determined that 3M needed an additional 19.3 MT of essential use
allowances to manufacture essential use MDI products.  These products
include Aerobid, Aerobid M, and Maxair Autohaler.   

	FDA noted to EPA that in making its revised determination, FDA reviewed
supplementary information from MDI manufacturers, including more recent
data on the quantities and types of CFCs held as well as more specific
information on manufacturers' production plans for 2007.  Based on this
information, FDA recalculated the quantities and types of CFCs that
would be medically necessary and recommended small increases in the
allocations for two MDI manufacturers for calendar year 2007.  In
addition, FDA informed EPA that it applied the terms of Decision XVII/5,
including the provision that that each manufacturer maintain no more
than a one-year operational supply of CFCs for essential uses.  

II. Response to Comment

	EPA received comments from twelve entities on the proposed rule, which
are addressed in more detail below.  

A. Proposed Level of Allocations 

	One commenter opposed as too low EPA’s proposed allocation of 125.3
MT of CFCs for MDIs, given that the Parties to the Montreal Protocol
authorized 1,000 MT.  The commenter stated that 125.3 MT would not
suffice to ensure continuous availability of CFCs necessary to meet
expected demand.  The commenter noted that the facility being used to
produce CFC-11 and CFC-12 is the only facility doing so and it is sized
for far larger volumes of production.  According to the commenter,
continuing to decrease the size of production runs makes manufacturing
more inefficient, complex, and costly.  Therefore, the commenter urged
EPA to set policies that enable the manufacture of CFCs and allow
producers and users the ability to shift unused allocations from one
year to the next so that supply can be more easily assured.  In
addition, the commenter urged EPA to re-allocate essential use
allowances in 2007 for essential use CFCs that were not produced and
subsequently conferred in 2006.  The commenter also noted that
production of CFC-114 during 2006 was not adequate to meet MDI producer
demand for which 2006 essential use allowances existed.  

	A second commenter provided similar comments and noted concern that
qualified CFC producers may not be able or willing to produce a reliable
supply in future years, citing the CFC-114 production shortfalls
experienced by Honeywell as an example.  The commenter expressed support
for efforts by the U.S. Government to work with other Parties to the
Montreal Protocol to establish a process for assessing the need for and
feasibility of a final production campaign; the commenter stated that
such efforts would support the ultimate phaseout of CFC production for
MDIs while protecting public health by ensuring a smooth transition for
MDIs.  

	A third commenter also opposed as too low the quantity of essential use
allowances proposed for allocation.  The commenter submitted two sets of
comments, one of which was supplementary and received after the end of
the comment period, but which EPA considered.  Both of these comments
were submitted as confidential business information (CBI); EPA has
placed a redacted version of the comments provided by the commenter in
the docket.  The commenter indicated that it received a proposed
allocation of zero metric tons and urged EPA to allocate additional
allowances so that it could meet anticipated market demand for
CFC-albuterol and CFC epinephrine in 2007 and 2008.  The commenter noted
that with the withdrawal of Schering-Plough from the CFC market,
Armstrong would be only manufacturer of CFC-albuterol.  In addition, the
commenter asserted, the elimination of Schering-Plough’s Warrick
branded CFC-albuterol product will create a dramatic shortfall in the
supply of CFC inhalers and is likely to lead to serious market
disruption unless Armstrong increases production to meet demand.  The
commenter urged EPA to provide for its propellant needs for both 2007
and 2008 in the 2007 rule.  To support its argument, the commenter
provided data from IMS, a pharmaceutical market research firm,
indicating market trends of CFC- albuterol that suggest in 2006,
CFC-albuterol comprised a significant amount of the total albuterol
market.  

A fourth commenter that submitted CBI comments requested additional CFCs
to manufacture its essential use MDIs.  A redacted version of these
comments has been placed in the docket.  The commenter requested
additional amount of 19.3MT CFCs to manufacture Aerobid, Aerobid M, and
Maxair Autohaler.  The commenter stated that without the additional
allowances it would likely be unable to manufacture all of the MDIs
forecasted by two of its customers.  

Another commenter noted that it understood the zero allocation proposed
for its company for 2007 and stated that it has been working to acquire
existing CFCs to satisfy essential needs.  

	EPA also received comments that either supported the proposed
allocations – in whole or in part – or believed they should be
lower.  One commenter stated that there should be no exemptions for any
ODS.  The commenter stated that allowing exemptions discourages the
development of alternatives.  		

	Seven commenters supported some or all of the proposed allocations for
2007.  Four expressed approval of EPA’s allocation of zero essential
use allowances for manufacture of albuterol MDIs, as determined by FDA. 
One commenter additionally stated that by allocating only what was
necessary and not the entire amount allowed by the Parties, FDA and EPA
are supporting the over-arching goals of the Protocol.  The commenter
also noted that the proposed allocations are consistent with FDA’s
final determination on albuterol non-essentiality and that EPA’s
phaseout timeline fully agrees with FDA’s conclusions that an
effective and orderly transition to HFA MDIs would be complete by
December 31, 2008.  

	One commenter supported EPA’s choice to allocate only a portion of
the essential use allowances granted to the United States by the Parties
to the Protocol.  The commenter stated that it supports EPA’s decision
to eliminate essential use allowances for those companies currently
marketing both CFC and non-CFC albuterol MDIs.  The commenter stated
that the existing CFC stockpiles in the United States will be adequate
to assure a smooth and timely transition to non-CFC albuterol inhalers. 

	EPA received two sets of CBI comments from one commenter, both of which
were received after the close of the comment period, but that EPA
considered, which supported EPA’s proposed zero allocation for the
manufacture of CFC-albuterol MDIs.  EPA has placed redacted versions of
the comments provided by the commenter in the docket.  The commenter
argued that the proposed zero allocation will facilitate the orderly
transition to HFA albuterol inhalers, minimize the confusion and related
compliance and safety issues raised by patients alternating between CFC
and HFA inhalers, and ensure that additional CFCs are not needlessly
released into the environment.  

	The commenter noted that it had already begun to transition its supply
of CFC-based albuterol inhalers to HFA inhalers.  Additionally, the
commenter asserted that an early transition to HFA inhalers would allow
manufacturers, physicians, and pharmacists to act in a coordinated
manner to educate patients and transition them in an orderly fashion. 
It noted that there are important differences between CFC and HFA
inhalers that require patient counseling and that without an early and
orderly transition facilitated by patient education and training, many
patients will switch back and forth between the two inhalers or wait
until the last minute. 

	The commenter further noted that to support the transition to HFA-based
albuterol, it has dedicated significant resources to support patients,
physicians, pharmacists, and other stakeholders.  The commenter stated
that it had significantly increased the production of HFA albuterol
inhalers and that it has the ability to increase production further if
there is need.  Additionally, the commenter stated that it has
implemented a comprehensive plan to communicate information regarding
the transition to key stakeholders.  The commenter also noted that it
has a patient assistance program for low income patients and patients
without health insurance.  

	EPA allocates essential use allowances annually in accordance with the
Act and the Montreal Protocol.  For the 2007 control period, EPA, in
consultation with FDA, evaluated the medical demand for essential use
MDIs and determined the amount of CFCs needed to meet that demand.  The
U.S. Government first nominated an amount for essential use allowances
for 2007 in January 2005 (1,493 MT).  The Parties authorized 1,000 MT
for the U.S. at the 17th Meeting of the Parties in 2006.  Since the U.S.
Government submitted its nomination for 2007, EPA and FDA have received
more current information on the amount of CFCs needed to manufacture
essential use MDIs, amounts of stockpiled CFCs available to
manufacturers, and the availability of non-CFC alternatives.  Neither
the 1,493 MT nominated nor the 1,000 MT authorized accurately reflects
the amount of CFCs necessary to meet medical needs in 2007.   

	In making its determination for 2007 essential use allowances, FDA
informed EPA that it undertook a similar analysis as completed in years
past.  FDA articulated to EPA that for each MDI manufacturer that
requested essential use allowances, FDA evaluated a number of factors. 
FDA informed EPA that the following steps were taken in making the 2007
determination for essential use allowances.  First, FDA evaluated the
medical necessity by evaluating the number of CFC MDIs necessary to
protect public health in the U.S. (including consideration of current
data on the prevalence of asthma and COPD) and the quantity of CFCs
necessary to ensure the manufacture and continuous availability of those
MDIs.  Second, FDA analyzed the existing inventory of CFCs held by each
MDI manufacturer as of May 1, 2006 and updated as of December 31, 2006. 
Third, FDA accounted for the implementation of the terms of Decision
XVII/5, including the provision that manufacturers maintain no more than
a one-year operational stock, and considered how manufacturers’
existing supplies of CFCs would be drawn down as essential use MDIs were
manufactured throughout the year.  As articulated in the 2006
determination letter, revised May 4, 2007, FDA assumed that all
manufacturers would procure the full quantity of CFCs allocated to them
for the year.

	In response to the comments recommending allocation of essential use
CFCs for multiple years, although EPA recognizes the difficulties
associated with producing small amounts of CFCs per year, the Parties
authorized an essential use exemption for the production and import of
CFCs for the 2007 control period only.  Therefore, in accordance with
the Decisions of the Parties, the United States allocated allowances to
MDI manufacturers for 2007 control period.  EPA understands that the
U.S. manufacturer can increase the efficiency of its production run by
combining the amount allocated by EPA for essential use production of
pharmaceutical-grade CFCs for domestic use with the amount permitted
under the Montreal Protocol, and authorized by EPA, for production of
pharmaceutical-grade CFCs for export to Article 5 and non-Article 5
Parties, recognizing that the manufacturer may incur the cost of
destroying the non-pharmaceutical grade portion of the run.  EPA
understands that the design of the Montreal Protocol and Title VI of the
Act anticipated increasing costs of ODSs as a means of fostering the
transition to alternatives.  However, the United States Government
expects that this issue of a need for campaign production to meet the
essential use health needs for CFCs for MDIs globally will be raised by
the Parties to the Montreal Protocol at future meetings.  

With respect to the comments recommending higher allocations for 2007 to
manufacture generic albuterol and generic epinephrine, FDA has informed
EPA that additional essential use allowances will be needed for the
manufacture of generic epinephrine in 2007.  FDA made this determination
based on information about the manufacturer’s existing inventory,
blend requirements, and production need, as well as implementation of
the terms of Decision XVII/5, including the provision that manufacturers
maintain no more than a one-year operational supply for CFCs for
essential uses.  

FDA informed EPA that it did not agree with the commenter that
additional amounts of CFCs need to be allocated for the manufacture of
CFC-albuterol in 2007 to meet the overall demand for albuterol.  In the
September 2006 letter to EPA (revised in May 2007), FDA stated that its
determination of the amount of CFCs necessary for production of
essential use MDIs is lower than the total amount requested by
manufacturers, and in reaching its estimate, FDA took into account the
manufacturers’ production of MDIs that used CFCs as a propellant in
2006, their estimated production in 2007, and stockpile levels (as of
December 31, 2006).  FDA also stated that it considered comments
received on the proposed rule for the allocation of CFCs in 2007. 
Finally, as articulated in its letter, FDA took into account that, at
the time of the letter, roughly 40 percent of the albuterol MDIs
currently produced were propelled by HFAs (HFA-134a) rather than CFCs. 

	Given the publicly stated plans of a major albuterol CFC supplier
(Schering-Plough), FDA has informed EPA that it believes the manufacture
of CFC-albuterol will decrease in 2007 (and further decrease in 2008 as
the phase-out date approaches).  The manufacture and sale of albuterol
HFA MDIs will increase sufficiently to meet the medical needs of
patients for albuterol.  FDA will continue to monitor closely the
availability of albuterol to ensure that there is adequate supply to
meet patient needs.  FDA has informed EPA that HFA inhalers now make up
approximately half the overall albuterol-levalbuterol inhaler market. 
Furthermore, according to FDA, HFA manufacturers report they currently
have the ability to produce enough HFA albuterol MDIs to meet total
market demand for albuterol MDIs.

	With respect to the commenter that requested additional CFCs to
manufacture its essential use MDIs (Aerobid, Aerobid M, and Maxair
Autohaler), FDA informed EPA that an increase of CFCs to 65.0 MT was
necessary for 2007.  FDA informed EPA that its revised determination was
made based on additional analysis of medical need and on supplementary
information received from the MDI manufacturers, including more recent
data on quantities of CFCs held.  In addition, FDA informed EPA that it
applied the terms of Decision XVII/5, including the provision that that
each manufacturer maintain no more than a one-year operational supply of
CFCs for essential uses.   

	In response to the comment that there should be no exemptions for any
ODS and that allowing exemptions discourages the development of
alternatives, in this instance, EPA and FDA do not believe that the
allocation of essential uses for the manufacture of CFC MDIs precludes
the development of alternatives, in part because EPA and FDA consider a
company’s progress in research and development of alternatives in
evaluating a company’s request for an essential use exemption. 

	Finally, two commenters raised specific medical-related issues.  One
commenter who is an asthmatic expressed concern that the discontinuation
of inhalers containing albuterol will leave no alternatives for
asthmatics that are allergic to sulfites and sulfates.  The commenter
notes that he or she is allergic to sulfites and that the generic
albuterol inhaler is going to be discontinued.  

	In response to the commenter, FDA informed EPA that HFA albuterol MDIs
do not contain sulfites.  Indeed, unlike CFC albuterol products, each
albuterol HFA has a unique formulation which should allow patients to
find a product they tolerate and find effective, even if they feel one
particular product is not sufficiently tolerable.

	A second commenter argued that the elimination of fluorocarbons is not
necessary in aerosol albuterol items.  The commenter stated that the
non-aerosol form of albuterol poses several problems, such as difficulty
in ascertaining when a canister is empty.  In addition, the commenter
noted that there is no sensation that a dosage of the non-aerosol
medication is being received and that this may have profoundly negative
medical repercussions.   The commenter also asserted that because the
disbursement of albuterol aerosol liquid goes into a mouth that is
surrounding the canister and seals off the disbursement, no aerosol
escapes into the surrounding atmosphere.  Lastly, the commenter stated
that the elimination of aerosol dispensed respiratory medications will
have a negative effect on patients. 

	In March 31, 2005 final rule (70 FR 17168), FDA determined that
albuterol will no longer be designated as an “essential use” after
December 31, 2008.  FDA discussed issues associated with the
essentiality of albuterol in that rule.  Today’s final action
allocating CFCs for the manufacture of MDIs does not address the
essentiality of albuterol.  EPA notes that the non-ODS albuterol MDIs
(i.e. HFA-albuterol) that are currently available to patients also
contain an aerosol, HFA-134a.

B. Consideration of Stocks of CFCs in the Allocation of Essential Use
Allowances

One commenter stated that EPA should not allocate any new essential use
allowances for 2007, claiming that existing stockpiles of CFCs must be
used before new essential use allowances may be granted.  The commenter
stated that EPA’s proposed essential use allowances for 2007 were in
contravention of Decision IV/25 of the Montreal Protocol, which provides
that production and consumption of CFCs for essential uses is permitted
only if the CFCs are “not available in sufficient quantity and quality
from existing stocks.”  The commenter stated that where stockpiles are
in excess of essential need, EPA should first seek voluntary transfers,
and second redistribute CFC stockpiles to where they are most needed.  

The commenter provided three supporting claims.  First, the commenter
provided data indicating that there are sufficient aggregate stockpiles
available in the U.S. to cover the essential needs for 2007.  The
commenter recognized that these stockpiles are not evenly held by U.S.
companies and thus urged EPA to take steps to redistribute them. 
Second, the commenter asserted that the Montreal Protocol and the Clean
Air Act support the “reallocation” of existing CFC stockpiles before
allocating new essential use allowances.  The commenter argued that the
objective of the Montreal Protocol supports an interpretation of
Decision IV/25 that the Montreal Protocol Parties should deplete the
aggregate CFC stockpiles available in their respective markets before
allocating new essential use allowances to any MDI manufacturers.  The
commenter stated that it recognizes that Decisions XVII/5 and XVIII/7
state that Parties must consider the operational supply of each
manufacturer in making essential use allowance decisions.  However, the
commenter asserted that it does not believe that these Decisions
conflict with or supersede Decision IV/25 as the Parties can take into
account both the aggregate CFC stockpile and each manufacturer’s
operational supply.  Additionally, the commenter argued that Decision
XII/2 provides for the transfer of essential use allowances and CFCs
held by MDI producing companies in order to avoid unnecessary
production.  According to the commenter, Decision VII/28 provides for
Parties, under certain circumstances, to reallocate excess essential use
allowances or CFCs in their respective markets.  Thus the commenter
asserted that compelling U.S. companies with excess CFCs to sell their
stockpiles to the U.S. Government for reallocation is supported by the
Montreal Protocol.  

Furthermore, the commenter argued that the CAA, specifically Section
615, grants EPA the right to take certain actions to prevent
endangerment to public health or welfare.  The commenter asserted that
unnecessary emissions of CFCs will endanger public health or welfare due
to the effects of stratospheric ozone depletion, and that EPA is
justified in promulgating regulations that would allow it to mandate the
reallocation of excess stockpiled CFCs.

	Lastly, the commenter stated that transfers or reallocations of CFCs
are subject to all other Montreal Protocol (specifically, Decisions
IV/25, XII/2, and XVII/5) and CAA parameters.  Further, the commenter
stated that EPA may not approve any transfer or reallocation of CFCs for
any CFC MDI product approved after December 31, 2000 unless the
essentiality criteria set out in paragraph 1(a) of Decision IV/25 are
met, or to the extent the intended recipient maintains CFC stockpiles in
excess of the one-year operational supply threshold.  

	In assessing the amount of new CFC production required to satisfy 2007
essential uses, just as in 2006, EPA and FDA applied the terms of
Decision XVII/5 including the provision on stocks of CFCs that indicates
Parties should allocate such that manufacturers of MDIs maintain no more
than a one-year operational supply of CFCs for essential uses.  FDA’s
approach for 2007 was similar to that for 2006; first it calculated the
quantity that each MDI manufacturer needed to produce essential use MDIs
for the year and then it subtracted from that quantity any CFC stocks
owned by that MDI manufacturer exceeding a one-year operational supply. 
The remainder, if more than zero, is the quantity of newly produced or
imported CFCs needed by that manufacturer.  In addition, FDA has
articulated to EPA that consistent with Decision XVII/5, FDA evaluates
each company on an individual basis, rather than an aggregate of all MDI
manufacturers.  So, while amounts of CFCs may be available for purchase
in the marketplace, FDA and EPA only account for stocks owned by a
particular MDI manufacturer in evaluating that manufacturer’s CFC
need.  

	EPA agrees with the commenter that the objective of the Montreal
Protocol is to reduce and eventually eliminate the production of ODS,
but that the essential use provision exists to ensure that an adequate
supply of CFCs are available for those uses deemed “essential” by
the Parties.   EPA recognizes that in making the determination for
essential uses for 2007, FDA took into account a number of
considerations in assessing each MDI manufacturer’s need, including
the amount and type of CFC necessary to produce specific MDIs. 
Pertaining to the commenter’s comment about redistribution of excess
CFCs, such action is outside the scope of the proposal on which this
final rule is based.  While the commenter suggests that EPA use Section
615 authority to redistribute excess CFCs, EPA does not believe that
government-mandated redistribution is necessary at this time, and thus
has not examined the extent of its authority for such action.  EPA
regulations currently allow transfer of both essential use allowances
and essential use CFCs among essential use allowance holders.  These
mechanisms provide for redistribution of CFCs with minimal government
involvement.  The small number of participants in the market for
essential use CFCs and the limited quantities of CFCs at issue further
suggest that there is no need to expand EPA’s role.  In addition, any
entity that chooses to hold stocks of essential use CFCs rather than
sell to a willing purchaser runs the risk that the stocks will decline
in value and ultimately become a liability for domestic use.    

	EPA regulates transfers of essential use CFCs to ensure the proper use
of such CFCs and in approving transfers between domestic MDI
manufacturers, EPA requires the companies involved to certify that the
MDIs produced with the transferred essential use CFC were approved by
FDA before December 31, 2000.  EPA does not apply the terms of Decision
XVII/5, including the provision on manufacturers maintaining no more
than a one-year operational supply, when assessing whether to approve a
transfer of essential use CFCs.  However, in determining annual
essential use allocations for MDI manufacturers, FDA analyzes each MDI
manufacturer’s stocks of CFCs.  Therefore, if a company obtains
essential use CFCs during a particular year from another MDI
manufacturer, FDA would account for those stocks in making its
determinations for the year.  EPA encourages, but does not mandate, such
transfers. 

	A second commenter noted that based on the projected use of its 2006
stockpile amounts, it would require additional CFCs to meet the
increased demand for albuterol MDIs and epinephrine mist MDIs.  EPA and
FDA disagree with the commenter that additional essential use allowances
should be allocated in 2007 for the production of CFC-albuterol MDIs. 
EPA and FDA believe that the commenter’s projections assume a level of
production exceeding that medically necessary.  Further, this comment
does not take into account all CFCs available to the company for
albuterol production.  When these factors are considered, EPA believes,
based on consultation with FDA, that no additional CFC allowances for
albuterol should be allocated in 2007.

C. Number of Months of Safety Stockpile

	One commenter supported the zero allocation for albuterol manufacture
in 2007, but voiced concern with the method by which FDA calculated
essential use allowances.  The commenter noted that while FDA appeared
to have based its allocation recommendation on the operational supply
rule established by paragraph 2 of Decision XVII/5, FDA implemented this
paragraph by setting the minimum stockpile threshold at 12 months (as
articulated in EPA’s final rule allocating 2006 essential use
allowances) while the Decision states that 12 months is the maximum
operational supply that may be maintained by an MDI manufacturer. 
Recognizing that the Decision allows Parties to set the operational
supply threshold at less than one year, the commenter recommended a
threshold of one to three months. 

	A second commenter noted that FDA applied the twelve-month cap on each
company’s operational supply of CFCs, as stated in paragraph 2 of the
Montreal Protocol Decision XVII/5, to determine that no allocations for
manufacturers of CFC albuterol MDIs were necessary.  The commenter
stated that this interpretation was “logical, reasonable, and
equitable,” but further stated that the twelve-month stockpile supply
is a maximum amount and that a six-month supply stockpile allowance
should be used in any future assessments of allocations.

A third commenter expressed support for the calculation of anticipated
CFC requirements for future manufacture of albuterol MDIs, as described
in the proposed rule, and stated that the calculation is both reasonable
and appropriate to ensure a smooth transition.  The commenter noted that
sufficient stockpiles of CFCs exist to meet albuterol CFC MDI production
needs through the end of 2008.  In addition, the commenter stated that
an orderly transition to albuterol HFA implies a phase-out of albuterol
CFC production before the December 31, 2008 deadline.  After that
deadline, section 610 of the Clean Air Act will prohibit the sale or
distribution of albuterol CFC MDIs in interstate commerce.  Therefore,
the commenter states, retailers and suppliers must have adequate time to
deplete their stock before then.

	Paragraph 2 of Decision XVII/5 states that Parties “shall take into
account pre- and post-1996 stocks of controlled substances as described
in paragraph 1(b) of Decision IV/25 such that no more than a one-year
operational supply is maintained by that manufacturer.”  In making its
determination for allocation of essential use allowances, FDA acted
consistent with this provision by allowing manufacturers to maintain a
supply of up to 12 months of the manufacturing operations.  FDA
calculates volumes to allow the manufacturer to end the calendar year
with the appropriate level of stock.  EPA and FDA do not agree that
allowing manufacturers to maintain up to a 12 month supply is excessive
because, in part, maintaining such an amount accounts for unexpected
variability in the demand for MDI products or other unexpected
occurrences in the market and therefore ensures that MDI manufacturers
are able to produce their essential use MDIs.  

D. Rulemaking Process and Timing

	One commenter requested that EPA reconsider its draft rule in light of
the announcement by Schering-Plough, made on October 13, 2006, that it
is ending production of its Warrick Pharmaceutical brand CFC-albuterol
MDIs early in 2007.  According to the commenter, most customers believe
that Warrick brand CFC-albuterol will not be available after early 2007.
 In this regard, the commenter noted that after the first quarter of
2007, Armstrong will be the sole producer and supplier of albuterol CFCs
and that EPA must make an additional CFC allocation to Armstrong in
order to avoid a dramatic shortfall in CFC supply relative to projected
demand.  

	Given the announcement by Schering-Plough, EPA and FDA expected that
the manufacture of CFC-albuterol would be significantly lower in 2007
than 2006 and that this decrease will be balanced by an increase in HFA
production and availability sufficient to meet patient needs.  EPA and
FDA expect a further decrease in albuterol CFC production in 2008,
particularly in the latter months leading up to December 31, 2008, when
all sales of CFC albuterol MDIs must cease.  FDA has informed EPA that
based on information that FDA is receiving from HFA manufacturers, HFA
manufacturers currently have the ability to produce enough HFA albuterol
MDIs to meet total market demand for albuterol MDIs.  To this end, FDA
does not anticipate shortages of albuterol MDIs.  

	One commenter indicated that it believed that CFCs should not be
allocated to companies unless they have demonstrated good faith efforts
to research and develop CFC-free alternatives.  The commenter argued
that EPA’s interpretation of Paragraph 1 of Decision VIII/10 – that
the Parties will request information on research and development from
companies but not use it as a basis for denying an essential use
allowance request – is inadequate.  The commenter asserted that the
reiteration of the same language in Paragraph 3 of Decision XVIII/7 in
Decision XVIII/10 indicates that Parties did not believe that the plain
intent of Decisions VIII/10 was being followed and that at this stage of
the phaseout the Parties are looking for demonstrations of commitment to
the transition.   The commenter also argued that Decisions VIII/10 and
XVIII/7 warrant EPA to require companies requesting essential use
allowances to demonstrate ongoing research and development of CFC-free
alternatives and that EPA has the authority to do so under Sections
604(d)(2) and 615 of the CAA.

	 EPA agrees that companies applying for essential use allocations to
manufacture MDIs generally should demonstrate ongoing research and
development of alternatives to CFC MDIs.  To this end, in accordance
with Decision VIII/10, since 1997 EPA has requested that applicants
provide this information with their applications for CFC essential use
nominations.  EPA reiterated this policy in the final rules allocating
essential use allowances for 2005 and 2006 (70 FR 49836 and 71 FR 58504,
respectively).  Each company that is receiving an essential use
allocation has submitted information to EPA pertaining to its research
and development efforts.  In its essential use nominations, the U.S.
Government articulates that the MDI manufacturers, for which the U.S.
Government is submitting an essential use request, have submitted
information demonstrating their on-going research and development
activities in pursuit of alternatives to CFC MDIs.  To this end,
today’s rulemaking is fully consistent with the Decisions to the
Protocol.  

	One commenter stated that EPA’s essential use allowance allocation
process and proposed allocations comport with general standards of
administrative law.  The commenter stated that the proposed rule
allocating 2007 allowances clearly meets the non-arbitrariness standard
of administrative law that a rulemaking agency must “examine relevant
data” and that failure to do so could constitute arbitrary
decision-making.  The commenter specifically commended the use of
company-specific stockpile information collected in a follow-up letter
sent to companies on May 10, 2006, seeking information under the
authority of Section 114 of the CAA.  In addition, the commenter stated
that the 2007 proposed rule correctly applies the “one-year
operational supply” provision of Decision XVII/5 and that EPA
disclosed FDA’s methodology and allowed ample opportunity for public
comments.  Last, the commenter argued that EPA is required to provide an
additional notice and comment opportunity for public comment on any
material increase in any company’s allocation (e.g. allocating
essential use volumes to a company that EPA had proposed would not
receive any).  The commenter noted that this would include the posting
of an explanatory letter from FDA on the docket articulating the reasons
for the changes.  The commenter requested that EPA provide notice and
opportunity for public comment if it is considering allocating any
volumes to manufacturers of CFC-albuterol MDIs.   

	In response to the commenter’s request for notice and an opportunity
for public comment in the event that EPA issues material changes to a
company’s allocation, EPA believes that it has reasonably articulated
the reasons that two companies are receiving additional allocations in
this final rule and that further notice and comment on this issue is
unnecessary.  As stated in several of the preceding paragraphs, based on
additional information received and analysis, FDA determined that
essential use allowances be increased for two companies.  With respect
to essential use allocations for the manufacture of CFC-albuterol, EPA
confirms that it is not allocating any essential use allowances for the
manufacture of CFC-albuterol MDIs in the 2007 allocation.   

	EPA received three comments supporting its timeliness in starting the
allocation process and granting allocations in the first quarter of the
year to provide for better planning and security of supply. 

E. The Transition to Non-CFC MDIs

	One commenter provided information showing that HFA products have
accounted for a small and largely constant share of the albuterol market
over the past four years, and that CFC inhalers represent 92% of total
albuterol sales through the first nine months of 2006, according to IMS
data.  The commenter stated that meeting the demand for CFC-albuterol
with the withdrawal of Schering-Plough would require production of
CFC-propelled units in 2007 and 2008.  The commenter stated that EPA
should allocate additional CFC allowances for albuterol production in
2007 and 2008 to allow for an orderly market transition to HFA
albuterol.  The commenter stated that failure to allocate CFC allowances
for albuterol production in 2007 would create marketplace disruption and
risk harm to public health and provided the following justifications to
substantiate that claim.  

	First, the commenter argued that public and private reimbursement has
not completely caught up to the changeover to HFA inhalers and gaps
remain, particularly in Medicaid and Medicare Part D coverage.  Citing
IMS Health data, the commenter maintained that the wholesale prices for
HFA albuterol are more than five times higher than for CFC-albuterol.  A
shortage of less-expensive, CFC-based albuterol MDIs would deprive
low-income asthma sufferers of access to inhalers and as a result,
uninsured patients may be forced to seek relief in emergency rooms where
treatment may be costly and untimely.    

	Second, the commenter stated that converting a market from 92% CFC to
100% HFA requires a measured and orderly transition that shifts patients
to HFA inhalers while allowing for scale-up of HFA production capacity,
education of doctors and patients about the differences between CFC and
HFA albuterol, and adaptation to HFA products by pharmacies and
insurance companies.  The commenter stated that FDA and patient
advocates have stressed this point.  Further, the commenter argued that
a sudden, unexpected unavailability of CFC albuterol might endanger
patient health because patients might not have sufficient time to safely
transition and because all formulations of HFA albuterol may not be
available in sufficient supplies.  The commenter also asserted that
HFA-propelled albuterol inhalers differ from CFC-based inhalers in taste
and delivery feel and that noted that patients may need time to find the
most agreeable formulation.  Lastly, the commenter stated that
pharmacists in states that rely on the Orange Book or the FDA to define
“therapeutic equivalence” and do not give discretion to pharmacists
to substitute, will not be able to substitute HFA-albuterol for
CFC-albuterol in cases where the prescription states CFC-albuterol.    

	Based on input from FDA, EPA disagrees that further allocations of
essential use allowances for the manufacture of CFC-albuterol are
medically necessary.  For 2007 essential use allocations, FDA examined
the amount of CFCs available from stocks to manufacture CFC-albuterol as
well as the supply of HFA albuterol in the marketplace and has
determined that there is not a medical need to allocate allowances for
CFC-albuterol.  According to FDA, based on information that FDA is
receiving from HFA manufacturers, HFA manufacturers currently have the
ability to produce enough HFA albuterol MDIs to meet total market demand
for albuterol MDIs.  

	EPA and FDA understand that patients may incur additional costs to
purchase albuterol inhalers as the market transitions to HFA MDIs.  For
example, EPA and FDA recognize that patients that have medical insurance
may encounter higher co –payments to purchase HFA albuterol.  However,
patient assistance programs exist to assist patients with the increased
costs.  For low-income patients, these programs include free and
discounted medicines.  To assist patients facing higher co-pays
associated with the increased costs of the HFA MDIs, programs such as
coupons and discounted HFA MDIs are being made available through
physicians, at pharmacies, and at individual manufacturers’ websites. 

	Advocacy and non-profit groups have been pursuing education and
outreach efforts in preparation for the phaseout of CFC-albuterol
inhalers at the end of 2008.  These organizations understand that
educating doctors, patients, and pharmacies is paramount.  FDA selected
December 31, 2008, as the phaseout date largely because it provided
sufficient time for the transition to HFA MDIs to occur.  This time
allows for patients to meet with their doctors and for their doctors to
discuss the change to HFA MDIs.  FDA is monitoring the supply of
albuterol closely and does not anticipate any shortages in 2007.  

	One commenter approved of EPA’s proposal to allocate no essential use
allowances for 2007 for single-moiety albuterol CFC MDIs because
satisfactory alternatives are available.  The commenter asserted that
FDA’s effective date of non-essentiality of albuterol MDIs of December
31, 2008 is overly conservative.  Two CFC-free alternatives to CFC
albuterol MDIs have been on the market for several years.  In addition,
the commenter stated that it is now clear that the bulk of the
transition to CFC-free albuterol will occur well before 2008, provided
that the companies’ efforts to transition the market are not undercut.
 The commenter noted that two additional CFC-free alternatives to CFC
-albuterol MDIs have been introduced into the market since FDA began its
rulemaking process to remove the essential use designation for albuterol
MDIs.  According to the commenter, FDA has determined that approximately
40 percent of albuterol MDIs produced in 2006 used HFA-134a as their
propellant and FDA anticipates that this will grow to 60 percent in 2007
and 80 percent in 2008.  The commenter stated its belief that this
estimate is overly conservative given that Warrick Pharmaceuticals,
which currently produces approximately 70 percent of the albuterol CFC
MDIs sold in the US, announced plans to cease manufacture of CFC
inhalers in early 2007 and plans to transition patients to its HFA
alternative.

	The commenter also noted that the only remaining risk to the successful
transition of the albuterol MDI market is that those companies that do
not have albuterol CFC-free alternatives on the market, and therefore
have no interest in seeing the transition successfully concluded, may
see the transition as an opportunity to gain temporary market share. 
The commenter argued that these companies could capitalize on patients
who are displeased with the new prescriptions, and with adjustments to
the inhalers’ “taste and feel,” associated with alternatives.

	One commenter recommended that EPA state that CFC albuterol MDIs are
not essential in the U.S. under Montreal Protocol criteria and that new
CFC production for such uses is not necessary.  The commenter noted that
four CFC-free albuterol MDIs have been approved by FDA and are now on
the market and that numerous patient assistance programs ensure that
low-income and uninsured patients can afford these medications. 
Therefore, the commenter notes, CFC albuterol MDIs are no longer
essential under the Decision IV/25 criterion and essential use
allowances may no longer legally be allocated for that use because
technically and economically feasible alternatives are available.  The
commenter believes that, at a minimum, EPA should state that new
production of CFCs for albuterol MDIs is per se not necessary. 

	Similarly, another commenter noted that the preamble to Decision
XVIII/7 states the need for Parties to limit essential use allocations. 
This commenter cites Decision IV/25, which states that CFCs for use in
MDIs shall not qualify as essential “if technically and economically
feasible alternatives or substitutes are available,” and the TEAP
report concludes that “technically satisfactory alternatives” to
CFC-based MDIs are available for short-acting beta-agonists. 

	In 2005, FDA issued a final rule removing the essential use designation
for CFC-albuterol MDIs as of December 31, 2008 (70 FR 17168).  FDA based
this decision on a comprehensive analysis that addressed, among other
issues, the availability and convenience of non-ODS alternatives.  FDA
determined that December 31, 2008, was an appropriate date because it
believed that adequate production capacity and supplies of HFA albuterol
would be available to meet patient need.  So, while there were
alternatives to CFC-albuterol MDIs available at that time, the supply
and the capacity of manufacturers to produce sufficient amounts of HFA
MDIs to meet the demand for albuterol were not yet adequate.  A date of
December 31, 2008 was chosen to provide time for a smooth and successful
transition to occur and to prevent a shortage in the market that would
do not affect the ability of patients to receive albuterol.  That
transition is well underway, but some production of CFC-albuterol
remains necessary and albuterol remains listed in 21 CFR 2.125(e).  

	Two commenters supported EPA’s proposed allocation and asserted that
a gradual transition from CFC-albuterol to HFA-albuterol would be
beneficial to patients.  One of the commenters stated EPA correctly
concluded, based on the availability of alternatives, that CFCs for
albuterol MDIs are not necessary, as defined by Section 604(d)(2) of the
Clean Air Act; and that the proposed allocations will benefit patients
by smoothing the transition to alternatives.

	One commenter supported the timetable in the proposed rule because it
enabled CFC albuterol supplies to be drawn down while ensuring a steady,
reliable supply of HFA product.  The commenter also believes that a
smooth transition requires a gradual conversion of the albuterol market
to HFAs and that this transition should be completed sufficiently in
advance of December 31, 2008.  The commenter notes that an abrupt
transition would have potential negative health impacts, present an
onerous administrative burden on providers and pharmacies, and waste any
potential for transition to improve disease management.  

	Both commenters cautioned the Agency about the negative health outcomes
potentially associated with patients transitioning several times between
CFC and HFA inhalers or using both products at once.  One commenter
stated that specific benchmarks can minimize confusion in pharmacies and
that an efficient phase-out period with consistent downward pressure on
the availability of CFC MDIs can prevent these problems.  The commenter
also suggested that nine months would be an appropriate conversion
period for CFC and HFA products to coexist in the market.

	One commenter noted that the four HFA albuterol MDIs on the market are
all different formulations, while the CFC albuterol MDIs were all
similar.  The commenter asserted that this variety will benefit patients
by allowing them to find a formulation that works best for them and to
avoid formulations to which they are allergic.  The commenter noted that
some of the HFA MDIs also have new features that were absent in the CFC
models and that the production variety improves security of supply.  The
commenter also stated that the proposed allocations send a consistent
and appropriate signal to all affected constituencies that the
Government is serious about the albuterol transition, which is prompting
patient education and outreach. 

III.	Allocation of Essential Use Allowances for Calendar Year 2007

	With this action, EPA is allocating essential use allowances for
calendar year 2007 to the entities listed in Table 1.  These allowances
are for the production or import of the specified quantity of Class I
controlled substances solely for the specified essential use.

TABLE 1. ESSENTIAL USE ALLOWANCES FOR CALENDAR YEAR 2007

Company	Chemical	2007 Quantity (metric tons)

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

Armstrong Pharmaceuticals	CFC-114

(production of epinephrine MDIs only)	22.4

Inyx (Aventis)	CFC-11 or

CFC-12 or

CFC-114	39.6

3M Pharmaceuticals	CFC-11 or

CFC-12 or

CFC-114	65.0

Wyeth	CFC-11 or

CFC-12 or

CFC-114	40.0

IV.	Statutory and Executive Order Reviews

A.  Executive Order 12866:  Regulatory Planning and Review

	Under Executive Order (EO) 12866   SEQ CHAPTER \h \r 1 (58 FR 51735,
October 4, 1993), this action is a "significant regulatory action”
because it raises novel legal or policy issues.  Accordingly, EPA
submitted this action to the Office of Management and Budget (OMB) for
review under EO 12866 and any changes made in response to OMB
recommendations have been documented in the docket for this action.

	EPA prepared an analysis of the potential costs and benefits related to
this action.  This analysis is contained in the Agency’s Regulatory
Impact Analysis (RIA) for the entire Title VI phaseout program (U.S.
Environmental Protection Agency, “Regulatory Impact Analysis: 
Compliance with Section 604 of the Clean Air Act for the Phaseout of
Ozone Depleting Chemicals,” July 1992).  A copy of the analysis is
available in the docket for this action and the analysis is briefly
summarized here.  The RIA examined the projected economic costs of a
complete phaseout of consumption of ozone-depleting substances, as well
as the projected benefits of phased reductions in total emissions of
CFCs and other ozone-depleting substances, including essential use CFCs
used for metered-dose inhalers.

B.  Paperwork Reduction Act

	This action does not impose any new information collection burden.  The
recordkeeping and reporting requirements included in this action are
already included in an existing information collection burden and this
action does not make any changes that would affect the burden.  However,
the Office of Management and Budget (OMB) has previously approved the
information collection requirements contained in the existing
regulations at 40 CFR 82(a) under the provisions of the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control
number 2060-0170, EPA ICR number 1432.25.    A copy of the OMB approved
Information Collection Request (ICR) may be obtained from Susan Auby,
Collection Strategies Division; U.S. Environmental Protection Agency
(2822T); 1200 Pennsylvania Ave., NW, Washington, DC 20460 or by calling
(202) 566-1672. 

	Burden means the total time, effort, or financial resources expended by
persons to generate, maintain, retain, or disclose or provide
information to or for a Federal agency.  This includes the time needed
to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to comply
with any previously applicable instructions and requirements; train
personnel to be able to respond to a collection of information; search
data sources; complete and review the collection of information; and
transmit or otherwise disclose the information.  

	An agency may not conduct or sponsor, and a person is not required to
respond to a collection of information unless it displays a currently
valid OMB control number.  The OMB control numbers for EPA’s
regulations are listed in 40 CFR part 9.

C.  Regulatory Flexibility Act

	The Regulatory Flexibility Act (RFA) generally requires an agency to
prepare a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements under the Administrative Procedure
Act or any other statute unless the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities.  Small entities include small businesses, small organizations,
and small governmental jurisdictions.

For purposes of assessing the impact of today’s rule on small
entities, small entities are defined as:  (1) pharmaceutical
preparations manufacturing businesses (NAICS code 325412) that have
fewer than 750 employees; (2) a small governmental jurisdiction that is
a government of a city, county, town, school district or special
district with a population of less than 50,000; and (3) a small
organization that is any not-for-profit enterprise that is independently
owned and operated and is not dominant in its field.

	After considering the economic impacts of today’s final rule on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities.  In
determining whether a rule has a significant economic impact on a
substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the primary
purpose of the regulatory flexibility analyses is to identify and
address regulatory alternatives “which minimize any significant
economic impact of the proposed rule on small entities.”  5 U.S.C.
Sections 603 and 604.  Thus, an agency may conclude that a rule will not
have a significant economic impact on a substantial number of small
entities if the rule relieves regulatory burden, or otherwise has a
positive economic effect on all of the small entities subject to the
rule.  This rule provides an otherwise unavailable benefit to those
companies that are receiving essential use allowances.  We have
therefore concluded that today's final rule will relieve regulatory
burden for all small entities.

D.  Unfunded Mandates Reform Act

	Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L.
104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector.  Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with "Federal mandates" that may
result in expenditures to State, local, and tribal governments, in the
aggregate, or to the private sector, of $100 million or more in any one
year.

	Before promulgating an EPA rule for which a written statement is
needed, section 205 of the UMRA generally requires EPA to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule.  The provisions of section 205 do
not apply when they are inconsistent with applicable law.  Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective, or least burdensome alternative, if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted.

	Before EPA establishes any regulatory requirements that may
significantly or uniquely affect small governments, including tribal
governments, it must have developed a small government agency plan under
section 203 of the UMRA.  The plan must provide for notifying
potentially affected small governments, enabling officials of affected
small governments to have meaningful and timely input in the development
of EPA regulatory proposals with significant Federal intergovernmental
mandates, and informing, educating, and advising small governments on
compliance with the regulatory requirements. 

	Today's rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, or tribal
governments or the private sector, since it merely provides exemptions
from the 1996 phase-out of Class I ODSs.  Similarly, EPA has determined
that this rule contains no regulatory requirements that might
significantly or uniquely affect small governments, because this rule
merely allocates essential use exemptions to entities as an exemption to
the ban on production and import of Class I ODSs. 

E.  Executive Order 13132:  Federalism

	Executive Order 13132, entitled “Federalism” (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
“meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.”
 “Policies that have federalism implications” is defined in the
Executive Order to include regulations that have “substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.”  

	This final rule does not have federalism implications.  It will not
have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government, as
specified in Executive Order 13132.  Thus, Executive Order 13132 does
not apply to this rule. 

F.  Executive Order 13175:  Consultation and Coordination with Indian
Tribal Governments

	Executive Order 13175, entitled “Consultation and Coordination with
Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires
EPA to develop an accountable process to ensure “meaningful and timely
input by tribal officials in the development of regulatory policies that
have tribal implications.”  This final rule does not have tribal
implications, as specified in Executive Order 13175.  Today's rule
affects only the companies that requested essential use allowances. 
Thus, Executive Order 13175 does not apply to this rule.  

G.  Executive Order 13045:  Protection of Children from Environmental
Health Risks and Safety Risks

	Executive Order 13045, "Protection of Children from Environmental
Health risks and Safety Risks" (62 FR 19885, April 23, 1997), applies to
any rule that (1) is determined to be "economically significant” as
defined under Executive Order 12866, and (2) concerns an environmental
health and safety risk that EPA has reason to believe may have a
disproportionate effect on children.  If the regulatory action meets
both criteria, the Agency must evaluate the environmental health or
safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.  

	EPA interprets E.O. 13045 as applying only to those regulatory actions
that are based on health or safety risks, such that the analysis
required under section 5-501 of the Order has the potential to influence
the regulation.  This final rule is not subject to Executive Order 13045
because it implements the phaseout schedule and exemptions established
by Congress in Title VI of the Clean Air Act.

H.  Executive Order 13211:  Actions that Significantly Affect Energy
Supply, Distribution, or Use

	This rule is not a “significant energy action” as defined in
Executive Order 13211, “Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355
(May 22, 2001)) because it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy.  The rule affects
only the pharmaceutical companies that requested essential use
allowances.

I.  National Technology Transfer and Advancement Act

	Section 12(d) of the National Technology Transfer and Advancement Act
of 1995 ("NTTAA), Public Law No. 104-113, section 12(d) (15 U.S.C. 272
note) directs EPA to use voluntary consensus standards in regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical.  Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies.  The NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.  This final rule
does not involve technical standards.  Therefore, EPA did not consider
the use of any voluntary consensus standards.

J.  Congressional Review Act

	The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating the
rule must submit a rule report, which includes a copy of the rule, to
each House of the Congress and to the Comptroller General of the United
States.  Therefore, EPA will submit a report containing this rule and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register.  This rule is not a
“major rule” as defined by 5 U.S.C. 804(2).  This rule will be
effective [insert date of publication].

V. 	Judicial Review

	Under section 307(b)(1) of the Act, EPA finds that these regulations
are of national applicability.  Accordingly, judicial review of the
action is available only by the filing of a petition for review in the
United States Court of Appeals for the District of Columbia Circuit
within sixty days of publication of the action in the Federal Register. 
Under section 307(b)(2), the requirements of this rule may not be
challenged later in judicial proceedings brought to enforce those
requirements.

Effective Date of this Final Rule

	Section 553(d) of the Administrative Procedures Act (APA) generally
provides that rules may not take effect earlier than 30 days after they
are published in the Federal Register.  Today’s final rule is issued
under section 307(d) of the CAA, which states, “The provisions of
section 553 through 557...of Title 5 shall not, except as expressly
provided in this subsection, apply to actions to which this subsection
applies.”  Thus, section 553(d) of the APA does not apply to this
rule.  EPA nevertheless is acting consistently with the policies
underlying APA section 553(d) in making this rule effective [insert date
of publication].  APA section 553(d) provides an exception for any
action that grants or recognizes an exemption or relieves a restriction.
 Because today’s action grants an exemption to the phaseout of
production and consumption of CFCs, EPA is making this action effective
immediately to ensure continued availability of CFCs for medical
devices.

List of Subjects in 40 CFR part 82

	Administrative practice and procedure, Air pollution control,
Chemicals, Chlorofluorocarbons, Exports, Environmental protection,
Imports, Methyl Chloroform, Ozone, Reporting and recordkeeping
requirements.

Dated: ______________

______________________________________________

Stephen L. Johnson, Administrator	

40 CFR Part 82 is amended as follows:

PART 82—PROTECTION OF STRATOSPHERIC OZONE

1.  The authority citation for part 82 continues to read as follows:

	Authority: 42 U.S.C. 7414, 7601, 7671-7671q. 

Subpart A—Production and Consumption Controls

2.  Section 82.8 is amended by revising the table in paragraph (a) to
read as follows:

§ 82.8 Grants of essential use allowances and critical use allowances.

(a) ***

TABLE I. - ESSENTIAL USE ALLOWANCES FOR CALENDAR YEAR 2007

Company	Chemical	2007 Quantity (metric tons)

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

Armstrong Pharmaceuticals	CFC-114

(production of epinephrine MDIs only)	22.4

Inyx (Aventis)	CFC-11 or

CFC-12 or

CFC-114	39.6

3M Pharmaceuticals	CFC-11 or

CFC-12 or

CFC-114	 65.0

Wyeth	CFC-11 or

CFC-12 or

CFC-114	 40.0

*   *  *  *  *

BILLING CODE 6560-50-P

  “Consumption” is defined as the amount of a substance produced in
the United States, plus the amount imported into the United States,
minus the amount exported to Parties to the Montreal Protocol (see
Section 601(6) of the Clean Air Act).

  Class I ozone depleting substances are listed at 40 CFR Part 82
subpart A, appendix A. 

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