The Drug Enforcement Administration on Oct. 23 proposed a comprehensive update to the quota-setting regulations for Schedule I and II controlled substances and three designated List I chemicals (84 Fed. Reg. 56712).

DEA also proposed "conforming revisions" needed to implement the 2018 SUPPORT for Patients and Communities Act. All of the rule changes would apply to both bulk and dosage-form manufacturers, as well as to importers of the List I chemicals ephedrine, pseudoephedrine and phenylpropanolamine (see §1315.34). Comments on the proposals are due by Dec. 23.

According to the Federal Register notice, the amendments would revise 21 C.F.R. Parts 1303 and 1315 to do the following:

• define the types of quotas,
• formalize a process to abandon quota,
• clarify language to ensure that both manufacturers and distributors are required to obtain certification of a buyer’s quota,
• reduce overall inventories,
• formalize the existing practice of use-specific subcategories for individual manufacturing and procurement quotas, and
• modify existing deadlines to issue or amend quotas midstream in the quota-setting process.

The 2018 SUPPORT for Patients and Communities Act gave DEA the authority to set aggregate production quotas (APQs), individual manufacturing quotas, and procurement quotas in terms of pharmaceutical dosage-form for drugs prepared from or containing a controlled substance. The act also changed the deadlines by which DEA must set individual manufacturing quotas for Schedule I and II substances.

The SUPPORT Act defined the phrase “covered controlled substance” and mandated that the amount of diversion of a covered controlled substance be estimated when establishing any quota, DEA explained in the Federal Register notice. The diversion estimate must be made in consultation with the U.S. Department of Health and Human Services and must consider rates of overdose deaths and abuse, as well as overall public health impact related to the covered controlled substance. “Appropriate quota reductions” must be made after estimating diversion. The act does not require quota increases.

Although the SUPPORT Act gave DEA the authority to establish quotas in terms of pharmaceutical dosage-form, DEA said it will "continue to use its current process of establishing quota in terms of kilograms, for the time being."

Cautioning that it is impossible to know all of the circumstances in which this new authority would be used, DEA said its current intention is that any implementation of dosage-form quotas "will be rare occurrences in response to specific events, and will coexist alongside kilogram quotas."

Defining Types and Filing to Abandon Quota

The proposed rule would codify two existing practices by (a) formally defining the types of quota issued for Schedule I and II and List I chemicals, and (b) formalizing the current reporting practice for a registrant to abandon quota in DEA's online Quota Management System.

DEA said the changes would provide better clarity, certainty and efficiency. New Sections 1303.03 and 1315.06 would be added to introduce and define the types of quotas in the current quota system. The three types of quota for Schedule I and II controlled substances would be APQ, individual manufacturing quotas and procurement quotas. The four types of quota available for List I chemicals would be defined as assessment of annual needs (AAN), individual manufacturing quotas, procurement quotas and import quotas.

With respect to abandoning quota, DEA noted that the current rules were written long before the agency had the advanced technology that now allows many aspects of the quota system to be managed online. To abandon any or all parts of the individual manufacturing quota for Schedule I and II controlled substances, the manufacturer would be required (under a revised §1303.27) to submit a quota application with the UN Reporting and Quota Section in the online Quota Management System, instead of a written notice submitted to the Drug and Chemical Evaluation Section. For List I chemicals, Section 1315.27 would be updated to mandate that a manufacturer also file in the online Quota Management System.

Reducing Inventories 

In background for the proposed rule changes, DEA explained that current regulations have contributed to increased inventories at multiple manufacturing processes/steps, which can lead to an increased risk of diversion. In addition, changes in the industry, including the presence of more drug manufacturers, have led to accumulations of inventory.

The proposal would revise Sections 1303.24 and 1315.24 to reduce the overall inventory held by DEA-registered bulk and dosage-form manufacturers. The revisions are necessary to reduce the potential diversion of both Schedule I and II substances and List I chemicals, DEA said. Among the proposed changes are:

• a decrease in the inventory allowance for individual manufacturing quotas from 50% to 30% for Schedule I and II controlled substances,
• an inventory allowance for procurement quotas of 30% for Schedule I and II substances, and
• a decrease in inventory allowance for procurement quotas from 50% to 30% for the List I chemicals.

DEA said it expects the use of five proposed subcategories to facilitate issuance of procurement quotas and provide a more accurate calculation of aggregate production quotas for the United States. Again, DEA said this change would formalize the current, on-going practice by registrants. The five proposed subcategories for quota are:

1. Quota for Commercial Sales,
2. Quota for Transfer,
3. Quota for Product Development,
4. Quota for Replacement, and
5. Quota for Packaging/Repackaging and Labeling/Relabeling.

All types of quota could be requested using the same application and format registrants are accustomed to using, in an online form, DEA noted.

Deadlines, Terms

Also, the deadlines for the various phases of the quota-setting process would be changed. For example, the deadline for issuing a procurement quota at Section 1303.12(c) would change from July 1 to Dec. 1 of the year preceding the calendar year during which the quota would be effective. Similarly, the deadline for fixing individual manufacturing quotas at Section 1303.23(c) would move from March 1 to July 1.

The deadline for establishing the APQ and the AAN would change to Sept. 1 each year.

If amended as proposed, the rules would use the same terms in the quota-setting process for both covered controlled substances and for covered List I chemicals.

DEA said it expects 550 registered entities would be affected by at least one provision in the proposed rule, including 361 manufacturers, 23 importers of List I chemicals, and 166 distributors of List I chemicals or controlled substances.