[Federal Register Volume 72, Number 112 (Tuesday, June 12, 2007)]
[Rules and Regulations]
[Pages 32212-32222]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-11319]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 82
[EPA-HQ-OAR-2006-0159; FRL-8325-5]
RIN 2060-AN81
Protection of Stratospheric Ozone: Allocation of Essential Use
Allowances for Calendar Year 2007
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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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: Effective Date: This final rule is effective June 12, 2007.
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 3334, 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., NW., Washington, DC 20460; by courier
service or overnight express: 1310 L Street, NW., Room 1047C,
Washington, DC 20005; by telephone: (202) 343-9556; by fax: (202) 343-
2338; or by, e-mail: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Basis for Allocating Essential Use Allowances
A. What are essential use allowances?
B. Under what authority does EPA allocate essential use
allowances?
C. What is the process for allocating essential use allowances?
D. What quantity of essential use allowances is EPA allocating?
II. Response to Comments
A. Proposed Level of Allocations
B. Consideration of Stocks of CFCs in the Allocation of
Essential Use Allowances
C. Number of Months of Safety Stockpile
D. Rulemaking Process and Timing
E. The transition to Non-CFC MDIs
III. Allocation of Essential Use Allowances for Calendar Year 2007
IV. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. 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\1\ 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,\2\ 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.
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\1\ ``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).
\2\ Class I ozone depleting substances are listed at 40 CFR Part
82 subpart A, appendix A.
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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.''
[[Page 32213]]
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 Montreal 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
Montreal 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 Montreal 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 Parties authorize the U.S. nomination, 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 for 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 dated 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 1,002.4 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
[[Page 32214]]
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 each manufacturer maintain no more than
a one-year operational supply of CFCs for essential uses.
II. Response to Comments
EPA received comments from twelve entities on the proposed rule, as
discussed 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 the 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. 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 sets of
comments were submitted as confidential business information (CBI); EPA
has placed redacted versions of them 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 an
additional 19.3 MT of 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 Montreal 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 Montreal 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 which
EPA considered, which supported EPA's proposed zero allocation for the
manufacture of CFC-albuterol MDIs. EPA has placed redacted versions of
the comments in the docket. The commenter supported the proposed
allocations, specifically the proposed zero allocations for albuterol
MDIs containing CFCs. 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
[[Page 32215]]
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 it took the following steps 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 supply, and considered how
manufacturers' existing CFC supplies would be drawn down as essential
use MDIs were manufactured throughout the year. As was also articulated
in the 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 CFC production and import 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 that ODS costs would increase during 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 comment 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 Schering-Plough, a major
albuterol CFC supplier, 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
[[Page 32216]]
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
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 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, an asthmatic, expressed concern that the discontinuation of
inhalers containing albuterol will leave no alternatives for asthmatics
who 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, 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 its 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 urged EPA to take steps to redistribute them.
Second, the commenter asserted that the Montreal Protocol and the Act
support the ``reallocation'' of existing CFC stockpiles before new
essential use allowances are allocated. 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 the Montreal Protocol supports compelling U.S. companies
with excess CFCs to sell their stockpiles to the U.S. Government for
reallocation.
Furthermore, the commenter argued that the Act, 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 informed EPA that consistent with
[[Page 32217]]
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 ODSs,
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. The commenter's
recommendation about redistribution of excess CFCs 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 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 their
proper use, and in approving transfers between domestic MDI
manufacturers, EPA requires the companies involved to certify that the
MDIs produced with the transferred essential use CFCs 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
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's 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 allocations in
light of Schering-Plough's October 13, 2006 announcement that it would
end 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.
With Schering-Plough's announcement, EPA and FDA expected
[[Page 32218]]
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 months leading up to December 31, 2008, when
all sales of CFC albuterol MDIs must cease. FDA has informed EPA that
based on information it 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.
Therefore 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 from Paragraph 1 of Decision XVIII/10
in Paragraph 3 of Decision XVIII/7 indicates that Parties did not
believe that the plain intent of Decision 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 applied 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 preceding paragraphs, FDA
determined, based on additional information received, that essential
use allowances should 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 represented 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 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-albuterol MDIs would deprive low-income
asthma sufferers of access to inhalers, potentially forcing uninsured
patients 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 not all formulations of HFA albuterol
might be available in sufficient supplies. The commenter also asserted
[[Page 32219]]
that HFA inhalers differ from CFC 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 provides for 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 covered by 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' Web sites.
Advocacy and non-profit groups have been pursuing education and
outreach efforts in preparation for the December 31, 2008 phaseout of
CFC-albuterol inhalers. They 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 supported 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
the December 31, 2008 effective date of non-essentiality of CFC-
albuterol MDIs 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 alternatives to CFC-albuterol MDIs were 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 affect patients' ability 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).
One commenter stated that based on current market conditions, it
believes that the total supply of albuterol MDIs (both HFA and CFC
inhalers) in the market should continue to meet demand during the
transition to HFA. The commenter noted that it has significantly
increased the amount of HFA albuterol inhalers that it produces, and
that it is in the position to increase its supply further if the need
arises. It further noted that based on publicly available data, it
appears that another HFA albuterol inhaler manufacturer has also
increased supply of its HFA albuterol inhaler. Lastly, the commenter
stated that its communications from FDA indicate that FDA, based on
discussions with all manufacturers of albuterol inhalers, is not
anticipating near-or medium-short-term shortages of
[[Page 32220]]
albuterol MDIs. In this regard, the commenter argued that there is no
need for incremental CFC-based albuterol MDIs beyond the previously
approved 2006 CFC allocations to meet overall albuterol demand in the
United States.
Two commenters supported EPA's proposed allocation and asserted
that a gradual transition from CFC albuterol to HFA albuterol would
benefit patients. One commenter 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 would benefit patients by smoothing
the transition to alternatives.
One commenter supported the proposed allocation because it provided
for a timetable that would enable CFC albuterol supplies to be drawn
down while ensuring a steady, reliable supply of HFA product. The
commenter stated 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
noted 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 sent 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
------------------------------------------------------------------------
2007 Quantity
Company Chemical (metric tons)
------------------------------------------------------------------------
(i) Metered Dose Inhalers (for oral inhalation) for Treatment of Asthma
and Chronic Obstructive Pulmonary Disease
------------------------------------------------------------------------
Armstrong Pharmaceuticals........ CFC-114 (production 22.4
of epinephrine
MDIs only).
Inyx (Aventis)................... CFC-11 or CFC-12 or 39.6
CFC-114.
3M Pharmaceuticals............... CFC-11 or CFC-12 or 65.0
CFC-114.
Wyeth............................ CFC-11 or CFC-12 or 40.0
CFC-114.
------------------------------------------------------------------------
IV. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
Under Executive Order (EO) 12866 (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
[[Page 32221]]
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. 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), Public
Law 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.
[[Page 32222]]
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 a not ``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 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 June 12, 2007.
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.
VI. 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 June 12, 2007. 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
Environmental protection, Administrative practice and procedure,
Air pollution control, Chemicals, Exports, Imports, Ozone, Reporting
and recordkeeping requirements.
Dated: June 6, 2007.
Stephen L. Johnson,
Administrator.
0
40 CFR Part 82 is amended as follows:
PART 82--PROTECTION OF STRATOSPHERIC OZONE
0
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
0
2. Section 82.8 is amended by revising the table in paragraph (a) to
read as follows:
Sec. 82.8 Grants of essential use allowances and critical use
allowances.
(a) * * *
Table I.--Essential Use Allowances for Calendar Year 2007
------------------------------------------------------------------------
2007 Quantity
Company Chemical (metric tons)
------------------------------------------------------------------------
(i) Metered Dose Inhalers (for oral inhalation) for Treatment of Asthma
and Chronic Obstructive Pulmonary Disease
------------------------------------------------------------------------
Armstrong Pharmaceuticals........ CFC-114 (production 22.4
of epinephrine
MDIs only).
Inyx (Aventis)................... CFC-11 or CFC-12 or 39.6
CFC-114.
3M Pharmaceuticals............... CFC-11 or CFC-12 or 65.0
CFC-114.
Wyeth............................ CFC-11 or CFC-12 or 40.0
CFC-114.
------------------------------------------------------------------------
* * * * *
[FR Doc. E7-11319 Filed 6-11-07; 8:45 am]
BILLING CODE 6560-50-P