ECONOMIC IMPACT ANALYSIS of

New Single-Sheet Format for U.S. Official Order Form for Schedule I and II Controlled Substances (DEA Form 222)

[Docket No. DEA-453]

Drug Enforcement Administration U.S. Department of Justice

July 2018

TABLE OF CONTENTS

1. INTRODUCTION .............................................................................................................................................. 3 2. REGULATORY ANALYSES INVESTIGATED ........................................................................................... 3

2.1 EXECUTIVE ORDERS 12866 AND 13563 ........................................................................................................... 3 2.2 REGULATORY FLEXIBILITY ACT ...................................................................................................................... 4 2.3 UNFUNDED MANDATES REFORM ACT ............................................................................................................. 5 2.4 CONGRESSIONAL REVIEW ACT ........................................................................................................................ 6

3. ANTICIPATED ECONOMIC IMPACT OF REGULATORY ACTION .................................................... 6 3.1 KEY PROVISIONS OF PROPOSED RULE .............................................................................................................. 6

3.1.1 New Single-Sheet Format for DEA Form 222 ....................................................................................... 6 3.1.2 Clarify Who Can Issue the Power of Attorney That Is Required for Others to Sign DEA Order Form 8

3.2 COST OF THE RULE ........................................................................................................................................... 9 3.2.1 Cost and Cost Savings Associated with New Single-Sheet Format for DEA Form 222 ....................... 9 3.2.2 Cost Associated with Clarification of Who Can Issue the Power of Attorney That Is Required for Others to Sign DEA Order Form ....................................................................................................................... 22

3.3 AFFECTED ENTITIES AND SMALL ENTITIES .................................................................................................... 22 3.3.1 Number of Occurrences and Affected Parties to Transactions ............................................................ 23 3.3.2 Number of Affected Entities ................................................................................................................ 23 3.3.3 Number of Small Entities .................................................................................................................... 26

3.4 IMPACT ON SMALL ENTITIES .......................................................................................................................... 28 3.4.1 Criteria for “Significant” Economic Impact ........................................................................................ 28 3.4.2 Analysis ............................................................................................................................................... 28

4. ECONOMIC ANALYSIS RESULTS ............................................................................................................. 30 4.1 EXECUTIVE ORDERS 12866 AND 13563 ......................................................................................................... 30 4.2 REGULATORY FLEXIBILITY ACT .................................................................................................................... 30 4.3 UNFUNDED MANDATES REFORM ACT ........................................................................................................... 33 4.4 CONGRESSIONAL REVIEW ACT ...................................................................................................................... 33

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1. INTRODUCTION

This document describes the economic analysis conducted by the Drug Enforcement

Administration (DEA) in support of the regulatory analysis statements published with the

proposed rule on “New Single-Sheet Format for U.S. Official Order Form for Schedule I and II

Controlled Substances (DEA Form 222); Minor Amendments.”

The DEA is proposing to amend its regulations to implement a new single-sheet format for

order forms (DEA Form 222) which are issued by DEA to DEA registrants to allow them to

order schedule I and/or II controlled substances. DEA published a notice of proposed

rulemaking about this new format in November 2007 but did not finalize it. Due to the passage

of time and procedural considerations, DEA is reissuing another notice of proposed rulemaking.

This proposal supersedes the November 2007 proposal. This proposed rule would allow the

continued use of the existing triplicate DEA Form 222 until a sunset date of two years after the

final rule becomes effective. DEA also proposes minor procedural changes, including among

other things, who can issue the power of attorney that is required for others to sign DEA Form

222.

Comments regarding this analysis may be submitted following the instructions contained in

the notice of proposed rulemaking.

2. REGULATORY ANALYSES INVESTIGATED

2.1 EXECUTIVE ORDERS 12866 AND 13563

Pursuant to Executive Order 12866 of September 30, 1993(58 FR 51735, Oct. 4, 1993), an

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

Regulatory Affairs (OIRA) a regulatory impact analysis for “significant regulatory actions.”

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[A] “significant regulatory action” [is] any regulatory action that is likely to result in a rulemaking that may: (1) have an annual effect on the economy of $100 million or more, or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in [Executive Order 12866].1

Executive Order 13563 of January 18, 2011 (76 FR 3821, Jan. 21, 2011) affirms and

supplements Executive Order 12866.

2.2 REGULATORY FLEXIBILITY ACT

The Regulatory Flexibility Act (RFA) requires agencies to consider the impact of their

regulatory proposals on small entities, analyze effective alternatives that minimize small entity

impacts, and make their analyses available for public comment.2 “The RFA does not seek

preferential treatment for small entities, require agencies to adopt regulations that impose the

least burden on small entities, or mandate exemptions for small entities. Rather, it requires

agencies to examine public policy issues using an analytical process that identifies, among other

things, barriers to small business competiveness and seeks a level playing field for small entities,

not an unfair advantage.”3

Three types of small entities are defined in the RFA: small businesses, small organizations,

and small governmental jurisdictions. Pursuant to 5 U.S.C 601(3), the term “small business” has

the same meaning as the term “small business concern” under section 3 of the Small Business

1 Exec. Order No. 12866, sec. 3(f), 58 FR 51735 (Sept. 30, 1993). 2 Pub. L. No. 96–354, 94 Stat. 1164 (1980) (codified at 5 U.S.C. 601–612). 3 SBA OFFICE OF ADVOCACY, A GUIDE FOR GOVERNMENT AGENCIES: HOW TO COMPLY WITH THE REGULATORY FLEXIBILITY ACT 1 (May 2012).

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Act. A small business concern is an enterprise that is “independently owned and operated” and

“not dominant in its field of operation.”4 Under the authority of the Small Business Act, the

Small Business Administration (SBA) Administrator has established standards to be used in the

determination of a small business concern.5 SBA size standards have been established for the

types of economic activity or industry utilizing the North American Industry Classification

System (NAICS) classifications. The SBA sets the maximum size standards—in millions of

dollars or number of employees—allowed for concerns (including their affiliates) to be

designated as small.6 5 U.S.C. 601(4) defines a small organization as any not-for-profit

enterprise that is independently owned and operated and not dominant in its field. 5 U.S.C.

601(5) defines small governmental jurisdictions as governments of cities, counties, towns,

townships, villages, school districts, or special districts with a population of less than 50,000.

Most DEA registrants are small businesses or employed by small businesses as defined under

the RFA; therefore, for the purposes of this analysis, the terms “business” and “entity” are used

interchangeably.

2.3 UNFUNDED MANDATES REFORM ACT

The Unfunded Mandates Reform Act (UMRA) was enacted to avoid imposing unfunded

Federal mandates on State, local, and tribal governments (SLTGs), or the private sector.7 Most

of UMRA’s provisions apply to proposed and final rules:

• for which a general notice of proposed rulemaking (NPRM) was published, and

4 15 U.S.C. 632 (Jan. 2011). 5 Id.; See also SIZE STANDARDS DIVISION, OFFICE OF GOV’T CONTRACTING & BUSINESS DEVELOPMENT, SBA SIZE STANDARDS METHODOLOGY (April 2009) (available at https://www.sba.gov/sites/default/files/size_standards_methodology.pdf) (describing SBA methodology for establishing and adjusting its small business size standards pursuant to the Small Business Act and related legislative guidelines). 6 13 C.F.R. 121.201 (2014). 7 Pub. L. No. 104–4, 109 Stat. 48 (1995) (codified at 2 U.S.C. 1501 et seq.).

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• that include a Federal mandate that may result in the expenditure of funds by SLTGs,

in the aggregate, or by the private sector of $100 million or more in any one year,

adjusted for inflation.

2.4 CONGRESSIONAL REVIEW ACT

Under the Congressional Review Act (CRA), a rule generally cannot take effect until the

agency submits a rule report to each House of Congress and to the Comptroller General of the

United States (head of the United States Government Accountability Office).8 Rules not

considered “major” under the CRA may take effect as they otherwise would under other

applicable law once a rule report is submitted. However, “any rule for which an agency for good

cause finds * * * that notice and public procedure thereon are impracticable, unnecessary, or

contrary to the public interest, shall take effect at such time as the Federal agency promulgating

the rule determines.” 5 U.S.C. 808(2). A rule is “major” if it results in an annual effect on the

economy of $100 million or more; a major increase in costs or prices; or significant adverse

effects on competition, employment, investment, productivity, or the ability of United States

companies to compete with foreign companies.

3. ANTICIPATED ECONOMIC IMPACT OF REGULATORY ACTION

3.1 KEY PROVISIONS OF PROPOSED RULE

3.1.1 New Single-Sheet Format for DEA Form 222

Whenever a DEA registrant wishes to acquire a schedule I and/or II controlled substance,

that registrant must complete the order form, pursuant to the form instructions, to include the

name and address of the supplying DEA registrant, the date requested, the number of packages

8 Pub. L. No. 104–121, sec. 251, 110 Stat. 847 (1996) (codified at 5 U.S.C. 801–808).

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of controlled substance(s) ordered, the size of the package of the controlled substance(s) ordered,

and the name of the controlled substance(s) ordered.

Under the current procedures outlined in 21 CFR 1305.13(a), (b), (d), and (e), the purchaser

retains one copy (Copy 3) of the triplicate form and sends two copies (Copy 1 and Copy 2) to the

supplier so that the order for a controlled substance can be filled. The supplier completes the

form by entering the actual number of packages of the controlled substance(s) shipped and the

actual date shipped. The supplier retains one copy (Copy 1) of the order form sent to him/her by

the purchaser, and sends the other copy (Copy 2) of the order form to the DEA Special Agent in

Charge in the area where the supplier is located. Upon receiving the controlled substance(s), the

purchaser writes the number of packages of the controlled substance(s) ordered which are

actually received and the date received on its copy (Copy 3). Under current 21 CFR 1305.17(a)

through (c), both the purchaser and the supplier must preserve their respective copy of the order

form for two years and make it available to officials of the DEA for inspection, if requested.

The DEA is proposing to update the format and retention requirements of the DEA Form

222, transitioning from the triplicate format to a single-sheet format (hereafter referred to as the

new form). In executing a transaction of a schedule I or II controlled substance, a DEA

registrant will process the new form in a similar manner to the processing of the current three-

part carbon form. The proposed changes include:

• Adding the use of a computer printer to the list of acceptable methods for filling out a

DEA Form 222 (in addition to the existing typewriter, pen, or indelible pencil).

• Allowing registrants to retain a readily retrievable electronic or hard copy of the new

form for two years, rather than storing the physical Copy 3 or Copy 1.

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• Removing the requirement that registrant suppliers forward a copy to the DEA field

office at the close of the month during which the order is filled if the registrant reports

acquisition/distribution transactions to the Automation of Reports and Consolidated

Orders System (ARCOS) under § 1304.33(c). Registrant suppliers that do not report to

ARCOS (such as a practitioner) would still be required to submit a copy of the original

DEA Form 222 to DEA; however, these suppliers would have the option of submitting

the copy by mail, fax, or email.

• Discontinuing the accepted use of the triplicate form approximately two years after the

new form is made available.

DEA will continue to preprint and issue the new forms.

3.1.2 Clarify Who Can Issue the Power of Attorney That Is Required for Others to Sign

DEA Order Form

Pursuant to § 1305.05(a), a registrant may authorize one or more individuals, whether or not

located at his or her registered location, to issue orders for schedule I and II controlled

substances on the registrant’s behalf by executing a power of attorney (POA) for each such

individual, if the POA is retained in the files, with executed DEA Forms 222 where applicable,

for the same period as any order bearing the signature of the POA.

Currently under § 1305.05(d), a POA must be executed by the person who signed the most

recent new or renewal application for their DEA registration; the person to whom the POA is

being granted; and two witnesses. DEA proposes to modify this language to permit other

individuals to authorize the POA on behalf of the registrant and is similar to the language found

in 21 CFR 1301.13(j) regarding who can sign an application for a DEA registration. Under the

proposed language, a POA must be executed by the registrant, if an individual; by a partner of

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the registrant, if a partnership; or by an officer of the registrant, if a corporation, corporate

division, association, trust or other entity; the person to whom the POA is being granted; and two

witnesses.

3.2 COST OF THE RULE

The DEA examined how each provision of the proposed rule discussed above will impact the

DEA and registrants that may use order forms. Impacted registrants fall into one of three

categories: purchasers, dispensing suppliers and non-dispensing suppliers.

3.2.1 Cost and Cost Savings Associated with New Single-Sheet Format for DEA Form 222

Purchasers of Schedules I & II Controlled Substances

“Purchasers” are registrants authorized to handle Schedules I and II controlled substances

and are the originators of the order for those substances using a DEA Form 222 or electronic

ordering system pursuant to §1305.04. The provisions of the proposed rule and new form will

impact purchasers in the following ways:

1. Purchasers will be required to make a physical or electronic copy of the new form before

sending it to the supplier. This is a new requirement, as currently the purchaser tears off

Copy 3 of the triplicate form for their records after the required information is entered on

the form. The new single sheet version of Form 222 will be a more efficient and less

error prone ordering format for purchasers. The amount of transaction lines per page are

doubled compared to the current form allowing more orders per form, while upgrading

from carbon paper to high-quality security paper will eliminate the occurrences of form

failure.

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2. All registrants that use the new form may use a computer printer to fill in the required

information on the new form (in addition to the existing allowable methods of typewriter,

pen, or indelible pencil).

3. Purchasers will be allowed a two year transition period to request the new form from

DEA. Purchasers may continue to use their current supply of triplicate forms until then.

Rather than tearing off Copy 3 of the three-part carbon form and physically retaining it in

their files, purchasers (e.g. pharmacies, hospitals, clinics, researchers) will be required to make a

copy of the completed form and retain a readily retrievable hard copy or scanned electronic copy

for two years. Whether scanning electronically or making photocopies, this provision imposes a

new requirement on purchasers that previously were able to tear off the bottom copy of the

triplicate form.

DEA recognizes that there is a small cost in labor and materials to purchasers associated with

making and storing (either digitally or physically) copies of the new single sheet form. In

regards to storage costs, since DEA registrants are currently required to store their copies of

order forms, DEA assumes there will be no change in this cost once the rule is promulgated.

Also, the new form will double the amount of orders per page compared to the current triplicate

form (raising the amount of transactions from 10 per page to 20); increasing the efficiency of the

ordering process while decreasing the total number of forms that must be executed. Purchasers

also frequently report to the DEA instances of the triplicate carbon form failing in a variety of

circumstances. Given the fragility of the current order form, these instances are wide-ranging

but include failure to imprint legible writing on copies 2 and 3, and completed forms being

damaged when attempting to tear off the third copy of the triplicate. These circumstances result

in wasted time and effort as purchasers must repeat the order on a new form. The new single

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page form will be printed on high-quality security paper, and will have none of the drawbacks of

the current outdated form.

DEA estimates 4.4 million order forms are executed on an annual basis. DEA estimates that

the number of forms executed per year will decrease to 3.3 million forms, a 25% decrease, due to

the increase in the number of lines per form. While DEA does not have data on how many

ordering lines registrants currently fill up on the triplicate form, DEA considered two extreme

scenarios. Scenario 1: purchasers always order less than 10 line items at a time (requiring one

triplicate). This would result in no (0%) reduction in the number of forms for the new single

sheet format. Scenario 2: purchasers always order more than 10 (or in far excess of 10) line

items, effectively reducing the number of required new forms by 50%. DEA chose the mid-

point of these two extreme scenarios (the mid-point of 0% and 50% is 25%), resulting in a

reduction of executed DEA Form 222s from 4.4 million to 3.3 million per year. The DEA

requests public comment on this estimated reduction of number of forms executed. Additionally,

due to the increased ordering efficiency of the new form discussed previously, and the enabling

provision allowing the use of a computer printer discussed later in this section, DEA estimates

the time to complete each new form (with 20 lines) will remain the same as it is for the current

triplicate form with 10 lines. DEA considers this estimate to be conservative after accounting for

the confluence of factors that will increase the efficiency of use for registrants once this rule is

promulgated. The cost savings resulting from this efficiency gain is discussed in the next

paragraph. In order to estimate the copying and storage cost to purchasers associated with the

new form, DEA used the loaded median hourly wage rate9 of $21.97 for Pharmacy Technicians10

9 Loaded median hourly wage includes salary of $15.26 plus 43.7% benefits premium. Benefits premium estimated using Bureau of Labor Statistics guidance found here: https://www.bls.gov/news.release/pdf/ecec.pdf 10 https://www.bls.gov/oes/current/oes292052.htm

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(a representation of the labor cost of employee most likely to be making copies on behalf of a

purchaser), and an approximation of 30 seconds to make one copy. Using these figures, DEA

estimates that the cost to copy one order form is $0.18 (rounded). Therefore, the total labor cost

to purchasers to make copies of 3.3 million order forms annually is $604,296. In order to

estimate the material cost of making these copies, DEA multiplied the quoted median per-page

printing rate of $0.0395 of a major office supply and printing services firm by 3.3 million copies,

resulting in a total material cost of $130,350. The per-page printing rate of $0.0395 includes the

cost of ink, equipment maintenance, employee labor, and some profit margin. Therefore, the

total estimated cost to purchasers is $734,646, and is summarized in the table below:

Table 1. Cost of Copying New Form for Purchasers of Schedule I/II Controlled Substances Expense Amount

Labor $604,296 Material & Equipment $130,350 Total $734,646

In order to quantify the cost savings realized by purchasers due to the gain in efficiency and

elimination of instances of form failure, DEA utilized cost burden estimates from the most recent

Form 222 information collection request in 2016.11 DEA’s estimate of the average time to fill

out, process and mail the paper Form 222 to DEA in 2016 was 15 minutes per form. While the

total number of paper ordering forms is expected to decrease by 25% once the new format is

implemented due to the gains in efficiency discussed earlier, the total amount of controlled

substances ordered with the new forms will remain unchanged. DEA expects that the efficiency

gains of the new format (including the ability to utilize a computer printer) will allow the same

11 OMB Approval # 1117-0010, U.S. Official Order Forms for Schedules I and II Controlled Substances (DEA Form 222). Generally, the information collection request, which includes estimate of burden, is renewed every three years after 60-day and 30-day public notice and comment periods, and with final approval from OMB.

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number of transactions to be executed on fewer forms in the same amount of time per form,

resulting in a reduction in labor burden hours for registrants. For these reasons, this analysis will

continue to utilize the conservative 15 min time estimate codified in the 2016 information

collection. However, DEA is requesting comment from the public regarding this time estimate.

DEA calculated the burden hour reduction by using the average of the loaded median hourly

wage rates for pharmacists and purchasing managers ($82.89), occupations that are

representative of the types of employees that fill in the ordering information on the Form 222.12

There are currently 4.4 million order forms executed on an annual basis, requiring 1.1 million

hours to complete. Once this rule is promulgated, and the new single page form is implemented,

DEA estimates that the total amount of forms executed per year will decrease to 3.3 million,

requiring 825,000 hours to complete. This is a reduction in annual labor burden of 275,000

hours results in a cost savings of $22,794,750. These calculations are outlined in the table

below:

Table 2. Reduction in Labor Burden Resulting From New Single Sheet Format Current Form New Single Sheet

Form

Difference

Number of forms executed per year 4,400,000 3,300,000 1,100,000 Time to complete one form (hours) 0.25 0.25 Total time to complete all forms (hours)

1,100,000 825,000 275,000

Hourly rate $57.680 Load 43.7% Loaded hourly rate $82.89 Labor Burden $22,794,750 Cost (Savings) due to labor burden reduction

($22,794,750)

12 The average of the median hourly wages for 11-3061 Purchasing Managers and 29-1051 Pharmacists is $57.68. Applying a 43.7% benefits premium brings the loaded hourly rate to $82.89. Median hourly wage rates pulled from the Bureau of Labor Statistics, May 2017 National Occupational Employment and Wage Estimates, United States (http://www.bls.gov/oes/current/oes_nat.htm). Benefits premium estimated using Bureau of Labor Statistics guidance found here: https://www.bls.gov/news.release/pdf/ecec.pdf.

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The DEA anticipates some purchasers would take advantage of the enabling provision of the

proposed rule to use a computer printer for filling out the form based on their own assessment of

the cost and benefits of such an action. Unlike the current triplicate form, the new form does not

have interleaved carbon paper (requiring impact to copy to Copy 2 and Copy 3) and will be a

standard 8”x11” sized sheet, allowing the use of common office printers. While the DEA has no

basis to estimate how many purchasers would opt to use a computer printer to fill out the new

form, it is reasonable to assume that registrants that use the order forms infrequently, or process a

relatively small amount of forms would be less likely to employ this technology. For those

registrants that process a relatively large amount of order forms, they may find this method more

efficient, and are more likely to take advantage of this provision. The DEA has no basis to

estimate how many registrants might adopt the use of computer printers once this rule is

promulgated, however, there are clearly benefits (speed and increased efficiency) for those

registrants that choose to employ the computer printer to fill in the form.

The final provision of the proposed rule that will impact purchasers is the complete

discontinuation of the triplicate form approximately two years after this rule is promulgated.

Based on its knowledge of registrant business operations, DEA estimates that the vast majority

of registrants will not be impacted by this requirement, as most will exhaust their current supply

of triplicate forms and request new forms before the two year time period ends. For these

registrants, this will be part of normal business operations as the ordering process will not be

altered. DEA acknowledges that a small minority of registrants that use order forms very

infrequently will be required to order the new forms at the end of the two year period before they

have exhausted their current triplicate supply. While this will require those registrants to order

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their forms earlier than they otherwise would have, this action is still a normal part of their

business operations. The shift of the labor cost of ordering new forms from some future period to

the present will result in minimal cost.

In summary, DEA estimates that purchasers, combined, will incur an annual cost of $734,646

related to making copies of the new single sheet form, while they will realize an annual cost

savings of $22,794,750 due to the increased efficiency of the new form. This results in a net cost

savings of $22,060,104.

Dispensing Suppliers of Schedules I & II Controlled Substances “Dispensing suppliers” are individual or institutional practitioners (e.g. physicians,

pharmacies, hospitals, clinics, etc.) that are registered to dispense a controlled substance and may

also distribute (without being registered to distribute) a quantity of such substance to another

practitioner or reverse distributer using either a DEA Form 222 or an electronic order pursuant to

§1307.11. The provisions of the proposed rule and new form will impact dispensing suppliers in

the following ways:

1. Allows the dispensing supplier to submit their copy of the order form to DEA via fax or

email, in addition to the current standard of mail submission, at the end of the month the

order was filled. This provision is only applicable to non-ARCOS reporting suppliers,

while registrants reporting transactions in ARCOS will no longer have to also submit

hard copies to the field office at all. Dispensing suppliers generally do not report to

ARCOS.

2. All registrants that use the new form may use a computer printer to fill in the required

information on the new form (in addition to the existing allowable methods of typewriter,

pen, or indelible pencil).

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Allowing dispensing suppliers the option to email or fax their copy of the order form in

addition to mailing will result in a cost savings to those registrants. Current regulations require

that dispensing suppliers ship Copy 2 of the triplicate form to their field office at the end of the

month in which the order was filled. For the purposes of this analysis, the DEA assumes that all

dispensing suppliers will employ the least costly method of electronic or fax submission rather

than physical mail. The marginal cost of email transmission of the forms is effectively zero,13

while transmission via mail is priced by package weight.

In order to estimate the cost savings, DEA first needed to estimate the number of forms that

will no longer be mailed to DEA field offices. DEA conducted a survey of 20 field offices in six

of its divisions – Dallas, Denver, Miami, New Orleans, Seattle, and Washington –collecting

information on the number of DEA form 222’s received by the office in a one month period and

the business activity of the submitter. After excluding data from distributers, manufacturers, and

other ARCOS-reporting entities that will no longer be required to submit copies at all under the

proposed rule, DEA was able to estimate the number of forms received from all non-ARCOS

reporting suppliers. A total of 10,333 forms were received from 3,810 registrants. Based on the

total population of 380,853 practitioners for the six divisions, the sample of 10,333 forms

represents a 0.02708 form-to-practitioner ratio per month in the six divisions from which data

were collected. DEA considers this sample to be broadly representative of the nation-wide

population of practitioners given the size and geographic distribution of the divisions polled.

The ratio was then multiplied by the entire population of 1,750,990 practitioners, giving an

estimated total of 47,409 forms mailed to DEA field offices from dispensing suppliers per

month.

13 Rao, Justin M., and David H. Reiley. 2012. "The Economics of Spam." Journal of Economic Perspectives, 26 (3): 87-110.

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DEA further analyzed the collected data to estimate the number of envelopes shipped by

dispensing suppliers. A total of 3,810 (out of a population of 380,853) registrants shipped the

10,333 forms during the one-month sample period. Dividing the sample population (3,810) by

the total population (380,853) gives a ratio of 0.218. Dividing the sample population by this

ratio gives an estimated 17,480 practitioners mailing 17,480 shipments containing an estimated

47,409 forms from dispensing suppliers to DEA field offices on a monthly basis. Multiplying

the previous estimates by 12 yields yearly figures of 209,767 shipments containing 568,908

forms from dispensing suppliers. DEA then assessed the shipping cost of these forms using

FedEx shipping rates14 of $8.15 per envelope, given that dispensing suppliers tend to ship small

quantities of forms, resulting in a total yearly shipping cost of $1,709,601.

Finally, DEA estimated the labor cost to prepare and ship the 209,767 packages using the

loaded median hourly wage rate of $21.9715 for Pharmacy Technicians (a representation of the

type of employee most likely to prepare and ship the forms on behalf of the dispensing supplier),

and an approximation of 15 minutes to prepare the package, DEA estimates that the cost to send

one package of order forms to a DEA field office to be $5.49. Therefore, the total labor cost to

dispensing suppliers to send order forms to DEA field offices annually is $1,152,376.

Both the labor and shipping cost calculations discussed above will become a cost savings for

dispensing suppliers under the proposed rule, as DEA assumes they will immediately transition

to email submission of the order forms. The total cost savings are summarized in table 3 below:

14 FedEx Envelope, FedEx Express Saver, Regional Zone (Zone 3-4) 15 See note 9.

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Table 3. Annual Shipping and Labor Cost Savings to Dispensing Suppliers from Allowing Email and Fax Submission of Completed Order Forms to DEA Field Offices

Expense Amount

Shipping & Material Cost Savings $1,709,601 Labor Cost Savings $1,152,376 Total Cost Savings $2,861,977

As discussed above for purchasers, the DEA anticipates some dispensing suppliers would take

advantage of the enabling provision of the proposed rule to use a computer printer for filling out

the form based on their own assessment of the cost and benefits of such an action. While the

DEA has no basis to estimate how many dispensing suppliers would opt to use a computer

printer to fill out the new form, it is reasonable to assume that registrants that use the order forms

infrequently, or process a relatively small amount of forms would be less likely to employ this

technology. For those registrants that process a relatively large amount of order forms, they may

find this method more efficient, and are more likely to take advantage of this provision. The

DEA has no basis to estimate the adoption rate or quantify the benefit of this provision, however,

there are clearly benefits (speed and increased efficiency) for those registrants that choose to

employ the computer printer to fill in the form.

Non-Dispensing Suppliers of Schedules I & II Controlled Substances

“Non-dispensing suppliers” are persons registered with the DEA as manufacturers and

distributors of controlled substances listed in Schedules I or II. The provisions of the proposed

rule and new form will impact non-dispensing suppliers in the following ways:

1. ARCOS-reporting suppliers are now no longer required to ship their copies of the order forms to

their DEA field office at the end of each month. Based on its knowledge of registrant operations,

DEA believes that the vast majority of manufacturers and distributers report to ARCOS, and

therefore, will be impacted by this provision.

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2. All registrants that use the new form may use a computer printer to fill in the required

information on the new form (in addition to the existing allowable methods of typewriter, pen, or

indelible pencil).

Removing the requirement that non-dispensing suppliers (e.g. manufacturers, distributers,

reverse distributers) submit copies of order forms for actual orders filled on a monthly basis will

result in a cost savings to those registrants. The DEA determined that since all non-dispensing

suppliers must report filled orders directly to ARCOS, also requiring them to mail order form

copies to their field office is duplicative and unnecessary.

DEA used a similar analytic approach as discussed for dispensing-suppliers in the previous

section to estimate the cost savings to non-dispensing suppliers. DEA data show that 4.4 million

order forms are currently processed on an annual basis. Current regulations stipulate that Copy 2

of the triplicate form for all 4.4 million orders must be mailed to DEA field offices by non-

dispensing suppliers. DEA’s analysis for dispensing suppliers yielded an estimation of 568,908

of 4.4 million order forms filled and shipped to DEA field offices. This suggests that the

remaining 3,831,092 order forms are shipped by non-dispensing suppliers. DEA registrant data

show that there are 964 non-dispensing supplier registrants, and since all of them must ship their

filled order forms on a monthly basis, this means there are 11,568 shipments containing

3,831,092 completed order forms per year. Using UPS Ground shipping rates of $9.73 for a 2

lbs. package16, DEA calculates the annual shipping cost to non-dispensing suppliers to be

$112,557.

16 UPS Ground, Zone 2, 2 lbs. An average of 331 forms (3,831,092/11,568=331) are sent per package. DEA estimates that the weight of 331 triplicate Copy 2’s being shipped is 1.656 lbs. DEA conservatively rounds this estimate up to 2 lbs. per package.

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DEA estimated the labor cost to prepare and ship the 11,568 packages using the loaded

median hourly wage rate of $21.97 for Pharmacy Technicians (a representation of the type of

employee most likely to prepare and ship the forms on behalf of the dispensing supplier), and an

approximation of 30 minutes to prepare the package, DEA estimates that the cost to send one

package of order forms to a DEA field office to be $10.99. Therefore, the total labor cost to non-

dispensing suppliers to send order forms to DEA field offices annually is $127,100.

Both the labor and shipping cost calculations discussed above will become a cost savings for

non-dispensing suppliers under the proposed rule, as DEA is completely removing the

requirement that they ship copies of completed order forms to DEA field offices. The total cost

savings are summarized in table 4 below:

Table 4. Annual Shipping and Labor Cost Savings to Non-Dispensing Suppliers from Removing Requirement to Ship Order Forms to DEA Field Offices

Expense Amount

Shipping & Material Cost Savings $112,557 Labor Cost Savings $127,100 Total Cost Savings $239,657

As discussed above for purchasers and dispensing suppliers, the DEA anticipates some non-

dispensing suppliers would take advantage of the enabling provision of the proposed rule to use a

computer printer for filling out the form based on their own assessment of the cost and benefits

of such an action. While the DEA has no basis to estimate how many non-dispensing suppliers

would opt to use a computer printer to fill out the new form, it is reasonable to assume that

registrants that use the order forms infrequently, or process a relatively small amount of forms

would be less likely to employ this technology. For those registrants that process a relatively

large amount of order forms, they may find this method more efficient, and are more likely to

take advantage of this provision. The DEA has no basis to estimate the adoption rate or quantify

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the benefit of this provision, however, there are clearly benefits (speed and increased efficiency)

for those registrants that choose to employ the computer printer to fill in the form.

DEA

The new single-sheet form will benefit DEA by reducing costs and streamlining the process

of producing and distributing the DEA 222 form. The equipment used to print the current

interleaved carbon form is technologically obsolete, and finding replacement parts and

maintaining the equipment is costly, difficult, and time-consuming. DEA must also employ

custom envelopes to send the triplicate forms to registrants. Adoption of a modern secure

ordering form will allow the DEA to retire its antiquated equipment and materials in favor of any

general-use laser printer and commercially available security paper. The estimated costs of the

current format and proposed single sheet format are summarized and compared in Table 5.

Table 5. Comparison of DEA Production and Maintenance Expenses for Current and Proposed DEA Form 222 Format

Expenses Current Carbon-Based DEA Form 222

Proposed Single Sheet Form 222

Change

Cost of Forms: $255,861 $55,517 $(200,344) Mailing (Postage): $758,617 $241,378 $(517,239) Custom Envelopes $21,379 $10,682 $(10,697) Equipment Maintenance:

$32,874 - $(32,874)

Equipment cost per year:

$18,243 - $(18,243)

Total: $1,185,643 $406,246 $(779,397)

The net yearly cost savings to DEA of adopting the new single sheet format is $779,397.

Total Economic Impact

The estimated total annual economic impact resulting from the promulgation of this rule

is a cost savings of $25,941,134 and summarized in Table 6 below.

Table 6. Total Annual Economic Impact of the Rule Affected Entity Cost or (Cost Savings)

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Purchasers ($22,060104) Non-Dispensing Suppliers ($239,657) Dispensing Suppliers ($2,861,977) DEA ($779,397) Net Cost Savings ($25,941,134)

3.2.2 Cost Associated with Clarification of Who Can Issue the Power of Attorney That Is

Required for Others to Sign DEA Order Form

Currently under § 1305.05(d), a power of attorney must be executed by the person who

signed the most recent new or renewal application for their DEA registration; the person to

whom the power of attorney is being granted; and two witnesses. Under the proposed rule, a

power of attorney must be executed by the registrant, if an individual; by a partner of the

registrant, if a partnership; or by an officer of the registrant, if a corporation, corporate division,

association, trust or other entity; the person to whom the power of attorney is being granted; and

two witnesses. This provision of the rule simply clarifies the person or people (depending on the

legal classification of the business) that may issue a power of attorney to another individual

within the company to sign a DEA 222 order form. This provision in no way restricts the current

issuer of a power of attorney, and in most cases expands the number and category of people

within a company that may issue one. Therefore, this provision of the proposed rule will have no

economic impact on registrants or the DEA.

3.3 AFFECTED ENTITIES AND SMALL ENTITIES

The DEA estimated the number of executed DEA Form 222’s, the corresponding number of

parties to the transactions, the corresponding number of entities, and the corresponding number

of entities that are small entities. Parties to these transactions include pharmacies, hospitals,

clinics, manufacturers and distributors.

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3.3.1 Number of Occurrences and Affected Parties to Transactions

The DEA estimates 4,426,422 DEA Form 222’s were executed in 2017 by a combined

125,435 registrants.17 Those 125,435 registrants are broken down by business activity in Table 7

below.

Table 7. Affected Registrants by Business Activity Business Activity Number of Registrations

Suppliers of Schedule I & II Controlled Substances Manufacturers and Distributers 964

Purchasers of Schedule I & II Controlled Substances*

Pharmacies 71,979

Hospitals and Clinics 16,848 Practitioners 35,644

Total 125,435 Source: DEA, April 2017. * The DEA assumes the estimated 17,480 dispensing suppliers from section 3.2.1 are also “Purchasers.”

Due the nature of their business, the DEA assumes all registered manufacturers and

distributors (964), pharmacies (71,979), and hospitals and clinics (16,848) authorized to handle

schedule I or II controlled substances also handle DEA Form 222. Because only a small fraction

of practitioners order controlled substances on a regular basis, the estimated number of

Practitioners using DEA Form 222 (35,644) is the total (125,435), net of registered

manufacturers and distributors (964), pharmacies (71,979), and hospitals and clinics (16,848).

3.3.2 Number of Affected Entities

RFA requirements and SBA size standards are applicable to entities and businesses. It is

common for businesses and individuals to hold more than one registration, such as where a

registrant handles controlled substances at multiple locations or engages in multiple types of

17 The “125,435 registrants” is based on count of DEA Form 222 respondents for the “Supporting Statement for Paperwork Reduction Act Submissions U.S. Official Order Forms for Schedules I and II Controlled Substances (DEA Form 222), OMB Approval # 1117-0010.” Approved 11/3/2016.

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DEA registered activities. The DEA does not, in the general course of business, collect or

otherwise maintain information regarding associated or parent organizations holding multiple

registrations. Therefore, the DEA needs some way of correlating and applying the parameters of

the RFA and corresponding SBA size standards to DEA registrations (i.e., develop a relationship

between the number of registrations and the number of entities).

To estimate the number of affected entities, the DEA first determined the NAICS

classification codes that most closely represent each of the affected business activities, then

researched economic data for those codes. The source of the economic data is the U.S. Census

Bureau, Statistics of U.S. Businesses (SUSB). The business activities and their corresponding

representative NAICS codes are listed in table 8 below.

Table 8. Business Activities and Representative NAICS Codes

Business Activities NAICS Codes Manufacturer

325411 - Medicinal and Botanical Manufacturing 325412 - Pharmaceutical Preparation Manufacturing

Distributor 424210 - Drugs and Druggists’ Sundries Merchant Wholesalers

Pharmacies 446110 - Pharmacies and Drug Stores

Hospitals and Clinics

622110 – General Medical and Surgical Hospitals 622210 - Psychiatric and Substance Abuse Hospitals 621491 - HMO Medical Centers

Practitioners

621111 - Offices of Physicians (except Mental Health Specialists) 621112 - Offices of Physicians, Mental Health Specialists

621210 - Offices of Dentists 621310 - Offices of Chiropractors 621320 - Offices of Optometrists 621330 - Offices of Mental Health Practitioners (except Physicians)

From the SUSB data, the number of firms and establishments by NAICS codes is listed in

table 9. For the purposes of this analysis, the term “firm” as defined in the SUSB is used

interchangeably with “entity” as defined in the RFA.

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Table 9. Firm-to-Establishment Ratio or Each NAICS Code

NAICS Code Number of firms

Number of establishments

Firm to establishment

ratio 325411-Medicinal and Botanical Manufacturing 404 439 325412-Pharmaceutical Preparation Manufacturing 957 1,208

Total Manufacturer 1,361 1,647 0.8264 424210-Drugs and Druggists' Sundries Merchant Wholesalers 6,739 9,964

Total Distributor 6,739 9,964 0.6763 446110 - Pharmacies and Drug Stores 19,550 44,130

Total Pharmacy 19,550 44,130 0.4430 622110 – General Medical and Surgical Hospitals 2,694 5,361 622210 - Psychiatric and Substance Abuse Hospitals 417 635 621491 - HMO Medical Centers 113 812

Total Hospitals and Clinics 3,224 6,808 0.4736 621111 - Offices of Physicians (except Mental Health Specialists) 167,642 214,228 621112 - Offices of Physicians, Mental Health Specialists 10,614 10,867 621210 - Offices of Dentists 125,904 134,631 621310 - Offices of Chiropractors 38,732 39,129 621320 - Offices of Optometrists 19,964 21,885 621330 - Offices of Mental Health Practitioners (except Physicians) 20,782 21,771

Total Practitioners 383,638 442,511 0.8669 Source: SUSB.18 (Accessed 5/1/2017)

The calculated firm-to-establishment ratio was applied to the corresponding business activity

to estimate the number of entities. For example, the firm-to-establishment ratio of 0.8264 is

applied to the affected 406 manufacturer registrations for an estimated 336 entities; and the firm-

to-establishment ratio of 0.6763 was applied to the affected 558 distributer registrations for an

estimated 378 entities. In total, the 125,435 (406 manufacturer, 558 distributor, 71,979

pharmacies, 16,848 hospitals and clinics and 35,644 practitioners) affected

18 Data for NAICS codes related to Manufacturer, Distributor, Pharmacy, Hospitals & Clinics and Practitioners are based on the 2014 SUSB Annual Datasets by Establishment Industry, December 2016. SUSB annual or static data include number of firms, number of establishments, employment, and annual payroll for most U.S. business establishments. The data are tabulated by geographic area, industry, and employment size of the enterprise. The industry classification is based on 2012 North American Industry Classification System (NAICS) codes.

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registrations/establishments represent 71,481 entities. Table 10 below summarizes the number

of entities for each business activity.

Table 10. Number of Entities by Business Activity

Business Activity NAICS Code

Number of registrations/

establishments

Entity to establishment

ratio

Number of entities

Manufacturers 325411 325412 406 0.8264 336

Distributors 424210 558 0.6763 378

Pharmacies 446110 71,979 0.4430 31,887

Hospitals and Clinics 622110 622210 621491

16,848 0.4736 7,980

Practitioners

621111 621112 621210 621310 621320 621330

35,644 0.8669 30,900

Grand Total 125,435 71,481 3.3.3 Number of Small Entities

To estimate the number of affected entities that are small entities, the DEA compared the

SUSB data for the number of firms in various firm size ranges with SBA size standards for each

of the representative NAICS codes from table 9. The SBA size standard is the firm size based on

the number of employees or annual receipts depending on industry. The SBA size standards for

each of the related NAICS codes are based on the number of employees or annual receipts as

listed in table 11 below.

Table 11. SBA Size Standards

NAICS Codes Description

Size Standards ($ million)

Size Standards (number of employees)

325411 Medicinal and Botanical Manufacturing 1,000

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NAICS Codes Description

Size Standards ($ million)

Size Standards (number of employees)

325412 Pharmaceutical Preparation Manufacturing 1,250 424210 Drugs and Druggists’ Sundries Merchant Wholesalers 250 446110 Pharmacies and Drug Stores 27.5 622110 General Medical and Surgical Hospitals 38.5 622210 Psychiatric and Substance Abuse Hospitals 38.5 621491 HMO Medical Centers 32.5 621111 Offices of Physicians (except Mental Health Specialists) 11 621112 Offices of Physicians, Mental Health Specialists 11 621210 Offices of Dentists 7.5 621310 Offices of Chiropractors 7.5 621320 Offices of Optometrists 7.5 621330 Offices of Mental Health Practitioners (except

Physicians) 7.5

Source: SBA, October 01, 2017. (accessed 5/1/2018)

The firms in each size range below the SBA size standard are small firms. The number of

firms below the SBA size standard was added to determine the total number of small firms in

each NAICS code. Then, the number of small firms was divided by the total number of firms to

estimate the “percent small firms” (i.e., the percent of total firms that are small firms). The

percent small firms were applied to the estimated number of entities for each business activity to

estimate the number of affected entities that are small entities. The DEA estimates that 65,984

(92.3%) of the total 71,481 affected entities are small entities. The analysis is summarized in

table 12 below.

Table 12. Registration, Establishment, Entity, and Small Entity

Number of Registrations/

Establishments

Entity to establishment

ratio

Number of Entities

Percent Small

Entities

Number of Small Entities

Manufacturers 406 0.8264 336 92.7% 312 Distributors 558 0.6763 378 96.1% 364 Pharmacies 71,979 0.4430 31,887 97.9% 31,217 Hospitals and Clinics 16,848 0.4736 7,980 39.8% 3,716

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Number of Registrations/

Establishments

Entity to establishment

ratio

Number of Entities

Percent Small

Entities

Number of Small Entities

Practitioners 35,644 0.8669 30,900 98.3% 30,375

Total

125,435 71,481 65,984 Percent Small Entity 92.3%

3.4 IMPACT ON SMALL ENTITIES

To comply with the RFA, the DEA conducted a preliminary analysis to determine whether, if

promulgated, this rule will have a significant economic impact on a substantial number of small

entities.

3.4.1 Criteria for “Significant” Economic Impact

When there are no special considerations for “significant economic impact” or criteria

prescribed by external sources, the DEA uses revenue-based criteria of 3%. If the cost (or cost

savings) of the rule is greater than 3% of annual revenue, the rule has a “significant” economic

impact on the business.

3.4.2 Analysis

As described in section 3.2, this proposed rule will result in an annual net cost savings of

$25,941,134 for DEA registrants and the DEA. Purchasers of schedules I and II controlled

substances will realize an annual net cost savings of $22,060,104 after accounting for the cost of

the new requirement to make copies of the single page order forms, and the cost savings

associated with the increased efficiency of the new single sheet form. The purchaser category

mostly encompasses pharmacies, practitioners, hospitals and clinics. For the purposes of this

analysis, the DEA conservatively distributed the cost savings of $22,060,104 equally amongst

the 70,767 entities in the purchaser category, resulting in an average annual cost savings of $312

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per purchaser. 19 The annual revenue at which $312 would be 3% is $10,400. The DEA

estimates all purchaser have annual revenue in excess of $10,400; and therefore, $312 in annual

cost savings is less than 3% of revenue. Consequently, the conservatively estimated $312 annual

cost savings per entity is not a significant economic impact.

DEA also analyzed whether the cost savings of $239,657 would be significant for affected

non-dispensing supplier entities. Non-dispensing suppliers of schedules I and II controlled

substances, such as manufacturers and distributers, will be impacted by this cost savings due to

the removal of the requirement to mail copies of completed order forms to DEA field offices at

the end of the month the order is filled. The DEA conservatively distributed the cost savings of

$239,657 equally amongst the 714 entities in the non-dispensing supplier category, resulting in

an average annual cost savings of $336 per supplier. The annual revenue at which $336 would

be 3% is $11,200. The DEA estimates all non-dispensing suppliers have annual revenue in

excess of $11,200; and therefore, $336 in annual cost savings is less than 3% of revenue.

Consequently, the conservatively estimated $336 annual cost savings per entity is not a

significant economic impact.

Lastly, DEA analyzed whether the cost savings of $2,861,977 would be significant for

affected dispensing suppliers. Dispensing suppliers of schedules I and II controlled substances,

such as pharmacies, hospitals/clinics, and practitioners, are estimated to experience cost savings

due to the option to email or fax their copy of the order form to DEA in addition to the currently

required method of mailing to DEA. The DEA conservatively distributed the cost savings of

$2,861,977 equally amongst the estimated 17,480 dispensing suppliers, resulting in an average

annual cost savings of $164 per supplier. The annual revenue at which $164 would be 3% is

19 Distributing the cost savings equally amongst the 70,767 is conservative because smaller entities are expected to execute fewer order forms resulting in a lower-than-average impact.

30

$5,467. The DEA estimates all dispensing suppliers have annual revenue in excess of $5,467;

and therefore, $164 in annual cost savings is less than 3% of revenue. Consequently, the

conservatively estimated $164 annual cost savings per supplier is not a significant economic

impact20.

Therefore, the DEA estimates the cost savings of this proposed rule is not significant for all

affected entities, including small entities. Therefore, the DEA estimates that this rule will not, if

promulgated, have a significant economic impact on a substantial number of small entities.

4. ECONOMIC ANALYSIS RESULTS

4.1 EXECUTIVE ORDERS 12866 AND 13563

The DEA estimates this rule will result in an annual cost savings of $25,941,134. Therefore,

the DEA does not anticipate that this rulemaking will have an annual effect on the economy of

$100 million or more or adversely affect in a material way the economy, a sector of the

economy, productivity, competition, jobs, the environment, public health or safety, or state,

local, or tribal governments or communities.

4.2 REGULATORY FLEXIBILITY ACT

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

The DEA is proposing to amend its regulations to implement a new single-sheet format for order

forms (DEA Form 222) which are issued by DEA to DEA registrants to allow them to order

schedule I and/or II controlled substances. DEA also proposes minor procedural changes,

including among other things, who can issue the power of attorney that is required for others to

20 This analysis was conducted on a per-registration basis. A conversion to the number of entities would result in a lower impact per entity.

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sign DEA Form 222. This proposed rule affects all parties (purchaser and suppliers) to

transactions where a DEA Form 222 is used.

Based on its records, the DEA estimates that 71,481 entities are affected by this rule, which

consist of 336 manufacturers, 378 distributors, 31,887 pharmacies, 7,980 hospitals and clinics

and 30,900 practitioners. The DEA estimates that 65,984 (92.3%) of the total 71,481 affected

entities are small entities (312 manufacturers, 364 distributors, 31,217 pharmacies, 3,716

hospitals and clinics and 30,375 practitioners).

The estimated economic impact varies for purchasers and suppliers, and among the suppliers,

dispensing suppliers and non-dispensing suppliers.

Purchasers of Schedules I & II Controlled Substances

“Purchasers” are registrants (primarily pharmacies, practitioners, hospitals and clinics)

who execute DEA Form 222 to order Schedules I and II controlled substances. The use of the

new single sheet form will require purchasers to make a copy (photocopy or scan) prior to

submission to a supplier at an estimated cost of $0.22 per form, or a total of $734,646 per year.

However, some cost savings are expected due to efficiencies gained from the new form. Key

advantages include: 1) reduction in number of forms executed due to increased number of lines

per form, 2) reduction in form failure due to upgraded high-quality secure paper (fewer

incidences of tears, carbon not copying through, improper tear of perforated edges, etc.), and 3)

increased efficiency in completing the form due to ability to use a computer printer to fill the

form (in addition to the existing allowable methods of typewriter, pen, or indelible pencil).

Purchasers, as a group, are anticipated to save $22,794,750, for a net savings of $22,060,104, or

$312 per entity.

Dispensing Suppliers (Non-ARCOS Reporting) of Schedules I & II Controlled Substances

32

“Dispensing suppliers” are individual or institutional practitioners (e.g. physicians,

pharmacies, hospitals, clinics, etc.) that are registered to dispense a controlled substance and may

also distribute (without being registered to distribute) a quantity of such substance to another

practitioner using either a DEA Form 222. The proposed rule would allow the dispensing

supplier to submit their copy of the order form to DEA via fax or email, in addition to the

currently required submission by mail. Assuming dispensers will opt for the less costly fax or

scan-and-email method, based on an estimated 17,480 dispensing suppliers, the DEA estimates

the dispensing suppliers, as a group, would save $2,861,977 per year or $164 per supplier.

Non-Dispensing Suppliers of Schedules I & II Controlled Substances

“Non-dispensing suppliers” are persons registered with the DEA as manufacturers or

distributors of controlled substances listed in Schedules I or II. The proposed rule and new form

would remove the requirement to ship their copies of the received order forms to their DEA field

office at the end of each month. Removing this requirement is estimated to generate a cost

savings of combined $239,657, or $336 per entity.

Summary

In summary, the proposed rule is estimated to save Purchasers, Dispensing Suppliers, and

Non-Dispensing Suppliers, $312, $164, and $336 per entity per year, respectively. The DEA

uses 3% of annual revenue as threshold for “significant economic impact.” The annual revenue

at which $312, $164, and $336 is 3% equates to $10,400, $5,467, and $11,200, respectively. The

DEA estimates the annual revenues of purchasers, dispensing suppliers, and non-dispensing

suppliers are greater than $10,400, $5,467, and $11,200, respectively, resulting in an economic

impact of less than 3% of annual revenue.

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Therefore, the DEA’s evaluation of economic impact by size category indicates that the rule

will not, if promulgated, have a significant economic impact on a substantial number of these

small entities.

4.3 UNFUNDED MANDATES REFORM ACT

The estimated annual impact of this rule is minimal; thus this proposed rule will not result in

any Federal mandate that may result in the expenditure by State, local, and tribal governments, in

the aggregate, or by the private sector, of $100 million or more (adjusted for inflation) in any one

year.

4.4 CONGRESSIONAL REVIEW ACT

The estimated annual impact of this rule is minimal; thus, the rule will not have an annual

effect on the economy of $100 million or more.