This rule was developed in accordance with the principles of Executive Orders (E.O.) 12866 and 13563. E.O. 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distributive impacts; and equity). E.O. 13563 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review as established in E.O. 12866.

E.O. 12866 classifies a “significant regulatory action,” requiring review by the Office of Management and Budget (OMB), as any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or 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 the E.O. DEA has determined that this rule is not a “significant regulatory action” under E.O. 12866, section 3(f).

As finalized, PMK glycidate, PMK glycidic acid, and APAA are subject to all of the regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, importing, and exporting of list I chemicals. The first two chemicals, PMK glycidate and PMK glycidic acid, are closely related in chemical structure to precursors of MDMA and other “ecstasy”-type substances, as discussed in the above background section. APAA is a precursor of amphetamine and methamphetamine. All three chemicals are highly suitable for the illicit manufacture of precursors listed in Table I of the 1988 Convention (3,4-methylenedioxyphenyl-2-propanone (3,4-MDP-2-P) and 1-phenyl-2-propanone (P-2-P)). As noted earlier, incidents of illicit manufacture and tracking of these three chemicals have been reported for many years to the INCB, with an increase in the frequency and amounts reported in 2018 and 2019.

In making its assessment pursuant to Article 12, paragraph 4 of the 1988 Convention, the CND found that there was no known legitimate manufacture of and trade in any of the three chemicals and that their use was limited, in small amounts, to research, development, laboratory, and analytical purposes. DEA also searched information in the public domain for legitimate uses of these three chemicals, and likewise, did not identify any known legitimate use for any of these chemicals, other than possibly for research purposes. DEA evaluated the costs and benefits of this action.

DEA cannot rule out the possibility that minimal quantities of PMK glycidate, PMK glycidic, or APAA are used for the manufacturing of legitimate pharmaceutical substances. However, DEA did not receive any public comments to that effect in response to the NPRM.

Costs

As stated above, the only use for PMK glycidate and PMK glycidic acid is as intermediaries for the manufacturing of MDMA and other “ecstasy”-type substances. Similarly, the only use for APAA is as a precursor for amphetamine and methamphetamine. Any manufacturer, distributor, importer, or exporter of any of these three chemicals for legitimate pharmaceutical commerce, if they exist at all, will incur costs if they are not already registered for handling List I chemicals. The primary costs associated with this rule are the annual registration fees ($3,047 for manufacturers and $1,523 for distributors, importers, and exporters). Moreover, any manufacturer that uses any of these three chemicals for legitimate pharmaceutical purposes is likely to already be registered with DEA and have all security and other handling processes in place, resulting in minimal cost.

DEA has identified ten domestic suppliers of one or more of these chemicals, PMK glycidate, PMK glycidic acid, and APAA; nine of these suppliers are not currently registered with DEA to handle list I chemicals. The amount of these three chemicals distributed by these suppliers is unknown. It is common for chemical distributors to have items on their catalog while not actually having any material level of sales. Based on the discussion above, DEA believes any quantity of sales from these distributors for legitimate pharmaceutical purposes is minimal. As finalized, suppliers for the legitimate use of PMK glycidate, PMK glycidic acid, and APAA are expected to choose the least-cost option, which in many cases may lead them to stop selling the minimal quantities, if any, of PMK glycidate, PMK glycidic acid, and APAA, rather than incur the registration cost. Therefore, DEA estimates that the cost of foregone sales is minimal; and thus, the cost of this rule is minimal.

This analysis excludes consideration of any economic impact to those businesses that facilitate the manufacturing and distribution of PMK glycidate, PMK glycidic acid, or APAA for the illicit production of amphetamine, methamphetamine, MDMA, or other “ecstasy”-type substances.

Benefits

Controlling PMK glycidate, PMK glycidic acid, and APAA is expected to prevent, curtail, and limit the unlawful manufacture and distribution of amphetamine, methamphetamine, and MDMA and other “ecstasy”-type substances. This action is also expected to assist in the prevention of possible theft or diversion of PMK glycidate, PMK glycidic acid, and APAA from any legitimate firms. DEA also believes control is necessary to prevent unscrupulous chemists from synthesizing PMK glycidate, PMK glycidic acid, and APAA and selling them (as an unregulated material) through the internet and other channels to individuals who may wish to acquire unregulated intermediary chemicals for the purpose of manufacturing illicit amphetamine, methamphetamine, or MDMA or other “ecstasy”-type substances.

In summary, DEA conducted a qualitative analysis of costs and benefits. DEA believes this action will minimize the diversion of PMK glycidate, PMK glycidic acid, and APAA. DEA believes the legitimate market for PMK glycidate, PMK glycidic acid, and APAA for legitimate pharmaceutical purposes is minimal. Thus, any potential cost resulting from this regulation is minimal.