BILL ANALYSIS                                                                                                                                                                                                    







                      SENATE COMMITTEE ON PUBLIC SAFETY
                             Senator Mark Leno, Chair              S
                             2009-2010 Regular Session               B

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          SB 484 (Wright)                                             
          As Introduced February 26, 2009 
          Hearing date:  April 28, 2009
          Health & Safety Code
          JM:mc


                                   PSEUDOEPHEDRINE: 

                        SCHEDULING AS A CONTROLLED SUBSTANCE  


                                       HISTORY

          Source:  Attorney General's Office

          Prior Legislation: AB 162 (Runner) - Ch. 978, Stats. 1999

          Support: San Francisco District Attorney; California Police  
                   Chiefs Association; Peace Officers Research Association  
                   of California; California Narcotics Officers  
                   Association; Los Angeles County Police Chiefs;  
                   California Correctional Supervisors Organization;  
                   Fresno County Board of Supervisors; Los Angeles County  
                   District Attorney; California State Sheriffs  
                   Association; Oregon State Pharmacy Association; Long  
                   Beach Police Officers Association; Santa Ana Police  
                   Officers Association; California Fraternal Order of  
                   Police; Los Angeles County Professional Peace Officers  
                   Association; San Bernardino County Sheriff's Department

          Opposition:Consumer Healthcare Products Association; Taxpayers  
                   for Improving Public Safety; Healthcare Distribution  




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                   Management Association (unless amended);  
                   Schering-Plough; California Retailers Association;  
                   National Association of Chain Drug Stores

          (SEE COMMENT #8 FOR AUTHOR'S AMENDMENTS THAT ELIMINATE FELONY  
          PENALTIES IN THE BILL.  PSEUDOEPHEDRINE AND SPECIFIED DRUGS WILL  
          BE OBTAINABLE ONLY BY PRESCRIPTION, BUT NOT AS A CONTROLLED  
          SUBSTANCE.)



                                        KEY ISSUES
           
          SHOULD EPHEDRINE, PSEUDOEPHEDRINE, NORPSEUDOEPHEDRINE AND  
          PHENYLPROPANOLAMINE BE PLACED ON SCHEDULE V OF THE CONTROLLED  
          SUBSTANCE SCHEDULES, WITH THE FOLLOWING APPLICABLE PENALTIES:

          POSSESSION OF ONE OF THESE CHEMICALS WOULD BE AN ALTERNATE  
          FELONY-MISDEMEANOR, WITH A MAXIMUM JAIL TERM OF ONE YEAR OR A PRISON  
          TRIAD OF 16 MONTHS, TWO YEARS OR THREE YEARS;

          POSSESSION FOR SALE OF ONE OF THESE CHEMICALS WOULD BE A FELONY,  
          WITH A PRISON TERM OF 16 MONTHS, TWO YEARS OR THREE YEARS; AND

          SALE OR OTHER TRANSFER OF ONE OF THESE CHEMICALS WOULD BE A FELONY,  
          WITH A PRISON TERM OF TWO, THREE OR FOUR YEARS?


                                       PURPOSE

          The purpose of this bill is to place ephedrine, pseudoephedrine,  
          norpseudoephedrine or phenylpropanolamine, and specified related  
          chemicals, on Schedule V of the controlled substance schedules  
          and to thereby provide that 1) possession of one of these  
          chemicals is an alternate felony-misdemeanor; 2) possession for  
          sale of one of these chemicals is a felony, with a prison term  
          of 16 months, two years or three years; and 3) sale or transfer  
          of one of these chemicals is a felony, with a prison term of  
          two, three or four years.
          




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           Existing law  provides the following restrictions and  
          requirements for the sale of ephedrine, pseudoephedrine,  
          norpseudoephedrine or phenylpropanolamine in over-the-counter  
          retail transactions:

                 A retailer in a single transaction may sell no more than  
               three packages of a product containing these chemicals.
                 A retailer may sell no more than nine grams of  
               ephedrine, pseudoephedrine, norpseudoephedrine or  
               phenylpropanolamine.
                 A first violation of these restrictions is a  
               misdemeanor, punishable by a jail term of up to six months,  
               a fine of up to $1,000, or both.
                 A second or subsequent violation is a misdemeanor,  
               punishable by a jail term of up to one year, a fine of up  
               to $10,000, or both.  (Health & Saf. Code  11100, subd.  
               (g).)

           Existing federal law  (21 USC  830, subd. (e)) includes very  
          detailed restrictions and requirements the for retail sale of  
          ephedrine, pseudoephedrine, norpseudoephedrine or  
          phenylpropanolamine.  These restrictions include, in part:

                 No more than 3.6 grams in a single transaction.
                 No more than 7.5 grams per customer in a one-month  
               period.
                 Seller must maintain a written or electronic logbook of  
               each sale, including the date of the transaction, the name  
               and address of the purchaser and the quantity sold.
                 The purchaser must present valid identification, as  
               specified, and the seller must verify the identification.
                 The purchaser must sign a paper or electronic logbook,  
               as specified.
                 The seller must maintain these documents, as specified.

           Existing law  defines a dangerous drug as any drug that is unsafe  
          for self-use.  It includes any drug that under federal or state  
          law can only be obtained through a prescription.  (Health & Saf.  
          Code  4021.)  





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           Existing law  classifies controlled substances in five schedules  
          according to their danger and potential for abuse.  Schedule I  
          controlled substances have the greatest restrictions and  
          penalties, and are deemed by law to have no accepted medical  
          use.  (Health and Saf. Code  11054-11058.)

           Existing federal law  (21 U.S.C.  812) includes the following  
          scheduling criteria:                  

                 Schedule I:  The drug or other substance has a high  
               potential for abuse.  The drug or other substance has no  
               currently accepted medical use in treatment in the United  
               States.  There is a lack of accepted safety for use of the  
               drug or other substance under medical supervision.
                 Schedule II:  The drug or other substance has a high  
               potential for abuse.  The drug or other substance has a  
               currently accepted medical use in treatment in the United  
               States or a currently accepted medical use with severe  
               restrictions.  Abuse of the drug or other substances may  
               lead to severe psychological or physical dependence.
                 Schedule III:  The drug or other substance has a  
               potential for abuse less than the drugs or other substances  
               in Schedules I and II.  The drug or other substance has a  
               currently accepted medical use in treatment in the United  
               States.  Abuse of the drug or other substance may lead to  
               moderate or low physical dependence or high psychological  
               dependence.
                 Schedule IV.  The drug or other substance has a low  
               potential for abuse relative to the drugs or other  
               substances in Schedule III.  The drug or other substance  
               has a currently accepted medical use in treatment in the  
               United States.  Abuse of the drug or other substance may  
               lead to limited physical dependence or psychological  
               dependence relative to the drugs or other substances in  
               Schedule III.
                 Schedule V:  The drug or other substance has a low  
               potential for abuse relative to the drugs or other  
               substances in Schedule IV.  The drug or other substance has  
               a currently accepted medical use in treatment in the United  
               States.  Abuse of the drug or other substance may lead to  




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               limited physical dependence or psychological dependence  
               relative to the drugs or other substances in Schedule IV.

           This bill  places ephedrine, pseudoephedrine, norpseudoephedrine  
          or phenylpropanolamine in Schedule V of the controlled substance  
          schedules.  This bill makes possession of ephedrine,  
          pseudoephedrine, norpseudoephedrine or phenylpropanolamine a  
          felony, punishable by imprisonment in state prison for 16  
          months, two years or three years and a fine of up to $10,000.

           This bill  makes possession for sale or specified transfer of  
          ephedrine, pseudoephedrine, norpseudoephedrine or  
          phenylpropanolamine a felony, punishable by imprisonment in  
          state prison for 16 months, two years or three years and a fine  
          of up to $10,000.

           This bill  makes selling, furnishing, et cetera, ephedrine,  
          pseudoephedrine, norpseudoephedrine or phenylpropanolamine a  
          felony, punishable by imprisonment in state prison for two,  
          three or four years and a fine of up to $10,000.

              RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION IMPLICATIONS
          
          California continues to face a severe prison overcrowding  
          crisis.  The Department of Corrections and Rehabilitation (CDCR)  
          currently has about 170,000 inmates under its jurisdiction.  Due  
          to a lack of traditional housing space available, the department  
          houses roughly 15,000 inmates in gyms and dayrooms.   
          California's prison population has increased by 125% (an average  
          of 4% annually) over the past 20 years, growing from 76,000  
          inmates to 171,000 inmates, far outpacing the state's population  
          growth rate for the age cohort with the highest risk of  












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          incarceration.<1>

          In December of 2006 plaintiffs in two federal lawsuits against  
          CDCR sought a court-ordered limit on the prison population  
          pursuant to the federal Prison Litigation Reform Act.  On  
          February 9, 2009, the three-judge federal court panel issued a  
          tentative ruling that included the following conclusions with  
          respect to overcrowding:

               No party contests that California's prisons are  
               overcrowded, however measured, and whether considered  
               in comparison to prisons in other states or jails  
               within this state.  There are simply too many  
               prisoners for the existing capacity.  The Governor,  
               the principal defendant, declared a state of emergency  
               in 2006 because of the "severe overcrowding" in  
               California's prisons, which has caused "substantial  
               risk to the health and safety of the men and women who  
               work inside these prisons and the inmates housed in  
               them."  . . .  A state appellate court upheld the  
               Governor's proclamation, holding that the evidence  
               supported the existence of conditions of "extreme  
               peril to the safety of persons and property."  
               (Citation omitted.)  The Governor's declaration of the  
               state of emergency remains in effect to this day.

               . . .  the evidence is compelling that there is no  
               relief other than a prisoner release order that will  
               remedy the unconstitutional prison conditions.

               . . .

               Although the evidence may be less than perfectly  
               ----------------------
          <1>  "Between 1987 and 2007, California's population of ages 15  
          through 44 - the age cohort with the highest risk for  
          incarceration - grew by an average of less than 1% annually,  
          which is a pace much slower than the growth in prison  
          admissions."  (2009-2010 Budget Analysis Series, Judicial and  
          Criminal Justice, Legislative Analyst's Office (January 30,  
          2009).)



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               clear, it appears to the Court that in order to  
               alleviate the constitutional violations California's  
               inmate population must be reduced to at most 120% to  
               145% of design capacity, with some institutions or  
               clinical programs at or below 100%.  We caution the  
               parties, however, that these are not firm figures and  
               that the Court reserves the right - until its final  
               ruling - to determine that a higher or lower figure is  
               appropriate in general or in particular types of  
               facilities.

               . . .Under the PLRA, any prisoner release order that  
               we issue will be narrowly drawn, extend no further  
               than necessary to correct the violation of  
               constitutional rights, and be the least intrusive  
               means necessary to correct the violation of those  
               rights.  For this reason, it is our present intention  
               to adopt an order requiring the State to develop a  
               plan to reduce the prison population to 120% or 145%  
               of the prison's design capacity (or somewhere in  
               between) within a period of two or three years.<2>

          The final outcome of the panel's tentative decision, as well as  
          any appeal that may be in response to the panel's final  
          decision, is unknown at the time of this writing.

           This bill  does appear to aggravate the prison overcrowding  
          crisis outlined above.

                                      COMMENTS

            1.  Need for This Bill
           
          According to the author:
          ---------------------------
          <2>  Three Judge Court Tentative Ruling, Coleman v.  
          Schwarzenegger, Plata v. Schwarzenegger, in the United States  
          District Courts for the Eastern District of California and the  
          Northern District of California United States District Court  
          composed of three judges pursuant to Section 2284, Title 28  
          United States Code (Feb. 9, 2009).



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               The enormous impact of methamphetamine on human life,  
               public safety and health costs is hard to  
               overemphasize.  A RAND study estimated that the yearly  
               cost of the nation's meth epidemic exceeds of $23  
               billion.

               In 2008, California seized 119 meth labs, by far the  
               highest total in the Western United States.  Also in  
               2008, a total of 15 meth "super labs" capable of  
               producing in excess of 10 pounds of meth were seized  
               in California. 

               Without a ready supply of ephedrine/psuedoephedrine,  
               found in many cold medications, criminals cannot make  
               meth.  . . .   

               The restrictions that have been placed on  
               pseudoephedrine/ephedrine products do not work. . . .   
                Some retailers ignore the limits on the amount that  
               can be sold and criminals circumvent the restrictions  
               by "smurfing" -- making numerous purchases of  
               over-the-counter packages.  . . .  

               SB 484 will require a prescription for purchase of  
               ephedrine-based drugs.  SB 484   is modeled after an  
               Oregon law that resulted in a huge drop in meth labs.   
               In 2003, the last year products with  
               ephedrine/pseudoephedrine were not restricted, Oregon  
               discovered 473 labs.  In 2007, following the  
               prescription, Oregon found 18 meth labs.  Other states  
               are now considering similar legislation and similar  
               legislation has been introduced in Congress.   . . .  

               Schedule V drugs, which would include  
               ephedrine/pseudoephedrine, can be prescribed by phone.  
                Drug manufacturers have also produced replacement  
               cold and allergy medicines containing phenylephrine,  
               which cannot be converted to meth and which would  
               remain readily available for purchase without  




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               restriction.
           
           2.  Scheduling a Drug or Chemical that is not Itself a Drug of  
          Abuse as a Controlled Substance

           This bill would place pseudoephedrine and related drugs in  
          Schedule V of the controlled substance schedules, although these  
          chemicals are not directly used for intoxication.  Such a  
          listing would arguably be a departure from the intended use of  
          and policy behind the controlled substance schedules.   
          Pseudoephedrine, because it is the basic chemical used for  
          clandestine manufacturing of methamphetamine, is a closely  
          regulated chemical.  Distributors and sellers of pseudoephedrine  
          must make reports to the Department of Justice as to  
          transactions involving the chemical.  A record of purchasers and  
          purchases must be kept.  Failure to report, or including false  
          information in a report, is a misdemeanor, and in some cases a  
          felony for repeated violations.  Sale of pseudoephedrine, except  
          in limited quantities of over-the-counter cold and allergy  
          medications, is a crime.  It is a felony to sell pseudoephedrine  
          with knowledge that the drug will be used to manufacture a  
          controlled substance.  (Health & Saf. Code 11100 et seq.)

          The controlled substance schedules classify drugs of abuse in  
          five schedules.  The drugs on Schedule I, which include heroin,  
          are deemed to have no legitimate medical use.  Schedule I drugs  
          cannot be prescribed.  Drugs on the other schedules are deemed  
          to have decreasing potential for abuse and decreasing  
          regulations concerning administration and prescription.  Before  
          the state adopted an electronic reporting system for  
          prescriptions, Schedule II drugs could only be prescribed  
          through a special triplicate prescription, a copy of which was  
          kept by law enforcement.     

          Possession of any drug on Schedule V is an alternate  
          felony-misdemeanor.  Possession for sale or other transfer is a  
          felony and sale or transfer is a felony, with a maximum prison  
          term of four years.  What is commonly described as sale of a  
          controlled substance actually includes giving such a drug away.   
          In other words, were this bill to pass, it would be a felony to  




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          give someone a few pseudoephedrine decongestant tablets. 

          Many drugs that are not used for intoxication can only be  
          obtained through a prescription.  These drugs are generally  
          described as "dangerous drugs," in contrast with  
          over-the-counter drugs that are deemed safe to use without  
          medical supervision.  The drugs or chemicals placed in the  
          controlled substance schedules could be defined as drugs for  
          which a prescription is required, although not controlled  
          substances.  Misdemeanor penalties apply to transfer of such  
          drugs, but a person would not be guilty of a felony for  
          possessing or transferring the drugs.
           
          SHOULD PSEUDOEPHEDRINE AND OTHER SPECIFIED DRUGS OR CHEMICALS  
          THAT ARE NOT GENERALLY DIRECTLY USED FOR INTOXICATION, BUT THAT  
          ARE USED TO MANUFACTURE METHAMPHETAMINE, BE LISTED IN THE  
          SCHEDULES OF DRUGS OF ABUSE?
           
           3.  Access to Decongestant Medications Under this Bill for Persons  
            with Little or No Access to Physicians

           Many consumers rely on pseudoephredine products to ease nasal  
          congestion due to colds, allergies and related maladies because  
          these products are effective.  Because one does not need a  
          prescription to buy them, these medications are readily  
          available to people who do not have medical insurance or  
          reasonable access to physicians for non-emergency treatment.   
          This bill, in requiring cold and allergy sufferers to obtain a  
          prescription for pseudoephredine, would limit or deny access to  
          this effective medication for a significant portion of  
          Californians.

          In recent years, because of restrictions on the sale and  
          distribution of pseudoephredine, the pharmaceutical industry has  
          developed and marketed alternative or substitute products.  It  
          appears that the most commonly used substitute is phenylephrine.  








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           A recent article by Gayle Nicholas Scott, Pharm. D.,<3>  
          reviewed the relative efficacies of pseudoephredine and  
          phenylephrine.

          Dr. Scott concluded:  "Phenylephrine appears to have less  
          decongestant activity than pseudoephredine  ." She also noted  
          that phenylephrine has a shorter half-life than pseudoephredine,  
          thus requiring more frequent use. 

          HOW EFFECTIVE ARE OVER-THE-COUNTER ALTERNATIVES TO  
          PSEUDOEPHEDRINE FOR PEOPLE WHO DO NOT HAVE ACCESS TO PHYSICIANS  
          TO OBTAIN A PRESCRIPTION FOR PSEUDOEPHEDRINE?

          4.  Potential Unintended Consequences  

          While pseudoephredine is an effective decongestant, sale of the  
          chemical with few restrictions creates serious problems because  
          it is used to make methamphetamine.  In addition to  
          methamphetamine being a drug of serious abuse, manufacturing  
          methamphetamine produces toxic and volatile chemicals.  The  
          toxic chemicals poison the environment, as illicit manufactures  
          dump waste wherever they can.  People who are exposed to the  
          chemicals can become ill and can become severely injured if the  
          toxic materials explode in clandestine laboratories.

          Illicit manufacturing of methamphetamine in California from  
          pseudoephedrine obtained through over-the-counter sales creates  
          serious problems.  However, eliminating this source of chemicals  
          for methamphetamine manufacturing may not be free of negative  
          consequences.  Eliminating California manufacturing of  
          methamphetamine may not substantially diminish use of the drug.   
          The supply of methamphetamine is driven by demand, and finished  
          methamphetamine appears to be readily available from sources  
          outside of California, including Mexico.  

          ---------------------------
          <3> Dr. Scott wrote the article as a consultant to Sportpharm, a  
          company that supplies medical supplies and drugs to athletic  
          organizations.  Sportpharm is relied upon by organizations such  
          as USA Track and Field, the national governing body for track  
          and field, including anti-doping issues.



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          Any policy change which might result in an increase in the  
          importation of methamphetamine from Mexico could have serious  
          and deleterious effects on public safety.  Law enforcement and  
          media sources have recently noted an increase in violence used  
          by Mexican cartels in the United States, including significant  
          increases in violence related to Mexican cartels in border  
          states.  (Mexican Drug Cartel Violence Spills Over, Alarming  
          U.S., New York Times, March 22, 2009.)

          The New York Times article included a concise history of the  
          development of the Mexican illicit drug business, including the  
          more recent methamphetamine manufacturing and trafficking: 

               The spread of the Mexican cartels, longtime  
               distributors of marijuana, has coincided with their  
               taking over cocaine distribution from Colombian  
               cartels. Those cartels suffered setbacks when American  
               authorities curtailed their trading routes through the  
               Caribbean and South Florida.  Since then, the  
               Colombians have forged alliances with Mexican cartels  
               to move cocaine, which is still largely produced in  
               South America, through Mexico and into the United  
               States.  The Mexicans have also taken over much of the  
               methamphetamine business, producing the drug in "super  
               labs" in Mexico.  The number of labs in the United  
               States has been on the decline.  (Emphasis added.)

          Media and law enforcement reports noted an increase in  
          involvement by Mexican drug organizations in the methamphetamine  
          trade when states across the country greatly restricted the  
          availability of pseudoephredine.  A January 23, 2006 article in  
          the New York Times entitled, "Potent Meth Floods in as States  
          Curb Domestic Variety," described the intended and unintended  
          consequences of reducing access to pseudoephedrine in Midwest  
          states such as Iowa and Oklahoma.  Law enforcement and health  
          officials found:

                 Laboratory seizures dropped dramatically (from 120 to 20  
               a month in Iowa);
                 Burn injuries from handling toxic chemicals decreased  




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               greatly in Iowa;
                 Demand remained constant, and even increased among women  
               in Iowa;
                 Decreases in removal of children because parents cooked  
               meth was offset by an increase in removals based on  
               parental use;
                 Mexican cartels greatly increased distribution of meth  
               as an addition to marijuana, cocaine and heroin;
                 Methamphetamine became much more potent and addictive -  
               often 80% pure crystal ice" meth;
                 Overdoses increased; and
                 Methamphetamine prices greatly increased, as did  
               burglaries, in Iowa.

          COULD IMPOSITION OF A PRESCRIPTION REQUIREMENT FOR PURCHASE OF  
          PSEUDOEPHEDRINE AND SIMILAR CHEMICALS LEAD TO INCREASED PRESENCE  
          IN THE METHAMPHETAMINE TRADE BY MEXICAN DRUG CARTELS?

          WOULD METHAMPHETAMINE COMMERCE BE MORE EFFECTIVELY CURBED BY  
          REDUCING DEMAND, WITH FEWER POTENTIAL INADVERTENT AND ADVERSE  
          CONSEQUENCES?

            5.  U.S. Drug Enforcement Agency (DEA) Analysis of Drug Trade in  
            Oregon and California, with Emphasis on Methamphetamine
           
          This bill is essentially modeled on an Oregon law which placed  
          pseudoephedrine and similar drugs or chemicals on Schedule III  
          of the controlled substance schedules.  The U.S. DEA publishes a  
          summary of illicit drug facts and issues as to each state.  The  
          Oregon summary follows:

               DEA Oregon Drug Analysis, with Emphasis on Methamphetamine:

               Mexican drug trafficking organizations dominate the  
               illicit drug market in Oregon.  The state serves as a  
               transshipment point for controlled substances smuggled  
               from Mexico to Washington and Canada.  Recent trends  
               show the state is also becoming a transshipment point  
               for controlled substances smuggled from Mexico to  
               various states east of Oregon, such as Montana,  




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               Minnesota, Illinois, and New York.  Marijuana and MDMA  
               (street name Ecstasy) from Canada also transit Oregon  
               en route to other U.S. locations.  While  
               methamphetamine is a significant drug threat in  
               Oregon, marijuana, heroin, cocaine, and club drugs are  
               of concern.  In 2007, drug prices in Oregon for  
               methamphetamine and cocaine doubled due to enforcement  
               operations in the United States and Mexico that  
               disrupted the supply of these drugs.  Drug trafficking  
               organizations in Oregon also engage in money  
               laundering, using a variety of methods to legitimize  
               and reposition illicit proceeds.

               Methamphetamine abuse, trafficking, and manufacturing  
               occur in Oregon. Methamphetamine is one of the most  
               widely abused controlled substances in the state and  
               availability is high.  In the past, powder  
               methamphetamine was most common; however, seizures  
               show a switch to the more addictive and potent form of  
               meth referred to as "ice" or "crystal."


               Oregon legislators enacted a number of laws aimed at  
               directly reducing methamphetamine availability and  
               local production.  In July 2006, products containing  
               ephedrine and pseudoephedrine, . . . became Schedule  
               III controlled substances, available only by  
               prescription.  In recent years, legislation restricted  
               sales of pseudoephedrine by limiting sales to licensed  
               pharmacies.  In addition, pharmacies are required to  
               maintain a log of purchase transactions and keep  
               products behind a pharmacy counter.  Reported  
               clandestine laboratory seizures have been declining,  
               and the local drug market has been increasingly  
               supplied with methamphetamine from other southwestern  
               states and Mexico.  Mexican drug trafficking  
               organizations dominate the methamphetamine supply in  
               the Pacific Northwest.  (Emphasis added.)

               DEA data: diminishing methamphetamine lab incidents in  




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          Oregon, 2003- 2207:

                ----------------------------------------------------- 
               |2003                      |375                       |
               |--------------------------+--------------------------|
               |2004                      |322                       |
               |--------------------------+--------------------------|
               |2005                      |189                       |
               |--------------------------+--------------------------|
               |2006                      |55                        |
               |--------------------------+--------------------------|
               |2007                      |20                        |
                ----------------------------------------------------- 

          Pseudoephedrine did not become a prescription drug until 2006.   
          In 2003, when laboratory incidents began to fall in Oregon, the  
          state limited pseudoephedrine sales to licensed pharmacies and  
          required pharmacies to keep a log of purchasers.  

          The U.S. DEA summary for California follows:

               DEA California Drug Analysis, with Specific Emphasis on  
          Methamphetamine:

               Due to California's diverse culture and unique  
               geography ? many issues affect the drug situation in  
               California.  ?[C]ocaine, heroin, methamphetamine, and  
               marijuana are smuggled ? from Mexico; however,  
               methamphetamine and marijuana are produced or  
               cultivated in large quantities within the state.  San  
               Diego and Imperial Counties remain principal  
               transshipment zones for a variety of drugs - cocaine,  
               heroin, marijuana and methamphetamine - smuggled from  
               Mexico.  Most drug traffickers/organizations that are  
               encountered by law enforcement continue to be  
               poly-drug traffickers rather than specializing in one  
               type of drug.  Since September 11, 2001, greater  
               emphasis has been placed on carefully screening people  
               and vehicles at all California Ports of Entry into the  
               U.S. from Mexico.  ?[T]traffickers must use other  




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               means to smuggle their contraband into the U.S.,  
               including the use of tunnels that run underneath the  
               border and more sophisticated hidden compartments in  
               vehicles.  Los Angeles is a distribution center for  
               all types of illicit drugs destined for other major  
               metropolitan areas throughout the U.S. as well as  
               locally.  Increased security ? at [LAX] continues to  
               deter drug traffickers?  Although [rural] northern  
               California is awash in methamphetamine ? heroin  
               remains the number one drug of abuse in San Francisco,  
               heroin and crack cocaine continue to impact Oakland,  
               and methamphetamine continues in and around  
               Sacramento.

               Methamphetamine is the primary drug threat in  
               California.  Mexican organizations continue to  
               dominate the production and distribution of  
               high-quality meth, while a secondary trafficking  
               group, composed primarily of Caucasians, operates  
               small, unsophisticated laboratories.  Clandestine  
               laboratories can be found in any location: high  
               density residential neighborhoods, sparsely populated  
               rural areas, remote desert locations in the southern  
               portions of California, and the forested areas in  
               northern California.  In recent years, there has been  
               a decrease in the number of meth labs seized in  
               California and an increase in the number of meth labs  
               just south of the border in Mexico.  Rural areas in  
               the Central Valley are the source of much of the meth  
               produced in California and seized elsewhere. Within  
               California itself, Hispanics and Caucasians are the  
               almost exclusive consumers of meth.  Purity levels of  
               meth have ranged from a low of ten percent to a high  
               of 100 percent purity.  As the supply of  
               pseudoephedrine from Canada has diminished after  
               successful law enforcement operations, there has been  
               a noticeable increase in pseudoephedrine and ephedrine  
               seized that originated from China.  Restrictions on  
               pseudoephedrine importation into Mexico,  
               balance-of-power issues among rival Mexican cartels,  




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               and increased enforcement efforts by the current  
               Mexican government have all significantly impacted  
               methamphetamine manufacturing and the smuggling of  
               finished product into the Los Angeles area.  (Emphasis  
               added.)

               DEA data: diminishing methamphetamine lab incidents in  
          California, 2003- 2207:

                ----------------------------------------------------- 
               |2003                      |1,281                     |
               |--------------------------+--------------------------|
               |2004                      |767                       |
               |--------------------------+--------------------------|
               |2005                      |468                       |
               |--------------------------+--------------------------|
               |2006                      |353                       |
               |--------------------------+--------------------------|
               |2007                      |221                       |
               |                          |                          |
                ----------------------------------------------------- 

          California, according to federal DEA data, has experienced  
          a drop in laboratory incidents since 2003.  California law  
          was amended in 1999 (AB 162 (Runner) Ch. 978, Stats. 1999)  
          to limit each sale to no more than 9 grams.  Federal law  
          restricts purchase of more than 3.6 grams a day and 7.5  
          grams in a month.  Pharmacies must keep a log of such  
          transactions.

          WHAT BENEFITS OR HARM HAVE RESULTED IN OREGON FROM CLASSIFYING  
          PSEUDOEPHEDRINE AND SIMILAR DRUGS, AS SPECIFIED, AS CONTROLLED  
          SUBSTANCES?

          WOULD THE BENEFITS OF CLASSIFYING PSEUDOEPHEDRINE AND SIMILAR  
          DRUGS, AS SPECIFIED, AS CONTROLLED SUBSTANCES IN CALIFORNIA  
          OUTWEIGH WHATEVER NEGATIVE CONSEQUENCES MIGHT RESULT?

          DO METHAMPHETAMINE MANUFACTURERS IN CALIFORNIA HAVE ACCESS TO  
          PSEUDOEPHEDRINE IN BULK QUANTITIES FROM CHINA AND MEXICO?




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          6.  Argument in Support  

          The California Peace Officers' Association and the California  
          Police Chiefs Association, which support this bill, submit:

               This bill may be the most important  
               anti-methamphetamine bill ever introduced in  
               California.  Currently, 90% of the methamphetamine  
               that is cooked in this state is produced from  
               pseudoephedrine that is sold in California retail  
               outlets.  Clearly, California's current safeguards -  
               as well-intentioned as they were - have not worked.

               Senate Bill 484, which is patterned after the very  
               successful Oregon statute, would require that  
               pseudoephedrine products could only be sold via  
               prescription.  This would render inoperative the  
               sophisticated smurfing operations that, today, can  
               generate sufficient pseudeophedrine in one day to  
               produce a pound of methamphetamine.

          7.  Arguments in Opposition
           
          The Consumer Healthcare Products Association argues in  
          opposition:

               . . .   Requiring consumers to obtain a prescription  
               to purchase PSE products would impose substantial, and  
               unnecessary, new costs on consumers and the healthcare  
               system. . . .   CHPA supported . . . (requiring) all  
               PSE-containing OTCs to be sold from behind the  
               counter, limits purchases to 3.6 grams per day and 9  
               grams per 30 days, and requires purchaser signatures  
               in a logbook.  California has yet to enact similar  
               restrictions that would give state and local law  
               enforcement jurisdiction to enforce these sales  
               limits.  Since the CMEA and similar state restrictions  
               took effect, there has been a 61% nationwide drop in  
               meth lab incidents.  California's lab incidents have  




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               been reduced by 86%, from a high of 2,579 incidents in  
               1999 to 349 lab incidents in 2008,  . . . 

               . . .   Oklahoma has seen a 90% reduction in the  
               number of meth labs discovered in the state since  
               implementing an electronic tracking system and other  
               PSE sales restrictions.  Kentucky and Arkansas began  
               using similar systems state-wide in 2008.  Kentucky's  
               sales data shows that less than 1.5% of sales are  
               blocked by the electronic tracking system because they  
               would have exceeded legal limits, demonstrating that  
               the vast majority of PSE sales are legitimate.  While  
               electronic tracking is not a free solution, the  
               prescription alternative is an extremely costly route  
               for the state.  Requiring a prescription for an OTC  
               drug will impose direct costs on the state to  
               reimburse physicians every time a Medicaid or SCHIP  
               recipient sees a doctor to obtain a PSE prescription.   
               Health insurance premiums for state employees could  
               also be affected.  California would lose over  
               $4,460,000 in sales tax revenue (based on 2008 sales  
               data, not including Wal-Mart) because prescription  
               drugs are tax-exempt while OTCs are subject to sales  
               tax.  Oregon is the only state that currently requires  
               a prescription for PSE, and while Oregon has seen a  
               significant reduction in meth lab incidents, it is  
               comparable to the reductions achieved in its  
               neighboring states which do not require a  
               prescription.















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               Millions of consumers still wait in line at the  
               pharmacy and subject themselves to state and federal  
               criminal prosecution if they exceed legal quantity  
               limits to buy PSE.  This demonstrates that for many,  
               PSE is the best remedy even though reformulated  
               products are available on the shelves and are easier  
               to obtain. Prescription status for PSE would mean  
               substantial new costs for these consumers, measured in  
               both time and money, to access important and needed  
               medicines.

          8.  Author's Proposed Amendments to Eliminate Felonies in the Bill  

          By placing pseudoephedrine and other specified chemicals on  
          Schedule V of the controlled substance schedules, SB 484 would  
          create new felony penalties for possession, possession for sale  
          and sale of these chemicals.  To avoid creating new felonies,  
          the author has proposed that the bill could be amended to  
          provide that any person who obtains the specified chemicals is  
          guilty of an alternate infraction-misdemeanor.

          As is noted in the discussion above, existing law includes  
          crimes, including felonies, for possession of pseudoephedrine or  
          other specified chemicals with the intent to manufacture  
          methamphetamine.  Additional crimes apply to persons who  
          transfer these chemicals with the intent that they be used to  
          manufacture methamphetamine or with knowledge that the chemicals  
          will be used to manufacture methamphetamine.  The new crime for  
          possessing pseudoephedrine or other specified chemicals without  
          a prescription be amended to provide that the new section does  
          not prohibit prosecution under any other applicable provision of  
          law. 

          SHOULD THIS BILL BE AMENDED TO PROVIDE THAT ANY PERSON WHO  
          OBTAINS PSEUDOEPHEDRINE OR SPECIFIED RELATED CHEMICALS, WITHOUT  
          A PRESCRIPTION IS GUILTY OF AN ALTERNATE INFRACTION-MISDEMEANOR?

          SHOULD THE AMENDMENTS ALSO PROVIDE THAT POSSESSION OF  
          PSEUDOEPHEDRINE OR OTHER SPECIFIED CHEMICALS OR DRUGS WITHOUT A  




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          PRESCRIPTION CAN BE PROSECUTED UNDER ANY OTHER APPLICABLE  
          PROVISION OF LAW?


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