BILL ANALYSIS                                                                                                                                                                                                    �







                      SENATE COMMITTEE ON PUBLIC SAFETY
                            Senator Loni Hancock, ChairS
                             2011-2012 Regular Session               B

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          SB 315 (Wright)                                             
          As Introduced February 14, 2011 
          Hearing date: April 26, 2011
          Health & Safety Code
          JM:dl


                                   PSEUDOEPHEDRINE: 

                      SALE OR DISTRIBUTION BY PRESCRIPTION ONLY  


                                       HISTORY

          Source:  Attorney General's Office

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

          Support: California Fraternal Order of Police; California 
                   Narcotics Officers Association; California Police 
                   Chiefs Association; Long Beach Police Officers 
                   Association; Los Angeles County Professional Peace 
                   Officers Association; Santa Ana Police Officers 
                   Association; California State Conference of the 
                   National Association for the Advancement of Colored 
                   People; County Alcohol and Drug Program Administrators 
                   Association of California; California State Sheriffs' 
                   Association; California District Attorneys Association

          Opposition:Rite Aid; Association of California Life and Health 
                   Insurance Companies; California Retailers Association; 
                   National Association of Chain Drug Stores; Consumer 
                   Healthcare Products Association; Reckitt Benckiser 












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                   Pharmaceuticals; Health Net; Los Angeles Society of 
                   Allergy, Asthma & Clinical Immunology; Peace Officers 
                   Research Association of California; Drug Policy 
                   Alliance; California Grocers Association; Bayer Heath 
                   Care; BIOCOM; Anthem Blue Cross; Johnson & Johnson; 
                   California Healthcare Institute; California Association 
                   of Health Plans; California Chapter of the Asthma and 
                   Allergy Foundation of America


                                        KEY ISSUES
           
          SHOULD PSEUDOEPHEDRINE, EPHEDRINE, NORPSEUDOEPHEDRINE AND 
          PHENYLPROPANOLAMINE BE SOLD OR DISTRIBUTED BY PRESCRIPTION ONLY?

          SHOULD POSSESSION OF PSEUDOEPHEDRINE AND THE OTHER SPECIFIED DRUGS 
          WITHOUT A PRESCRIPTION BE AN ALTERNATE MISDEMEANOR-INFRACTION?

                                          
                                       PURPOSE

          The purpose of this bill is to allow sale or distribution of 
          ephedrine, pseudoephedrine, norpseudoephedrine or 
          phenylpropanolamine by prescription only and to provide that a 
          person who obtains of one of these drugs without a prescription 
          is guilty of an alternate misdemeanor-infraction.
          
           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.




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                 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).) - the Combat 
          Methamphetamine Epidemic Act includes detailed restrictions and 
          requirements 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.
                 Purchaser must present valid identification.
                 The purchaser must sign a paper or electronic logbook, 
               as specified.

           Existing law  defines a dangerous drug as one that is unsafe for 
          self-use, including any drug that under federal or state law 
          must be obtained by a prescription.  (Health & Saf. Code � 
          4021.)  

           This bill  provides that ephedrine, pseudoephedrine, 
          norpseudoephedrine and phenylpropanolamine may be sold or 
          distributed by prescription only and eliminates statutory 
          provisions controlling over-the-counter sale of such products.

           This bill  creates an exemption from prescription requirements 
          for "pediatric liquids" containing such drugs.

           This bill  provides that any person who "obtains" 
          pseudoephedrine, or specified, related products is guilty of an 
          infraction-misdemeanor.

                    RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
          




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          For the last several years, severe overcrowding in California's 
          prisons has been the focus of evolving and expensive litigation. 
           As these cases have progressed, prison conditions have 
          continued to be assailed, and the federal court scrutiny of 
          California's prisons has intensified.  

          On June 30, 2005, in a class action lawsuit filed four years 
          earlier, the United States District Court for the Northern 
          District of California established a Receivership to take 
          control of the delivery of medical services to all California 
          state prisoners confined by the California Department of 
          Corrections and Rehabilitation ("CDCR").  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 January 12, 2010, a 
          three-judge federal panel issued an order requiring California 
          to reduce its inmate population to 137.5 percent of design 
          capacity -- a reduction at that time of roughly 40,000 inmates 
          -- within two years.  The court stayed implementation of its 
          ruling pending the state's appeal to the U.S. Supreme Court.  

          On Monday, June 14, 2010, the U.S. Supreme Court agreed to hear 
          the state's appeal of this order and, on Tuesday, November 30, 
          2010, the Court heard oral arguments.  A decision is expected as 
          early as this spring.  

          In response to the unresolved prison capacity crisis, in early 
          2007 the Senate Committee on Public Safety began holding 
          legislative proposals which could further exacerbate prison 
          overcrowding through new or expanded felony prosecutions.     

           This bill  does not appear to aggravate the prison overcrowding 
          crisis described above.


                                      COMMENTS

            1.  Need for This Bill
           
          According to the author:




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               There are few examples of legislation that both 
               increase public safety and save the state general fund 
               money.  SB 315, legislation to make products 
               containing pseudoephedrine available by prescription 
               only, does just that.  The economic cost of 
               methamphetamine use in the United States was a 
               staggering $23.4 billion in 2005, including the burden 
               of addiction, premature death, drug treatment and many 
               other aspects of the drug, according to a 2008 RAND 
               Corporation study.  With the most recent increase in 
               the numbers of methamphetamine lab, and the huge 
               increase in the amount of pseudoephedrine being 
               imported into the United States, these costs will only 
               increase.  SB 315 is about facts, and the industry 
               that opposes prescription only cannot, and will not, 
               provide facts in opposition.

               The following are facts:



                  -         The number of methamphetamine labs is 
                    increasing yearly, especially in states like 
                    Kentucky that have implemented a computer 
                    tracking/stop sale system.
                  -         States with a prescription-only system 
                    have seen dramatic decreases in meth labs.  
                    Oregon has gone from averaging more than 
                    four-hundred labs per year to averaging less than 
                    12.  In the first 8 months of implementation, 
                    Mississippi has seen more than a seventy percent 
                    drop in meth lab numbers.


                  -         In the past two years, Kentucky (the 
                    industry "Gold Standard") has broken its own 
                    record for the number of meth labs discovered.






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                  -         Since implementation of the federal 
                    Combat Meth Act (purchase limit of 9 grams per 
                    month, the industry has almost doubled its 
                    importation of pseudoephedrine.


                  -         The number of California citizens seeking 
                    treatment for addition for meth now outpaces 
                    those seeking treatment for alcohol addiction.


                  -         California is fifth in the nation for the 
                    number of meth labs discovered.  However, 
                    California produces more methamphetamine than the 
                    top four states combined.


                  -         California by far contains the most Super 
                    Labs (a lab capable of making more than 10 pounds 
                    of meth) in the Nation.


                  -         The industry makes hundreds of millions 
                    of dollars off of pseudoephedrine that ends up in 
                    American meth labs each year.


               The industry response to these facts is to list a 
               number of terrible consequences to making products 
               containing pseudoephedrine available by prescription 
               only:



                  -         Users of pseudoephedrine will overwhelm 
                    emergency rooms with request for the drug:  This 
                    never happened in Oregon and has yet to happen in 
                    Mississippi.
                  -         The cost for products containing 
                    pseudoephedrine will skyrocket:  The Department 




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                    of Justice, Bureau of Narcotic Enforcement 
                    contacted pharmacies across Oregon to poll the 
                    costs of products containing pseudoephedrine.  
                    The costs of the products were equal to, and 
                    sometimes cheaper than, the same products sold in 
                    California.


                  -         Consumers would lack access to cold and 
                    allergy medications:  The Department of Justice, 
                    working with Oregon law enforcement, reached out 
                    to homeless advocates in the state of Oregon.  
                    There was no outcry over the prescription only 
                    legislation and consumers purchased the 
                    off-the-shelf versions of the product.


                  -         Costs to Medical will skyrocket:  
                    Oregon's version of Medical saw a total increase 
                    of about seven-thousand dollars for the entire 
                    state.


               SB 315 is common sense legislation that will severely 
               reduce the meth lab problem in California.
           
          2.  Access to Decongestant Medications Under This Bill for Persons 
            With Little or No Access to Physicians; Efficacy Comparisons 
            Between Pseudoephedrine and Alternatives

           Many consumers rely on pseudoephredine products to ease nasal 
          congestion due to colds, allergies and related maladies.  A 
          prescription is not required in California, and these 
          medications are readily available to people without medical 
          insurance or non-emergency access to physicians.  By requiring a 
          prescription for pseudoephedrine, this bill would limit or deny 
          access to this medication for Californians who do not have ready 
          access to a health care provider. 

          In recent years, because of restrictions on pseudoephedrine the 




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          pharmaceutical industry has developed and marketed alternatives. 
           The most common substitute is phenylephrine.  A recent article 
          by Gayle Nicholas Scott, Pharm. D.,<1> reviewed the relative 
          efficacies of pseudoephedrine and phenylephrine.  Dr. Scott 
          concluded:  "Phenylephrine appears to have less decongestant 
          activity than pseudoephedrine  ." She also noted that 
          phenylephrine has a shorter half-life than pseudoephredine, thus 
          requiring more frequent use.  Should this bill pass this 
          Committee, the Senate Health Committee, to which it has been 
          double referred, may explore these access and efficacy issues in 
          greater depth.

          WOULD THIS BILL ALLOW THOSE WITH LIMITED ACCESS TO PHYSICIANS, 
          OR LIMITED FUNDS FOR TREATMENT, TO OBTAIN AN EFFECTIVE 
          MEDICATION WITHOUT A PRESCRIPTION?

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



          3.  Restrictions on Pseudoephedrine in Other States  

          According to the 2010 Drug Threat Assessment by the U.S. 
          Department of Justice, 45 states have enacted pseudoephedrine 
          restrictions.  (2010 Threat Assessment, USDOJ., pp. 66-67.)  
          Twenty states have made pseudoephedrine a controlled substance, 
          typically with an exception for over the counter sales 
          consistent with federal law.  Forty-three states have imposed 
          point-of-sale restrictions, and 26 have pseudoephedrine tracking 
          laws.  (Ibid.)

          Oregon has required a prescription for any pseudoephedrine 
          purchase since 2006.  Mississippi has required a prescription 
          ---------------------------

          <1> 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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          since July, 2010.  It appears that the following states have 
          some sort of electronic tracking of pseudoephedrine sales:  
          Alabama, Arkansas, Florida, Illinois, Iowa, Kansas, Kentucky, 
          Louisiana, Missouri, Oklahoma, South Carolina, and Washington.  


          Kentucky is the state most often mentioned as concerns 
          electronic tracking. The Kentucky State Police have recently 
          reported a sharp increase in methamphetamine labs from 2008 
          through 1010 of 429 to 1078.  Industry representatives have 
          argued in hearings and meetings that the electronic tracking law 
          has helped law enforcement find labs that would have otherwise 
          gone undetected.  


          4.  New "Shake and Bake" Method for Making Small Batches of 
          Methamphetamine 


           A new small-scale process - the "shake and bake" or "one pot" 
          method - is increasingly popular.  One mixes crushed 
          pseudoephedrine tablets, a substance such as ammonia nitrate, 
          lithium battery strips, drain cleaner (or similar product) and 
          water in a container such as a 2-liter bottle.  Recipes call for 
          about 200 tablets of pseudoephedrine, an amount within the 
          monthly legal limit.   

          One-pot cooking may create less danger to the public than 
          traditional cooking methods.  An August 2009, AP story stated 
          that the method produces enough for only a "few hits."  While 
          there is substantial danger that a bottle used to make a small 
          batch of methamphetamine could explode, the danger appears to 
          mainly be to the cooker and persons in the immediate vicinity, 
          although one-pot cooking can cause particularly intense fires, 
          including a fire in an apartment.<2>

          Traditional cooking methods create serious risks of explosion.  
          ---------------------------
          <2>   See 
          http://www.msnbc.msn.com/id/32542373/ns/us_news-crime_and_courts/
          .



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          There are reports of entire apartments exploding.  (WKRG.com, 
          July 7, 2009.)  In addition, traditional methods produce 
          relatively large amounts of waste chemicals that are often 
          dumped into the environment.  Children are particularly subject 
          to contamination by methamphetamine manufacturing.  

          WILL THE "SHAKE AND BAKE" OR "ONE POT" METHAMPHETAMINE METHOD, 
          WHICH USES RELATIVELY SMALL AMOUNTS OF PSEUDOEPHEDRINE, MAKE IT 
          MORE DIFFICULT TO PREVENT DIVERSION OF PSEUDOEPHEDRINE?




          5.  National Rise in Laboratory Discoveries Derive from the 
            One-Pot Method; Most Superlabs (10 lb. Capacity) are 
            Found in California  

          The 2010 Methamphetamine Threat Assessment published by the U.S. 
          DOJ National Drug Intelligence Center noted that an increasing 
          proportion of "laboratory" seizures or incidents result from 
          one-pot or shake and bake manufacturing:

               Domestic methamphetamine laboratory seizures increased 
               from 3,096 laboratories in 2007 to 3,950 in 2008 to 
               5,308 in 2009.  Analysis of laboratory seizure data 
               indicate that the increase -71 percent since 2007 - 
               primarily is due to an increase in the prevalence of 
               small-scale "one pot," or "shake and bake" ...  
               method.  In fact, of the small-scale laboratories 
               seized between 2007 and 2009, the number of 
               small-scale lithium ammonia method laboratories 
               increased 158 percent overall- from 1,583 in 2007 to 
               2,584 in 2008 to 4,089 in 2009.

               Domestic superlab seizures did not change 
               significantly during this period.  The number of 
               superlabs �capable of producing 10 lbs. or more of the 
               drug in a cycle] seized increased only slightly from 
               2007 (11) to 2008 (17) before decreasing in 2009 (14). 
               ? 13 �superlabs] were seized in California and one in 




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               Georgia.  Rising methamphetamine production in 2009 
               was realized in six of the nine ? regions, with the 
               most notable increase occurring in the Great Lakes 
               Region.  ? Of the 1,640 ... laboratories seized in the 
               region in 2009, most ? were capable of producing only 
               2 ounces or less...  (Italics on superlabs in 
               California added.)

          DO MANY OF THE METHAMPHETAMINE LABORATORIES FOUND IN RECENT 
          YEARS REFLECT USE OF THE SMALL-SCALE SHAKE AND BAKE METHOD?

          IF SO, WHAT DOES THE RISE IN THE SMALL-SCALE MANUFACTURE OF 
          METHAMPHETAMINE MEAN IN TERMS OF THE VALUE OF THIS BILL IN 
          COMBATTING METH LABS?

          6.  US DOJ Reports Increased "Smurfing" - Obtaining 
            Pseudoephedrine for Methamphetamine through Numerous Purchases 
            of Legal Amounts - in California  

          "Smurfing" involves purchases of small amounts of 
          pseudoephedrine from numerous drug stores.  Law enforcement 
          representatives argue that even where smurfers violate federal 
          law in purchasing more than 9 grams in a month, the lack of 
          adequate resources to review electronic and paper purchase logs 
          allows smurfing to continue.   Law enforcement opponents of 
          state-wide electronic tracking systems for pseudoephedrine 
          sales, such as is employed in Kentucky, argue that such systems 
          can be defeated by relatively common use of false identification 
          and fraud.

          As noted in Comment 5 above, the National Drug Intelligence 
          Center (NDIC) has reported that superlabs have used smurfed 
          pseudoephedrine.  The 2009 report stated:  "Mexican criminal 
          groups and some independent operators �acquire] bulk quantities 
          of pseudoephedrine through smurfing."  The report stated that 
          some pseudoephedrine smurfed in California was sent to Mexico 
          for methamphetamine production.   The NDIC report appears to 
          support a conclusion that the percentage of labs or 
          manufacturing sites that were superlabs increased in 2008 and 
          2009, although the total number of incidents fell.




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          If obtained through legal over-the-counter purchases, the amount 
          of pseudoephedrine packages required to make 10 pounds of 
          methamphetamine is nearly mind-boggling.  To assemble 10 pounds 
          of pseudoephedrine would require 1583 of the largest packages - 
          96 tablets of 30 mgs. each - of pseudoephedrine.   Such an 
          amount would require a large and sophisticated smurfing 
          operation.  Representatives of the Attorney General report that 
          smurfing schemes have involved around 100 persons.<3>  

          The difficulty of obtaining large amounts of pseudoephedrine by 
          smurfing raises the question of whether methamphetamine 
          superlabs obtain bulk pseudoephedrine through diversion of 
          legitimate product or fraud.  Laboratories have been found with 
          great piles of pseudoephedrine retail packages.  That does not 
          explain how the meth makers were able to obtain so many 
          packages.

          IS A LARGE AND RELATIVELY SOPHISTICATED OPERATION REQUIRED TO 
          SMURF THE AMOUNT OF PACKAGES (NEARLY 1600 96-TABLET PACKAGES) TO 
          OBTAIN 10 POUNDS OF PSEUDOEPHEDRINE?
           
          HAVE SUPERLAB OPERATORS OBTAINED PSEUDOEPHEDRINE THROUGH 
          DIVERSION AND FRAUD?

          7.  Oregon Law Requires a Prescription for Pseudoephedrine; 
                                                Prescription Proponents   Attribute the Drop in Oregon Meth 
          Laboratories to that Law: Related Mississippi      Data  
          
          -------------------------
          <3> The number of purchases needed to obtain 10 pounds of 
          pseudoephedrine is 1266.  One person can purchase 3.6 grams at a 
          time.  There are 4560 grams in 10 pounds.  4560 divided by 3.6 
          is 1266.   Such purchases would likely exceed monthly limits, 
          but smurfers can exceed the monthly maximum if they buy from 
          stores that do not have a single tracking system.  (Most chain 
          stores track pseudoephedrine sales electronically. The larger 
          chains have begun to coordinate their systems.)   Nevertheless, 
          a very large number of separate purchases would be required to 
          obtain the pseudoephedrine necessary to make 10 pounds of 
          methamphetamine.



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          Proponents of the 2006 Oregon law that requires a prescription 
          for pseudoephedrine attribute the dramatic reduction of 
          methamphetamine laboratory incidents in Oregon to the 
          prescription law.  They argued that the law prevents "smurfing" 
          of pseudoephedrine through multiple over-the-counter purchases 
          of the drug in an amount allowed by law. 

          As noted above, Mississippi has required a prescription for 
          pseudoephedrine since July 2010.  A March 16, 2011 Associated 
          Press story noted:  "Mississippi Bureau of Narcotics statistics 
          show meth lab busts in Mississippi have decreased significantly 
          since the law went into effect July 1.  From July 2009 through 
          February 2010, 607 meth labs were seized. From July 2010 to 
          February of this year, the number dropped to 203, a nearly 67 
          percent decrease."<4>  

                   Meth Lab Incidents<5> in Oregon 2003-2010
          
                ----------------------------------------------------- 
               |2003                      |419                       |
               |--------------------------+--------------------------|
               |2004                      |417                       |
               |--------------------------+--------------------------|
               |2005                      |189                       |
               |--------------------------+--------------------------|
               |2006 (Rx law              |55                        |
               |enacted)                  |                          |
               |--------------------------+--------------------------|
               |2007                      |22                        |
               |--------------------------+--------------------------|
               |2008                      |19                        |
               |--------------------------+--------------------------|
               |2009                      |12                        |
          ---------------------------
          <4>   See 
          http://wcbi.com/article.php?subaction=showfull&id=1300296084&arch
          ive=&start_from=&ucat=2,4,5, 45&.
          <5> A laboratory "incident" is defined by the DEA as including 
          labs, dumpsites and chemical or glassware seizures.  Thus, the 
          number of laboratory incidents does not necessarily reflect the 
          number of labs actually producing methamphetamine.



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               |--------------------------+--------------------------|
               |2010                      |9                         |
                ----------------------------------------------------- 
          
          Oregon Population: 2010: 3,831,074 (US Census Data)
          0.23 labs per 100,000

          The following table illustrates data for California:
          
                  Meth Lab Incidents in California, 2003- 2010
          
                ----------------------------------------------------- 
               |2003                      |1,281                     |
               |--------------------------+--------------------------|
               |2004                      |767                       |
               |--------------------------+--------------------------|
               |2005                      |468                       |
               |--------------------------+--------------------------|
               |2006                      |353                       |
               |--------------------------+--------------------------|
               |2007                      |221                       |
               |--------------------------+--------------------------|
               |2008                      |346                       |
               |--------------------------+--------------------------|
               |2009                      |264                       |
               |--------------------------+--------------------------|
               |2010                      |170                       |
               |                          |                          |
                ----------------------------------------------------- 
               
          California Population 2010:  37,253,956 (US Census Data)
          0.45 labs per 100,000 
          
          WOULD THE OREGON APPROACH BE MORE EFFECTIVE IN REDUCING THE METH 
          LAB PROBLEM THAN THE CURRENT CALIFORNIA AND FEDERAL REGULATIONS 
          OF OVER-THE-COUNTER SALES?



          WOULD THE OREGON APPROACH ADVERSELY AFFECT CONSUMERS WHO CANNOT 




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          AFFORD A PRESCRIPTION?   IF SO, WOULD ITS INTENDED BENEFITS 
          OUTWEIGH ITS POTENTIAL ADVERSE CONSEQUENCES?

          8.  Oregon Methamphetamine Situation:  Concerns over Continuing 
            Demand for Methamphetamine; Mexican Drug Trafficking 
            Organizations; National Issues  

          Oregon Methamphetamine Issues since Enactment of Pseudoephedrine 
          Prescription Law
          
          As long as demand for the drug is high, eliminating California 
          manufacturing of methamphetamine arguably will not diminish use 
          if the drug remains available from other sources, such as 
          Mexico.  For example, use of methamphetamine is still quite 
          prevalent in Oregon, despite a substantial decrease in 
          laboratory discoveries.  The Oregon Addictions and Mental Health 
          Services Department website states: "For a decade, Oregon has 
          led the nation in methamphetamine-treatment admissions per 
          100,000 people; treatment admissions for methamphetamine are 
          second only to those for alcohol."  However, in 2007, a year 
          after Oregon required a prescription for pseudoephedrine, the 
          Oregon Health Science University reported that emergency room 
          visits for meth were down from 2006-2007.  

          While that data is still widely cited, numerous reports have 
          stated that meth from Mexico had increasingly replaced locally 
          made meth in Oregon by 2009.  That could affect more recent 
          data. 
          The 2011 Threat Assessment by the Oregon High Intensity Drug 
          Trafficking Area organization (a combination of federal and 
          state agencies) found the following:

                 Laboratory seizures remain very low.
                 "Methamphetamine use remains at a high level" in Oregon.
                 Methamphetamine is the greatest drug threat and 
               contributes most to violent crime and property crime, as 
               reflected by law-enforcement opinion surveys.
                 Methamphetamine is increasingly high-potency crystal or 
               "ice," instead of powder.
                 Mexican traffickers imported finished product from 




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               Mexico and other points outside Oregon; Mexican DTOs 
               increasingly control the methamphetamine business.
                 Mexican DTOs effectively altered operations to deal with 
               precursor restriction law.
                 All drug-related deaths were down in 2009, including 
               methamphetamine-related deaths.  Meth-related death 
               increased 2007-2008.  2009 deaths were above 2001-2006 
               levels. 
                 Methamphetamine treatment admissions dropped from 2005 
               to 2009, after a sharp increase from 2003-2005.  Reductions 
               in treatment availability may have contributed to the 
               reduction.
                 Methamphetamine arrests were down 26% from 2007-2009.  
               This reduction could reflect redirection of law enforcement 
               resources away from drug labs to drug trafficking, which is 
               more difficult to investigate and prosecute.
                 Methamphetamine prison sentences rose 59% from 
               2006-2009, due in part to increased statutory penalties.
                 Methamphetamine use reporting by inmates increased from 
               2005-2009, but decreased 18% from 2006-2009.
                 Measures of workplace methamphetamine use were mixed.<6>
          WHAT IS THE OREGON EXPERIENCE WITH METHAMPHETAMINE TRAFFICKING, 
          USE AND HARM AFTER ENACTMENT OF A PRESCRIPTION REQUIREMENT FOR 
          PSEUDOEPHEDRINE?

          Concerns in the Midwest over Mexican Drug Trafficking 
          Organizations and Methamphetamine after Enactment of 
          Pseudoephedrine Restrictions
          
          Any policy change that results in an increase in importation of 
          methamphetamine from Mexico, even a law that has the substantial 
          benefit of reducing illicit laboratories in California, could 
          still have adverse consequences.  Law enforcement and media 
          sources have noted an increase in violence used by Mexican drug 
          trafficking organizations (DTOs) in the United States, including 
          significant increases in violence related to Mexican DTOs in 
          border states.  (Mexican Drug Cartel Violence Spills Over, 
          ---------------------------
          <6>   
          http://www.co.umatilla.or.us/pdf/Sheriff_2011_OR_HIDTA.pdf.




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          Alarming U.S., New York Times, March 22, 2009.)

          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.  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 
               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 increased distribution of meth;
                 Methamphetamine became more potent and addictive;
                 Overdoses increased; and
                 In Iowa, methamphetamine prices increased, as did 
               burglaries.

          WILL MEXICAN DRUG TRAFFICKING ORGANIZATIONS MEET THE DEMAND FOR 
          METHAMPHETAMINE, WITH ASSOCIATED HARMS?

          9.  2010 U.S. Department of Justice National Methamphetamine 
            Analysis: Dominance by Mexican DTOs, Reduced Domestic 
            Production  

          The 2010 U.S. DOJ Methamphetamine Threat Assessment was 
          published in the New York Times without release by the National 
          Drug Intelligence Center.  The Times stated that the report was 
          likely not publicly released because of concerns over offending 
          the Mexican government.  The Times stated that the assessment 
          "portrays drug cartels as easily able to circumvent the Mexican 
          government's restrictions on the importing of chemicals used to 
          manufacture meth, which has reached its highest purity and 
          lowest price in the United States since 2005."  (U.S. Delays 
          Report tying Meth to Mexico, New York Times, June 8, 2010.)




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          The Executive Summary of the assessment presents a pessimistic 
          portrait of the situation in the United States.  Arguably, the 
          only positive conclusion in the assessment is that "�a]s Mexican 
          ? 
          production increases, the need for domestic production will 
          decrease.  Preliminary first-quarter 2010 data on 
          methamphetamine laboratory seizures reflect a downward trend in 
          domestic production - the result of restored availability of 
          Mexico-produced product."

          The report noted increased smuggling of pseudoephedrine into 
          Mexico and use of non-pseudoephedrine methods of making 
          methamphetamine, particularly the P2P (phenyl-2-propanone) 
          method.  P2P methamphetamine is less potent than methamphetamine 
          made with pseudoephedrine, thus reducing some of the harm caused 
          by methamphetamine abuse.

          The report states:

               �M]ethamphetamine availability is high and increasing, 
               as evidenced by supplies of the purest methamphetamine 
               available in U.S. markets since 2005, at prices that 
               currently reflect a 5-year low.  As Mexican 
               methamphetamine production increases ? domestic 
               production will decrease.  Preliminary first-quarter 
               2010 data on methamphetamine laboratory seizures 
               reflect a downward trend in domestic production -- the 
               result of the restored availability of Mexico-produced 
               methamphetamine?.  (DOJ 2010 Meth. Threat Assess., 
               p.1, italics added.)

          The amount of methamphetamine shipped into the U.S. by Mexican 
          DTOs in 2009 exceeded the amount shipped in 2005, the year that 
          pseudoephedrine restrictions began in Mexico.  The DOJ 
          attributed much of the increase in Mexican production to the use 
          of the P2P method.

          However, the United Nations - International Narcotics Control 
          Board (INCB) - has noted that Mexican DTOs have contracted with 




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          Asian pseudoephedrine manufacturers.  (Precursors, INCB 2008 
          Report, pp. 7-8.)  The INCB reported that Mexican DTOs 
          established operations in Africa and the Middle East to obtain 
          precursors, with Mexico as the final destination.  (Precursors, 
          INCB 2008 report, pp. 7-8.)  Further, the 2009 DOJ threat 
          assessment noted that Mexican DTOs have little difficulty 
          obtaining pseudoephedrine in Central and South America.  (2009 
          National Drug Threat Assessment, DEA, pp. 13-16.)

          TO WHAT EXTENT IS DOMESTIC METHAMPHETAMINE PRODUCTION DECREASING 
          AS A RESULT OF WIDELY AVAILABLE AND INEXPENSIVE METHAMPHETAMINE 
          PRODUCED IN MEXICO?

          IS HARM REDUCED TO USERS IF LESS POTENT P2P METHAMPHETAMINE 
          REPLACES SOME METHAMPHETAMINE MANUFACTURED IN CALIFORNIA FROM 
          PSEUDOEPHEDRINE?

          10.   Drug Demand and Treatment Issues  

          It has been argued that the only lasting solution for the 
          problems created by methamphetamine use and manufacturing is to 
          reduce demand through treatment.  While funding for treatment 
          programs is very limited, it is also costly to incarcerate 
          methamphetamine offenders.  UCLA analyzes the Substance Abuse 
          and Crime Prevention Act (SACPA - Prop. 36 in 2000).  UCLA 
          researchers concluded that SACPA has save $2.00 for every $1.00 
          spent on the program.  Where a person completed the program, 
          every $1.00 spent saved $4.00.  The UCLA researchers found that 
          progress has been made in treating methamphetamine abusers.  The 
          2008 report concluded:  "Proposition 36 substantially reduced 
          incarceration costs and resulted in greater cost savings for 
          some eligible offenders than for others."  (UCLA SACPA Report, 
          2008, p. 11.)

          SHOULD THE STATE CONCENTRATE METHAMPHETAMINE CONTROL EFFORTS ON 
          REDUCING DEMAND FOR THE DRUG?

          DOES STEADY DEMAND FOR METHAMPHETAMINE MAKE IT LIKELY THAT NEW 
          SELLERS WILL MEET THE DEMAND WHEN OTHERS ARE INCARCERATED?





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          11.        Assembly Bill 1280 (Hill) Would Require Electronic 
            Tracking of Pseudoephedrine Sales, including a Prohibition on 
            any Sale over Federal Monthly Purchase Limits  

          AB 1280 (Hill) - pending in the Assembly Public Safety Committee 
          - is an alternative or competing measure designed to limit 
          illicit methamphetamine manufacturing and methamphetamine abuse. 
           AB 1280 would mandate an electronic tracking system for 
          purchases of pseudoephedrine.  Any retailer of pseudoephedrine 
          would be required to participate in the system.  A purchaser's 
          information would be entered into the system.  Attempted 
          purchases beyond the federal monthly limit would trigger a 
          notice to the retailer to not complete the sale.  Law 
          enforcement would have access to the system.  The costs of the 
          system would be borne by private industry, not the state.

          12.  Pseudoephedrine Prescription and Electronic Tracking Bills 
            in 2009-2010 Session  

          A measure that would have required a unified electronic tracking 
          system for sales of pseudoephedrine - AB 1455 (Hill), was 
          introduced in the 2009-2010 Session.  The bill passed this 
          Committee, but was held in Senate Judiciary Committee.

          SB 484 (Wright), which would have required a prescription for 
          sale of pseudoephedrine, was also introduced in the 2009-2010 
          session.  That bill passed this Committee and the Senate Floor, 
          but was defeated in the Assembly Public Safety Committee.

          13.   Suggested Amendment - Allow Minors to Possess 
            Pseudoephedrine Pursuant to a Prescription  

          It appears that this bill would prohibit any minor from 
          obtaining or possessing pseudoephedrine, even where a physician 
          has prescribed the drug.  Existing law includes a prohibition on 
          possession of pseudoephedrine by a minor, and a prohibition on 
          transfers of pseudoephedrine to a minor, except for valid 
          over-the-counter sales of the drug.  This bill, in eliminating 
          the exception for valid over the counter purchases by persons 












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          under the age of 18, did not include a new exception for minors 
          who have a prescription for a pseudoephedrine product.

          DOES THE BILL INADVERTENTLY PROHIBIT POSSESSION OF 
          PSEUDOEPHEDRINE BY A MINOR, EVEN WHERE THE MINOR HAS A 
          PRESCRIPTION FOR THE DRUG?

          SHOULD THE BILL BE AMENDED TO ALLOW A MINOR TO OBTAIN 
          PSEUDOEPHEDRINE BY PRESCRIPTION? 

          14.   Suggested Amendments - Sunset and Report on Effectiveness 
            of the Bill  

          The primary aim of this bill is to reduce the incidence of 
          methamphetamine labs, largely by eliminating the ability of 
          illicit methamphetamine makers to obtain the precursor chemical 
          pseudoephedrine through numerous over-the-counter purchases, or 
          smurfing.   Methamphetamine manufacturing can be directly 
          dangerous and explosive, and the process creates toxic waste.  
          The sponsor argues that Oregon and Mississippi have been 
          successful in this regard by requiring a prescription for 
          pseudoephedrine.

          The sponsor also seeks to limit abuse of methamphetamine.  
          However, that goal appears to be more elusive than reducing 
          labs, as Mexican DTOs have been able to distribute 
          methamphetamine relatively successfully in Oregon and around the 
          country.

          Because methamphetamine manufacturing is toxic and dangerous, 
          and because methamphetamine abuse is arguably the greatest drug 
          threat in California, members may wish to evaluate the efficacy 
          of this bill in reducing illicit methamphetamine manufacturing 
          and methamphetamine abuse by adding a two-year sunset to the 
          bill, and requiring a report to the Legislature on the effects 
          of the bill. 

          SHOULD THIS BILL INCLUDE A TWO-YEAR SUNSET AND A REPORT TO THE 
          LEGISLATURE ON THE EFFECTIVENESS OF THE BILL IN REDUCING 
          METHAMPHETAMINE LABORATORIES AND METHAMPHETAMINE ABUSE?












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