Quota Reductions

DEA is out with its proposed 2020 aggregate production quotas for Schedule I and II controlled substances, and they have been reduced dramatically from 2019’s numbers. From the press release:

DEA proposes to reduce the amount of fentanyl produced by 31 percent, hydrocodone by 19 percent, hydromorphone by 25 percent, oxycodone by nine percent and oxymorphone by 55 percent. Combined with morphine, the proposed quota would be a 53 percent decrease in the amount of allowable production of these opioids since 2016.”

How’d They Get There?

Why the size of the decrease? Aside from the obvious political pressures attendant to legitimate concern over the proliferation of the opioid crisis and, perhaps, some less-legitimate political posturing, the DEA cites the usual factors and a significant new one. As always, DEA consults “many sources, including estimates of the legitimate medical need from the Food and Drug Administration; estimates of retail consumption based on prescriptions dispensed; manufacturer’s disposition history and forecasts; data from DEA’s internal system for tracking controlled substance transactions; and past quota histories.”

Continue Reading DEA Proposes Decreasing Opioid Quotas for 2020

Jeffrey Stein, M.D.; Decision and Order

Uttam Dhillon, DEA Acting Administrator, issued a final order today in the case of the revocation of a New York doctor’s DEA registration. But its implications go well beyond this doctor’s circumstances.

The Facts

Here are the basics. Dr. Jeffrey Stein was convicted of tax-related crimes in the Southern District of New York in 2015. Specifically, Dr. Stein had provided false receipts and other fabricated documents to his accountant to reduce the amount of taxes he would have to pay and, in turn, to mislead the IRS Auditor into believing that the claimed expenses were legitimate. Dr. Stein pled guilty to these charges. Of particular relevance to today’s order, Dr. Stein had used, among the fabricated materials, “the names of four disabled military veterans (including two former patients whose identities he obtained as a result of his work for the V.A, [and] . . . created bogus invoices in the names of those veterans.”

Continue Reading DEA Decisions: Registrations Not Automatically Revoked by Medicare/Medicaid Exclusions

Last week was an active week when it comes to marijuana policy. The Drug Enforcement Administration (DEA) announced that it will begin considering (and approving?) applications to allow for the manufacture (growing) of marijuana for research purposes. Shortly thereafter, United States Surgeon General, Vice Admiral Jerome M. Adams (Dr. Adams), issued an advisory regarding the significant adverse effects of marijuana use by adolescents and by women during pregnancy. Both developments could foreshadow the long road ahead for marijuana legalization advocates seeking DEA’s removal of marijuana from its listing as a schedule I controlled substance.

Continue Reading DEA and the Surgeon General Issue Statements Regarding Marijuana

Just as there are several factors that contributed to the opioid epidemic, there are a myriad of solutions that, in tandem, will make a difference in the lives of those impacted by opioid abuse and may prevent others from misusing and abusing these drugs. Roger Krone and his team at Leidos are executing a program that should be emulated by companies across the United States.

After receiving an email from an employee whose son recently lost his life to a drug overdose, Leidos CEO Roger Krone directed the creation of a corporate responsibility program focusing on drug abuse awareness, prevention, and treatment. The CEO Pledge was born from this initiative.

Continue Reading Be Part of the Solution to the Opioid Crisis – Make the Pledge!

On July 23, 2019, the Food and Drug Administration (FDA) announced the issuance of a Warning Letter to the manufacturer of certain products containing cannabidiol (CBD). Specifically, the FDA provided a laundry list of examples where Curaleaf, Inc. (Curaleaf) made unsubstantiated claims on its website and on social media “that the products treat cancer, Alzheimer’s disease, opioid withdrawal, pain and pet anxiety, among other conditions or diseases.” The FDA considers Curaleaf’s actions as the “illegal selling of unapproved products,” pursuant to the Federal Food, Drug, and Cosmetic Act.

Continue Reading FDA Issues Another Warning Letter Involving CBD Products

As I have previously written, there is a long list of regulatory changes coming from DEA in the next few years.  Rather than publish one or more of the long overdue regulations listed on DEA’s Regulatory Agenda, on April 30, 2019, the agency will publish a Final Rule creating a “discretionary review” process allowing the Administrator to review an Administrative Law Judge’s (“ALJ’s”) denial of a request for an interlocutory appeal.  Note that this is a Final Rule, not a Notice of Proposed Rulemaking.  The agency was able to bypass the traditional notice and comment rulemaking process by categorizing this rule as a Rule of Agency, pursuant to the Administrative Procedure Act.  As such, the rule is effective immediately.

Requests for interlocutory appeals can take many forms in a DEA administrative proceeding.  Often, they are a result of a procedural or evidentiary ruling by an ALJ during the prehearing process.  DEA regulations currently give ALJs broad authority to rule on a request to seek an interlocutory appeal.  The ALJ’s decision to deny a request for an interlocutory appeal is not reviewable.  Until now.

Continue Reading Does the New Rule on Interlocutory Appeals Undermine the Independence of DEA’s ALJs?

As you undoubtedly should know by now, on April 22, 2019, the United States Attorney for the Southern District of New York entered into a Deferred Prosecution Agreement (the “Agreement”) with the Rochester Drug Co-operative, Inc. (“RDC”).

Specifically, the government announced that

“RDC agreed to accept responsibility for its conduct by making admissions and stipulating to the accuracy of an extensive Statement of Facts, pay a $20 million penalty, reform and enhance its Controlled Substances Act compliance program, and submit to supervision by an independent monitor.”

Continue Reading Key Takeaways from the Rochester Drug Co-Op Deferred Prosecution Agreement

As required by the “SUPPORT for Patients and Communities Act” (Public Law 115-217), DEA just announced that it has implemented a new tool to provide drug manufacturers and distributors with access to anonymized ARCOS information.

This an enhancement to DEA’s existing tool that previously provided very limited ARCOS information.  The new functionality in the tool “will allow DEA-registered manufacturers and distributors to view and download the number of distributors and the amount (anonymized data in both grams and dosage units) each distributor sold to a prospective customer in the last available six months of data.”

DEA’s expectation is that the tool will be used to assist registrants with detecting and reporting suspicious orders and to fulfill their “know your customer” obligations.  As an example, DEA indicates “if a query resulted in a large number of suppliers who have recently sold unusual quantities of opioid analgesics to a prospective purchaser, this may represent a “red flag” to the new distributor and foster a dialogue between that distributor and the pharmacy.”

On February 21, 2019, the Drug Enforcement Administration (DEA) published a Notice of Proposed Rulemaking (NPRM), New Single-Sheet Format for U.S. Official Order Form for Schedule I and II Controlled Substances (DEA Form 222).  This is the agency’s second attempt at bringing the DEA Form 222 into the 21st Century.  In 2007, the agency issued a similar NPRM, but never published a Final Rule.

The current NPRM not only changes the format of the 222, but also proposes “minor procedural changes.”  Below is a summary of some of those changes.

Continue Reading DEA Issues Notice of Proposed Rulemaking for New 222 Form

After a brief hiatus, DEA Chronicles is back. As always, I will be keeping you informed on changes in the relevant laws and regulations and how these may impact your business. But, as regular readers know, we go beyond simple reporting. DEA Chronicles identifies DEA enforcement trends. We engage in policy analysis across the spectrum of issues involving controlled substances. What regulatory approaches best combine an effective strategy for combating diversion with a workable framework for the various actors in the pharmaceutical industry? What are the best practices designed to ensure compliance? What are the red flags that should alert companies to potential problems within their organizations? We explore these and all other questions regarding the enforcement of controlled substance laws and regulations.

Cote Law PLLC

So why the hiatus? The answer is simple and, for me at least, kind of exciting. After six and a half years with Quarles & Brady, I am pleased to announce that I have moved the DEA Litigation and Compliance practice to my new firm, Cote Law PLLC. I bring to my DEA practice a unique set of experience and skills. For one, I worked at DEA at a management level in the enforcement area. I know my way around the agency. I know how it operates and how it thinks. It is one thing to read a statute or a regulation. It is another to understand how the people at the agency approach the enforcement of these laws. 

Continue Reading Did You Miss Me?