As I was reviewing the public comments regarding the Drug Enforcement Administration’s (DEA’s) Notice of Proposed Rulemaking (NPRM) providing a much-needed update to the agency’s suspicious order regulations, I noticed a similar issue raised by multiple commenters.  Apart from the myriad of comments and requests seeking greater clarity from DEA on several definitions and provisions, there appears to remain a misunderstanding of using the 5% rule for distributions amongst practitioners.

As a reminder, DEA’s regulations allow practitioners to distribute, without being registered with DEA as a distributor, up to 5% of the total controlled substances dispensed in a calendar year.  While a useful tool, especially for intra-company transfers of controlled substances, I was never a big fan of how the rule was drafted.  The 5% calculation is based on a calendar year which means that a practitioner may not know if they violated the rule (and need to register as a distributor) until at or after the end of the calendar year.  While many of the registrants who use this rule to transfer controlled substances use it very sparingly, a few use it right up to the limit, which can be problematic.

Another beef I have with the rule (Is it possible to have a beef with a regulation? Maybe a topic for a future blog.), is the lack of a complete list of requirements in the 5% Rule provisions or, at a minimum, a citation or reference to additional regulatory requirements. Hence the confusion.

In the NPRM DEA states:

“…DEA believes all practitioners who distribute pursuant to the provisions of the five percent rule already understand the requirement to ‘‘design and operate a system’’ also applies to them as well.”

They do not, however, provide a citation.  This statement came as a surprise to some who rightly focused on the 5% Rule provisions at 21 CFR 1307.11(a) but did not scrub the regulations for requirements “hidden” elsewhere.  Specifically, 21 CFR 1301.76(c).

This is the legal basis for DEA’s statement in the NPRM and reads:

“Whenever the registrant distributes a controlled substance (without being registered as a distributor as permitted in §§1301.13(e)(1), 1307.111317.05, and/or 1317.10 of this chapter), he/she shall comply with the requirements imposed on non-practitioners in §1301.74(a), (b), and (e).”

As a reminder, the suspicious order regulations are found at 21 CFR 1301.74(b).

As DEA works on updating its regulations, it would be great for them to at least reference all regulatory requirement in the provisions for the 5% Rule.  Perhaps this can be a technical change made to the regulations as the Final Rule is rolled out?

Regardless, registrants should tread carefully with taking advantage of this rule.  In addition to the 5% calculation and suspicious order requirement, complete and accurate distribution records must be maintained to account for the transfer.  This is an area often overlooked by registrants and where civil monetary penalties may easily be obtained by the government.

Give me a call or send me an email if you want to chat more about this or any other DEA compliance matter.