DEA Compliance

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Prescription and magnifying glassWith the filing of two class action lawsuits, one against Walgreens and Costco, and one against CVS, in two federal district courts on August 6, pharmacies find themselves in a perplexing situation (yet again). For these suits were filed not by those who suffered from the over-dispensing of opioids, but by chronic pain patients who were denied opioid medication by pharmacies.

On June 5, 2020, the Office of Management and Budget (OMB) received an Interim Final Rule from the Drug Enforcement Administration titled, Implementation of the SUPPORT Act: Dispensing and Administering Controlled Substances for Medicated-Assisted Treatment.  This rule implements certain provisions of the SUPPORT Act “relating to the expansion of medication-assisted treatment providers and to the delivery of a controlled substance by a pharmacy to a practitioner.”

In response to issues raised by the Healthcare Distribution Alliance (“HDA”), earlier this week the Drug Enforcement Administration (“DEA”) published additional guidance for DEA-registered distributors on the agency’s COVID-19 Information Page.  Among other issues previously addressed by DEA, the recent guidance addresses suspicious order monitoring and conducting due diligence on customers.

In its ongoing efforts to ensure an adequate supply of controlled substances for the legitimate medical needs of the United States, DEA is granting a temporary exception to 21 C.F.R. 1307.11 – what industry commonly refers to as the 5% Rule.

The 5% Rule allows practitioners to distribute controlled substances without being registered as a distributor, if they fulfill certain requirements.  In addition to the security and recordkeeping obligations, practitioners wishing to use the authority granted by the 5% Rule must ensure that the “total number of dosage units of all controlled substances distributed by the practitioner pursuant to this section … during each calendar year in which the practitioner is registered to dispense does not exceed 5 percent of the total number of dosage units of all controlled substances distributed and dispensed by the practitioner during the same calendar year.”

As you are likely aware, the Drug Enforcement Administration (DEA) has created a COVID-19 Information Page to “assure that there is an adequate supply of controlled substances” during the current public health emergency associated with the coronavirus. DEA previously published guidance regarding telemedicine and Medication Assisted Treatment, where the agency granted certain exceptions to regulatory requirements.

In the past few days, DEA issued additional guidance regarding other areas of concern brought to the agency’s attention by the regulated industry.  Below is a quick summary of that guidance:

It appears that the Drug Enforcement Administration (DEA) is on the cusp of publishing a new regulation in the next few weeks, with two more to follow in the coming months.  This is based on notifications received by the Office of Management and Budget (OMB), the government’s final review authority for Executive Branch regulations.

On January 20, 2020, the Government Accountability Office (GAO) released its report Drug Control: Actions Needed to Ensure Usefulness of Data on Suspicious Opioid Orders.  The report, mandated by Congress in the SUPPORT Act, focuses almost exclusively on the need for the Drug Enforcement Administration (DEA) to beef up its capabilities for analyzing the vast amount of data provided to DEA by registrants. GAO’s investigation revealed, among other things, that DEA conducted “limited proactive and robust analysis of industry reported data” and that DEA did not have the appropriate data governance structure in place to manage drug transaction data.

On October 23, 2019, the Drug Enforcement Administration (DEA) announced the launch of its Suspicious Orders Report System (SORS) Online, a portal allowing for the centralized reporting of suspicious orders, as required by the SUPPORT ACT.

According to DEA’s announcement, 12 registrant business activity classes will utilize this reporting system:

  • Distributors
  • Manufacturers
  • Importers
  • Pharmacies
  • Hospitals/Clinics
  • Teaching Institutions
  • Practitioners
  • Mid-Level Practitioners
  • Mid-Level Practitioners – Ambulance Services
  • Researchers
  • Analytical Labs
  • Narcotic Treatment Programs (NTPs)

Reverse distributors and exporters are excluded from the requirement.

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.