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.
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.
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.”
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.
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.
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.
The Department of Justice recently published its list of proposed regulatory actions for the near and long term. It appears that the Drug Enforcement Administration’s (DEA’s) Regulatory Drafting and Support Section is going to have a busy year. The Unified Agenda indicates several potential regulatory changes are in store for the coming year, some of which may have significant impact on the regulated community.
A few highlights:
- Updates to the suspicious order regulation have been delayed to at least February 2019.
- DEA will provide guidance for Emergency Medical Services wishing to handle controlled substances.
- After more than nine years, DEA is finally implementing regulations regarding the practice of telemedicine, as required by Congress in the Ryan Haight Act.
- Guidance is forthcoming regarding the partial filling of prescriptions for Schedule II controlled substances as a result of related provisions in the Comprehensive Addiction and Recovery Act (CARA) of 2016.
- It appears that additional (and significant changes) will be coming to DEA’s quota process.
- DEA is getting rid of the carbon copy 222 form! (for those too young to understand the concept of carbon copies, click here)
Below are links to each notification and a summary taken directly from the related Abstract.
Stay tuned. We will provide updates as they become available.
In a joint statement by the U.S. Department of Justice and the Drug Enforcement Administration, the government announced continued efforts to tackle the opioid crisis by reducing the quantity of controlled substances permitted to be manufactured next year. The proposal decreases the 2019 Aggregate Production Quotas (APQ) for six of the most frequently misused opioids by an average of ten percent compared to 2018 quotas. The proposed production quotas for the six opioids will cut the 2018 quotas from 7% to 15% in 2019. The proposal seeks to advance the effort taken by President Trump’s “Safe Prescribing Plan,” which aims to “cut nationwide opioid prescription fills by one-third within three years.” The six drugs addressed by this action are oxycodone, hydrocodone, oxymorphone, hydromorphone, morphine, and fentanyl.
It appears that the percentage reduction of quota for these six drugs was not based on diversion statistics compiled by DEA and the Notice does not otherwise provide specific justification for the reduction in quota. In the joint statement, the government indicated that the goal of the reduction is to “encourage vigilance on the part of opioid manufacturers, help DEA respond to the changing drug threat environment, and protect the American people from potential addictive drugs while ensuring that the country has enough opioids for legitimate medical, scientific, research, and industrial needs.”
This marks the third straight year that the DEA has proposed such APQ reductions for controlled substance manufacturing in the U.S., a trend that does not appear to be slowing down. In addition to the government’s stated goals, it will be interesting to see whether continued quota reductions impact the root cause of the ongoing epidemic – the over-prescribing of controlled substances.
Over a period of two weeks in June, the House passed several bills aimed at combating the ongoing opioid epidemic. Our summary of the earlier measures can be found here. Key points of these additional legislative initiatives are summarized below. We will continue to monitor and report on their progress.
R. 3192, CHIP Mental Health Parity Act
This bill required state Children’s Health Insurance Program (CHIP programs) to cover mental health benefits including substance use disorder services for pregnant women and children. It also prohibits states from imposing financial or utilization limits on mental health treatment that are lower than the limits placed on physical health treatment.
Specifically, this bill encourages the Center for Medicare and Medicaid Innovation to test models to provide incentive payments to behavioral health providers for adopting electronic health records technology, and using that technology to improve the quality and coordination of care.
On Tuesday, the House of Representatives passed a fleet of bills aimed at combating the ongoing opioid crisis, most aimed at developing preventative measures to curb opioid addiction by funding research. The measures passed with overwhelming bipartisan support. Key points of these legislative initiatives are summarized below. Quarles & Brady will continue to monitor their progress.