Controlled Substances Act

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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.

Note: The following is my best guess for what to expect in the coming year regarding controlled substance compliance obligations.  I have relied on publicly available information, my experience and expertise with all things involving pharmaceutical controlled substance, and a Magic 8 Ball in creating the list below.

Suspicious Orders

This is the year (I think) that DEA will publish a Notice of Proposed Rule Making (NPRM) updating 1301.74(b).  While industry is anxiously awaiting the new regulations, I fear that many will be disappointed.  My best guess is that the new regulations will be more about changing the process for reporting suspicious orders and less about guidance for industry on the metrics to use for detecting suspicious orders.  This is in part because Congress recently codified the existing definition of suspicious orders that has been in DEA’s regulations for decades, which takes away a great deal of DEA’s interpretative authority and discretion.  There is also an argument to be made that DEA would prefer suspicious order guidance and definitions to be vague, providing the agency significant enforcement discretion.

In a decision issued on October 30, Judge Joseph Goodwin of the Southern District of West Virginia dissolved an Order of Immediate Suspension of Registration (“ISO”) issued by DEA against Oak Hill Hometown Pharmacy, a West Virginia pharmacy. Without getting too far into the factual weeds of this case, I do think there are two or three critical takeaways related to both the adjudication of this matter and to DEA’s view of Subutex vs. Suboxone.

Is “Suspicious Order” about to be defined?

The recently-released DOJ OIG Review of the Drug Enforcement Administration’s Regulatory and Enforcement Efforts to Control the Diversion of Opioids has met with extensive media coverage focused on the sexier aspects of the story. What did DEA do or not do to stem the opioids crisis? What internal battles may have led DEA to drop the ball in some aspects of the response? These are important questions, but they have been well-covered.

Instead, we are going to focus on a handful of the nine recommendations (listed below) made by the IG and DEA’s and ODAG’s responses.

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.”

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.”

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.

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…