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On January 30, 2020, the Drug Enforcement Administration (DEA) released the 2019 National Drug Threat Assessment (NDTA).  The 152-page publication “outlines the threats posed to the United States by domestic and international drug trafficking and the abuse of illicit drugs.”  Of specific relevance to readers of DEA Chronicles, the report also discusses the abuse and misuse of controlled prescription drugs (CPDs).  While I encourage you to read the entire report, here are a few key takeaways regarding CPDs:

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.

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. 

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.

R. 3331
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.

As the national discussion on opioid abuse continues, state governments are looking to their tax laws as a way of “addressing” the issue. The Kentucky House recently approved a 25 cent per pill tax for every dose sent into the state. The measure now moves to the Kentucky Senate. The state expects to raise $70 million a year from the tax. Kentucky does not, however, intend to use the funds for opioid addiction treatment, but plans to use the tax revenue for unrelated budget needs.

The DEA issued a short press release yesterday that, at first glance, appeared to deliver on something that wholesale drug distributors have been seeking for years—access to ARCOS data so that wholesalers can see the total number of controlled substances a customer is ordering.* Despite the sensational headline, the new DEA tool is underwhelming and misses the mark because it will only tell a wholesaler how many other wholesalers a prospective customer has purchased a controlled substance from in the past six months. Unfortunately, this tool will provide little to no usefulness to distributors in identifying suspicious orders.