suspicious orders

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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.

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.

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.

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…

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.

On May 2, 2018, the DEA issued an Order to Show Cause and Immediate Suspension of Registration (the “Order”) against Morris & Dickson Co., LLC (“M&D”), a drug distributor based in Louisiana with pharmacy customers in 7 states. The DEA has two main allegations against M&D:

  1. M&D failed to maintain effective controls against division of controlled substances into other than legitimate channels, in violation of 21 USC 823(b)(1) and 21 CFR 1301.71.
  2. M&D failed to identify and report suspicious orders to DEA, in violation of 21 CFR 1301.74(b).

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.

In a recently issued Request for Proposal (RFP) for Information Technology (IT) and other services in support of the Diversion Control Division, DEA indicated that it will be creating a new section in the Code of Federal Regulations. 21 C.F.R. 1301.78, will contain the suspicious order reporting requirement that is currently found in 21 C.F.R. 1301.74(b). DEA intends to define the term “suspicious order” with a list of specific factors to consider when scrutinizing an order. DEA is expected to require that the “presence of any one or more of these factors renders the order a suspicious order,” which must be reported to DEA via a secure network application for Suspicious Order Reporting System (SORS).

The West Virginia Board of Pharmacy (“Board”) rolled out a new mandatory suspicious order reporting form for wholesalers at its board meeting last month.  The one-page form is designed to be filled out for each individual suspicious order being reported. This will require wholesalers that currently create and submit automated suspicious order reports to adapt their reporting for West Virginia.