DEA Chronicles

DEA Chronicles

Drug Enforcement Administration Compliance and Litigation Issues

Rx Denied: A Prescription for Misery

Posted in Drug Policy, Enforcement Actions


Center-20150403-00124WESH TV of Orlando aired a special investigative report on April 2, 2015 detailing the unintended consequence of the crackdown on “pill mills” in Florida.  State of Pain reveals that some patients with severe medical conditions are having difficulty finding pharmacies willing to fill their prescriptions for controlled substances.  The causes for this are many and include pharmacists’ fear of regulatory action, skepticism because of the deceitful schemes of drug abusers and dealers, and regulatory pressure on the entire supply chain to be very cautious when distributing and dispensing prescription controlled substances.

There are two bad outcomes that physicians, pharmacies and regulators must prevent:  1) drugs getting into the wrong hands, and 2) drugs not getting into the right hands.  We don’t have to chose between these outcomes.  We must prevent both bad outcomes.  The reality is that if DEA or other regulators are taking enforcement action, a bad outcome has already occurred.  So here’s a twist on an old adage that might just be a prescription for avoiding bad outcomes.  An ounce of prevention is worth a pound of enforcement.  Clear guidelines from regulators and open communication between regulators and industry are my prescription for prevention.  Even good legislative efforts like H.R. 471 are no substitute for common sense guidelines and communication.  They are the prescription to ensure patient access to needed medications while preventing prescription drugs from falling into the wrong hands.

State of Pain provides perspectives from Governor Rick Scott, Florida Attorney General Pam Bondi, NABP President Carmen Catizone, Senators Nelson and Rubio, patients, and others.

GAO Report Criticizes DEA Quota Process

Posted in Drug Policy, Quota

PillsOn March 4, 2015, the Government Accountability Office (GAO) released a report titled, Drug Shortages: Better Management of the Quota Process for Controlled Substances Needed; Coordination between DEA and FDA Should Be Improved.  GAO’s report examined, (1) the trends in such shortages, (2) the effect on patients and providers, (3) DEA’s administration of the quota process, and (4) coordination between DEA and FDA to prevent and mitigate shortages.

GAO’s report concluded, among other things the following:

  • DEA has not effectively administered the quota process that limits the amount of controlled substances available for use in the United States;
  • DEA has failed to meet statutory and regulatory deadlines for setting quota for more than the last decade (something we have discussed on this blog);
  • DEA’s weak internal controls jeopardize the agency’s ability to effectively manage the quota process;
  • DEA lacks critical management information because it does not have performance measures related to setting quotas, nor does it monitor data to assess its performance;
  • DEA does not have reasonable assurance that the quotas it sets are in accordance with its requirements and cannot ensure continuity of its operations, as it does not have protocols, policies, training materials, or other documentation to manage the quota process; and
  • DEA and FDA have not established a sufficiently collaborative relationship to deal with drug shortages.

In response to this report, DEA asserts that there is no causal relationship between its quota process and drug shortages.  The agency also took exception to the methodology and data analysis in GAO’s review.  With that said, DEA acknowledged its repeated failure to issue quota in a timely manner, attributing its lack of compliance to its own regulations to inadequate staffing.

Upon issuance of the GAO report, Senators Grassley and Feinstein scheduled a hearing before the Caucus on International Narcotics Control, to discuss the findings of GAO’s report.  The hearing is planned for April 14, 2015.



Second Bill Introduced in the Senate to Amend the Controlled Substances Act

Posted in Drug Policy, Legislation

cap1As we previously reported, on February 12, 2015, Senators Hatch and Whitehouse introduced the Ensuring Patient Access and Effective Drug Enforcement Act of 2015.  Also on that date, the Senators introduced legislation that would also amend the Controlled Substances Act, as well as the Food, Drug, and Cosmetic Act.  This legislation addresses, among other things, the scheduling of new molecule entities (“NME”) that have been approved by the Food and Drug Administration (“FDA”).  If passed, the legislation will require the Drug Enforcement Administration (“DEA”) to issue an Interim Final Rule placing the NME in the appropriate drug schedule within 90 days of receipt of the scientific and medical evaluation and recommendations from the Secretary of Health and Human Services or within 90 days of receipt of notification from the FDA of approval and scheduling recommendation of the NME.

This is companion legislation to the Improving Regulatory Transparency for New Medical Therapies Act, which was recently introduced in the House and approved by the Subcommittee on Health, Energy and Commerce Committee.

The average time for DEA to schedule NMEs has significantly increased over the past several years – from 49 days in the late 1990s to 238 days in recent years.  In 2013, Eisai  Inc. sued DEA to timely schedule Fycompa, a drug therapy approved to treat epilepsy.  Ultimately, Eisai had to wait more that a year for DEA’s scheduling action which negatively impacted patient access to an FDA-approved drug and significantly reduced the company’s marketing exclusivity period.

Legislation Introduced in Senate Seeking to Amend CSA

Posted in DEA Compliance, Drug Policy, Enforcement Actions, Legislation

On February 12, 2015, Senators Hatch and Whitehouse introduced the Ensuring Patient Access and Effective Drug Enforcement Act of 2015.  This is the companion bill to H.R. 471, sponsored by Representatives Marino, Blackburn, Welch, and Chu that was recently approved by the Subcommittee on Health, Energy and Commerce Committee.

At a recent Congressional hearing, Linden Barber discussed the benefits of the House’s bill which will help prevent prescription drug abuse, establish clear and consistent enforcement standards, and ensure patients have access to medications by promoting collaboration among government agencies, patients, and industry stakeholders.  A prior version of this bill unanimously passed in the House last year, but never made it to a vote in the Senate.

The Senate bill, like its House counterpart, has received the support of HDMA, a national association representing healthcare distributors whose membership includes 34 national, regional, and specialty primary distribution companies.

DEA Decisions: In the Matter of The Medicine Shoppe

Posted in DEA Final Orders, Enforcement Actions

In the Matter of the Medicine Shoppe (October 2, 2014)

DEA recently revoked the registration of the Medicine Shoppe, a San Antonio, Texas,  pharmacy, based on a finding that the pharmacy violated the Controlled Substances Act in all of the following ways:

  • dispensed controlled substances without a prescription;
  • dispensed controlled substances when the prescription was “signed” using a signature stamp;
  • allowed some customers to retain original controlled substances prescriptions;
  • dispensed controlled substances when the prescription contained irregular dosing instructions;
  • dispensed controlled substances when the prescriptions revealed pattern prescribing by physicians;
  • dispensed controlled substances when the prescription lacked a patient’s address and the physician’s DEA registration number;
  • placed a prescription label on the back of the prescription with a physician’s name that was not consistent with the name on the front of the prescription;
  • accepted prescriptions where the refill line was blank; and
  • allowed patients with prescriptions containing both controlled and non-controlled substances to fill only the controlled substances’ portion of the prescription.

Deputy Administrator Thomas M. Harrigan affirmed the conclusion of the administrative law judge (“ALJ”) that the pharmacy’s continued registration was inconsistent with the public interest.  Specifically, the Deputy Administrator found that the pharmacy, through its pharmacists, violated its corresponding responsibility by dispensing prescriptions that lacked a legitimate medical purpose and that did not comply with DEA’s regulations.

In addition to dispensing prescriptions without resolving “red flags” of diversion, the pharmacy also employed as a delivery person a man who had been convicted previously of distributing crack cocaine, in violation of DEA regulations.

The pharmacy also failed to maintain accurate records.  When DEA attempted to conduct an audit, it found what Deputy Administrator Harrigan called “massive shortages” of multiple controlled substances, including: promethazine with codeine; hydrocodone 10 mg, and alprazolam 1 mg and 2 mg. The audit results, alone, could have justified revoking The Medicine Shoppe’s registration, according to Deputy Administrator Harrigan.

It is interesting to note that the Deputy Administrator and the ALJ both concluded that the owner and pharmacist-in-charge (“PIC”), Nate Lekwa, had not truly accepted responsibility for the violations proven by the Government, which is a factor that can weigh in favor of continued registration.

Though the PIC made general statements about accepting responsibility, under questioning by the Government about specific instances of violations, he refused to admit wrong-doing.  For instance, when asked about numerous prescriptions that the Government’s expert witness testified should not have been filled, the PIC maintained that none of the dispensings were improper.  As such, Deputy Administrator Harrigan called the PIC’s acceptance of responsibility “double talk.”

The revocation is effective November 4, 2014.

DEA Announces New Ways for the Public to Dispose of Unused Controlled Substances

Posted in Drug Policy

Beginning next month, consumers will have an easier time getting rid of unused painkillers and other addictive drugs, which DEA hopes will discourage people from flushing the drugs down the toilet, throwing them in the garage, or leaving them, forgotten, in their medicine cabinets.  The new disposal methods include allowing people to drop off unwanted pills at pharmacies, some hospitals and long-term care facilities, and police stations.

DEA’s Final Rule, which implements the Secure and Responsible Drug Disposal Act of 2010 (“the Disposal Act”) by expanding the options to collect controlled substances back from ultimate users, is expected to be released tomorrow and will take effect on October 9.  The disposal methods include take-back events, mail-back programs, and drop-off locations.

The new regulations:

  • allow authorized retail pharmacies; hospitals and clinics with on-site pharmacies; manufacturers; distributors; reverse distributors; and narcotic treatment programs (NTPs), to place collection receptacles inside their establishments and to permit people to mail back unwanted controlled substance mediations;
  • expand the authority of authorized pharmacies and hospitals/clinics to place collection receptacles inside long-term care facilities; and
  • allow law enforcement agencies to place collection receptacles inside their stations, conduct drug take-back events, and administer mail-back programs. (Note that law enforcement agencies are not required to use collection receptacles that meet all of the specifications in the rule.)

DEA registrants that want to become controlled substances “collectors” will need authorization from the Agency to keep secure containers at their locations for controlled substances drop off or to conduct mail-back programs.  A registrant may seek to modify its DEA registration to become a collector by making a written request by mail or online.  Retail pharmacies and hospitals/clinics that become collectors will be allowed to put collection receptacles inside long-term care facilities for those facilities’ residents.

For security reasons, collection receptacles must be securely fastened to a permanent structure.  In addition, as a general rule, the collection receptacles must be placed in the immediate proximity of a designated area where controlled substances are stored and where an employee is present.  Hospitals/clinics, which would have difficulty meeting that requirement, must place receptacles in locations that are regularly monitored by employees and are not in the proximity of any area where emergency or urgent care is provided.

Collection receptacles must be accessible to the public because only the ultimate users of the drugs are authorized to place the controlled substances in a receptacle.  Pharmacy and hospital staff cannot take the drugs and put them into a container.

Registrants that choose to conduct mail-back programs must be able to destroy returned packages on site.  And registrants must provide customers with mail-back packages.  They can charge for the packaging, or provide the packaging for free.

The new rule permits controlled substances collected through take-back events, mail-back programs, and collection receptacles to be comingled with non-controlled substances.

Other highlights of the Rule:

Methods of Destruction:

DEA is not requiring a specific method of destruction for controlled substances that are collected. Registrants are free to develop their own methods of destruction so long as, in the end, the drug is “non-retrievable”, which means the condition or state to which a controlled substance must be rendered following a process that permanently alters the controlled substance’s physical or chemical condition or state through irreversible means and thereby renders the controlled substance unavailable and unusable for all practical purposes.  See 21 C.F.R. § 1300.05(b).  Once a controlled substance is “non-retrievable,” it is not longer subject to DEA requirements.

Long-Term Care Facilities:

In addition to allowing retail pharmacies and hospitals/clinics with on-site pharmacies to place collection receptacles in LTCFs for residents, DEA is also implementing special security requirements for these collection receptacles to encourage their use.

First, DEA is permitting sealed inner liners that have been removed from collection receptacles to be stored at LTCFs for up to three business days in a securely-locked, substantially constructed cabinet or in a securely-locked room with controlled access until the liners can be transferred for destruction.  However, DEA is encouraging authorized collectors to schedule inner liner removals on the same day that medications are delivered, if possible, to make storage of sealed inner liners unnecessary.

It is also important to note that collectors cannot transfer sealed inner liners from LTCFs to their registered locations (i.e., the pharmacy or hospital/clinic).  DEA is concerned that pharmacy or hospital/clinic employees transporting large quantities of controlled substances pose a security risk.  Therefore, collectors must deliver sealed inner liners to a reverse distributor or a distributor by common or contract carrier or by reverse distributor or distributor pick-up at the LTCF.

Second, collectors will be allowed to have one of its employees and a supervisory level employee of the LTCF (e.g., a charge nurse, supervisor, or similar employee) install, remove, store, or transfer inner liners, or the collector can have two of its own employees do the work.

DEA hopes that these modifications will result in expanded safe and secure disposal options for LTCF residents.

DEA Registrant Disposal:

DEA has modified DEA Form 41 and is requiring that the form to be used to record the destruction of controlled substances that remain in the closed system of distribution and to account for the destruction of controlled substances collected from consumers and other non-registrants pursuant to the Disposal Act.

Reverse Distributors:

DEA added a definition of “reverse distribute,” revised the definition of “reverse distributor”, and clarified that the security, inventory, and recordkeeping requirements for controlled substance destruction apply to some entities that reverse distribute even if they are not required to register as reverse distributors.

In addition, DEA has extended the time that a registrant that reverse distributes has to destroy controlled substances to 30 days, from the proposed 14 days.

Distributors may acquire controlled substances from collectors for the purpose of destruction, as a coincident activity to distribution.

The rules are intended to expand the options available to safely and securely dispose of potentially dangerous prescription medications on a routine basis.  Beginning in 2010, DEA has sponsored eight National Prescription Drug Take-Back events around the country that resulted in the collection of more than 4.1 millions pounds (over 2,100 tons) of medication at over 6,000 locations.

DEA to Publish Final Rule Rescheduling Hydrocodone Combination Products

Posted in Scheduling Actions

In 45 days, hydrocodone combination products (“HCPs”) will be Schedule II controlled substances.  This means that by early October, manufacturers, wholesalers, pharmacies, prescribers, and everyone in the drugs’ supply chains will have to be in compliance with the more restrictive regulatory requirements applicable to Schedule II drugs.

In a previous post we discussed whether the rescheduling of HCPs will have a meaningful impact on combating prescription drug abuse.

HCPs are drugs that contain hydrocodone, which by itself is a Schedule II, and another substance, such as acetaminophen or aspirin.  They are used to treat moderate to severe pain and to relieve cough.  Brand names include Vicodin, Lorcet, Norco, and Tussionex.  Last year, more than 137 million HCP prescriptions were dispensed.

Currently, HCPs were Schedule III controlled substances under federal law and in every state except New York, which moved them to Schedule II in February 2013.  Schedule II is reserved for drugs with the highest potential for harm and abuse, including psychological and physical dependence.

DEA is expected to publish its Final Rule in the Federal Register on this topic tomorrow, August 22, 2014, but a preview was made available today.

Some of the impacts of moving the drugs to Schedule II include:

  • Prescribing
    • Prescribers will not be allowed to authorize refills for HCPs, though they will be allowed to issue multiple prescriptions for up to a 90-day supply.
    • Note: DEA will permit pharmacies to dispense HCP refills after the effective date of the rescheduling if the prescription was issued before the effective date and the dispensing occurs before April 8, 2015.
    • Prescribers will not be able to fax or phone in prescriptions for HCPs, though verbal prescriptions will be allowed in emergency situations.
    • Mid-level practitioners in some states will lose the ability to prescribe HCPs or have their prescriptive authority limited, pursuant to state law.
  • Dispensing
    • In some states, pharmacists will have to count the prescriptions themselves because pharmacy technicians are not allowed to do so.
  • Ordering
    • Registrants will have to use official DEA Forms 222 to transfer HCPs, rather than simple invoices or packing slips.
  • Security
    • Manufacturers and wholesale distributors will have to store HCPs in vaults, rather than cages.
  • Labeling and Packaging
    • Manufacturers will be required to label every commercial container of HCPs, including all bottles, with a “C-II” designation.
    • DEA noted that the packaging and labeling requirements for manufacturers and distributors do not apply to dispensers. Thus, dispensers with HCPs in commercial containers labeled as Schedule III can continue to dispense them after the rescheduling takes effect.

Despite all of these changes, DEA rejected calls to delay the implementation of the new rules for two years, one year, or even six months, noting that scheduling actions are normally effective 30 days after publication of the Final Rule.  DEA acknowledged that HCPs are the most prescribed drug in the United States and that the supply chain “will need to plan and coordinate efforts, and may even need to temporarily modify existing ordering and inventory management practices.” But it concluded that it could not delay implementing the new rule beyond 45 days due to “the risk of diversion and risk to public health and safety of U.S. residents.”

DEA Decisions: In the Matter of Moore Clinical Trials, L.L.C.

Posted in DEA Final Orders

In the Matter of Moore Clinical Trials, L.L.C (July 11, 2014)

DEA last month denied the DEA research registration application of an Arkansas clinical research company, finding that the person who would be primarily responsible for ordering and storing controlled substances had a “shocking” lack of knowledge of the fundamental requirements imposed by the Controlled Substances Act and DEA regulations.

The case began in March 2011 when Greta B. Moore submitted a registration application on behalf of Moore Clinical Trials, the clinical research company she founded.  At the time, Ms. Moore had won a contract to participate in a long-term safety study that focused on the use of a Schedule II controlled substance.

Moore Clinical Trials’ application came under scrutiny from DEA diversion investigators because, among other things, Ms. Moore had no prior experience with handling controlled substances.  She had previously worked as a respiratory therapist and as a clinical research coordinator on clinical trials that did not involve controlled substances.  DEA eventually asked Ms. Moore to withdraw her application and, when she declined, an Order to Show Cause to deny the application as inconsistent with the public interest was filed on August 8, 2011.

Despite the Order to Show Cause, Ms. Moore forged ahead with Moore Clinical Trials’ work on the long-term safety study.  She aired TV commercials and placed qualified participants into the study.  She also brought on a DEA-registered doctor, Brian T. Nichol, who had previously been suspended by the Arkansas Medical Board for pre-signing controlled substances prescriptions and had been convicted of felony health care fraud in federal district court.

She would later testify, at the administrative hearing in September 2012, that she believed that Dr. Nichol could order the controlled substances, receive them at his office, and then dispense them to research participants at Moore Clinical Trials, which was an unregistered location.  She stated that she never asked the DEA diversion investigators with whom she was communicating about her application whether the doctor could lawfully transport the drugs from his registered location to her company’s office.

She also testified about inadequate records that she had created just weeks before the administrative hearing: “I’m sorry . . . but I don’t know anything about the true nature of creating these records.  My intent in creating these records was simply to have [the DEA Group Supervisor] affirm to me that I was on the right track. . . .So my main concern . . . was to attempt to be compliant with the DEA, so I’m simply creating forms, not for the DEA.  I didn’t realize that the DEA was going to get these forms.  The reason that the forms are not correct is because it was eleven o’clock at night when I did the forms.”

She went on to testify that she did know the record-keeping requirements for dispensing controlled substances, “but, as a compliant person, I’m more than happy to learn what is required as a DEA registrant, because I am prepared to do whatever needs to be done, as I do my clinical research, because there are requirements that are required there as well. So after I learn what is required . . . I’m fully prepared to be compliant.”

DEA Administrator Michele M. Leonhart called it “shocking” that even at the time of the hearing, Ms. Moore still lacked knowledge of several of DEA’s fundamental requirements.

Despite the testimony and other evidence, the ALJ recommended that Moore Clinical Trials’ application be granted on condition that Ms. Moore take a course in handling controlled substances.  While the ALJ concluded that Ms. Moore was responsible for signing for one controlled substances shipment when she was not registered to do so, the ALJ found that Ms. Moore was not responsible for the many controlled substances violations committed by Dr. Nichol.  The ALJ said he was an independent contractor to whom Moore Clinical Trials only offered “a facility in which to conduct research.”

Administrator Leonhart rejected the ALJ’s opinion and reasoning, calling it “counterfactual” and reflecting “a stunning misunderstanding of the CSA.”  The Administrator held that Dr. Nichol’s controlled substances violations should be imputed to Ms. Moore and her company because they aided and abetted his violations and that the violations “were clearly intentional”.  The Administrator further held that Ms. Moore and her company failed to maintain records as required by the CSA; that Ms. Moore failed to accept responsibility for the dispensing and record-keeping violations; and that Ms. Moore lacked candor in her testimony regarding the dispensing violations.  For all of these reasons, Administrator Leonhart, in her July 2, 2014 order, held that Moore Clinical Trial’s registration would be inconsistent with the public interest and denied the application.

DEA Decisions: In the Matter of Roy S. Schwartz, D.D.S

Posted in DEA Final Orders

In the Matter of Roy S. Schwartz, D.D.S (June 16, 2014)

DEA suspended for one year the DEA registration of a Tacoma, Washington dentist with more than 50 years experience after he admitted “sharing” his DEA number with another dentist who performed conscious sedation, and who had previously surrendered his DEA registration for cause.  DEA also ordered the dentist to complete a course in controlled substance record-keeping.

The Show Cause Order alleged that the dentist, Roy S. Schwartz, obtained controlled substances for another dentist, Raymond Wilkinson, with whom he shared office space.  Wilkinson, in turn, used the drugs to perform conscious sedation in Schwartz’s office, at other dentists’ offices, and at the University of Washington’s Periodontics Clinic.  Conscious sedation is the use of a combination of medicines that help a patient relax and block pain during a medical or dental procedure.  The Washington State Department of Health launched an investigation after receiving complaints that Wilkinson had used expired fentanyl and ketamine on patients.

Schwartz admitted that his secretary ordered the other dentist whatever controlled substances he needed and that Schwartz signed off on the orders.  He stated that the drugs were given directly to the other dentist and that the other dentist was responsible for the record-keeping of the drugs.  Wilkinson kept the drugs in a locked case in an unlocked cabinet in his office.

DEA Deputy Administrator Thomas M. Harrigan, in his June 2014 order, concluded that Schwartz’s continued registration was inconsistent with the public interest.  Harrigan found that Schwartz unlawfully distributed controlled substances to the other dentist, in violation of the Controlled Substances Act and DEA regulations, by using his DEA number to order the drugs and allowing them to be delivered, stored, and handled by the other dentist.  While this technically was diversion because the other dentist was unregistered and outside the close system of distribution, according to Deputy Administrator Harrigan, there was no evidence that the drugs were administered to patients other than in the course of legitimate dental treatment.

Schwartz also was found to have violated numerous DEA record-keeping requirements, including those in 21 U.S.C. §§ 827(a)(1); 827(a)(3); 842(a)(5); and 21 C.F.R. § 1304.11(b); 1304.21(a); 1304.22(b).

The Government had requested that Schwartz’s registration be revoked.  However, despite the fact that Schwartz’s statements showed that he had not accepted responsibility for his conduct and that DEA had a strong interest in deterring similar conduct by other registrants, Deputy Administrator Harrigan only suspended Schwartz’s registration for one year.  He cited Schwartz’s lack of previous controlled substances misconduct in more than 50 years of practice and Wilkinson’s use of the drugs to provide “legitimate dental treatment” as mitigating factors.

FedEx Pleads Not Guilty

Posted in DEA Compliance, Enforcement Actions

As expected, FedEx appeared in federal district court and entered a plea of not guilty to the charges brought against the company by the Drug Enforcement Administration (“DEA”) and the United States Attorney’s Office for the Northern District of California.  As we have recently discussed, this is an unprecedented action by the government seeking to hold a shipper responsible under the Controlled Substances Act (“CSA”) for the contents of packages delivered on behalf of its pharmacy customers.

While it is generally DEA registrants that must follow a litany of recordkeeping, reporting, security, and other obligations found in the CSA and DEA’s regulations, the government is alleging that FedEx knew or should have known that it was facilitating the unlawful diversion of controlled substances by shipping packages on behalf of its customers.  This case will ultimately turn on whether the Government can prove that lawful pharmaceutical products were being illegally prescribed and dispensed and, if so, whether FedEx, through its employees, knew that its delivery of packages from certain pharmacies was facilitating what the government has labeled as illegal Internet pharmacy diversion schemes.  The outcome will also hinge on FedEx’s resolve to challenge the government’s extraordinary action against the third-party logistics provider.  All indications thus far are that FedEx will not acquiesce and will continue to maintain its innocence and fight this through the criminal justice system.

It also appears that the government’s aggressive posture will continue as it seeks to present a superseding indictment to a grand jury later next month.



Image courtesy of Beck Gusler via Creative Commons