DEA Chronicles

DEA Chronicles

Drug Enforcement Administration Compliance and Litigation Issues

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


DEA Finalizes Rule to Schedule Tramadol

Posted in DEA Compliance, Drug Policy, Scheduling Actions

Possibly in the hopes of catching everyone before they leave for their 4th of July holiday, the DEA published its Final Rule in the Federal Register on July 2nd placing tramadol into Schedule IV effective August 18, 2014.  (Tramadol is a centrally acting opioid analgesic first approved for use in the U.S. in 1995 under the name “Ultram”.  Since then, the FDA has approved for marketing generic, combination and extended release versions.)  The DEA follows in the path of a number of states that have already taken this step such as Arkansas, Mississippi, and New York.  By making tramadol a Schedule IV controlled substance, the DEA makes it easier for the pharmaceutical industry to develop consistent policies and procedures nationwide for how this drug is handled.

Acknowledging that changes such as these take time to implement, the DEA extended the usual effective date for this type of change from 30 to 45 days to provide what it considers to be “reasonable time for registrants to comply with handling requirements for a schedule IV” drug, such as moving tramadol products into a warehouse cage or adjusting suspicious monitoring systems to include tramadol orders.  Though in the past the DEA has allowed for additional time for compliance or staggered the implementation process, it specifically chose to forgo staggered dates here to avoid confusion and inconsistent application of the new requirement.

It is important to note that as of August 18, 2014, manufacturers are required to print the designation “C-IV” onto every bottle and it is unlawful for commercial containers of tramadol to be distributed without that designation.  The DEA believes that the 45 day window between July 2nd and August 18th will “provide a reasonable time for distributors to sell existing stock” without the designation and to stock inventory with the proper designation.  Also, August 18th will be a busy day, as on August 18th every DEA registrant possessing tramadol must take an inventory of all tramadol stock in compliance with 21 C.F.R. §  1304.11(d).  Anyone who doesn’t want to handle controlled substances, but that currently stocks tramadol, must surrender the stock according to § 1307.21 or must transfer the stock to a DEA registrant before August 18th.

NABP Releases “Red Flags”

Posted in DEA Compliance

At the 110th Annual Meeting of the National Association of Boards of Pharmacy (“NABP”) a new educational video entitled “Red Flags” was released by NABP to assist pharmacists in properly exercising their corresponding responsibility and identifying the warning signs of prescription drug abuse and diversion.  The educational video was sponsored by Mallinckrodt Pharmaceuticals, Cardinal Health, McKesson Corporation, AmerisourceBergen, Actavis, and Endo-Qualitest Pharmaceuticals, all of whom are members of the Anti-Diversion Industry Working Group (“ADIWG”).  The companies worked with NABP to develop the concept and content for “Red Flags,” a video that uses real-life scenarios that illustrate the “moment of truth” when a pharmacist must decide whether a prescription for a controlled substance was issued for a legitimate medical purpose.  We have previously discussed the red flags of diversion.  “Red Flags” is an engaging and informative video that reinforces DEA’s statements about a pharmacist’s corresponding responsibility.  Industry initiatives like this will make a real difference in reducing prescription drug diversion and abuse since pharmacists are, as DEA has frequently stated, the “last line of defense” in preventing prescription drug abuse.

We applaud the NABP, Executive Director Catizone, Mallinckrodt Pharmaceuticals, Cardinal Health, McKesson Corporation, AmerisourceBergen, Actavis, and Endo-Qualitest Pharmaceuticals for working together to create “Red Flags.”

ADIWG is a consortium of leading pharmaceutical manufacturers and distributors of controlled substances who are working collaboratively and proactively to address the complex problems of prescription drug diversion and abuse.  Quarles & Brady is pleased that we have had the opportunity to assist the ADIWG in its efforts.  

Don’t Squeeze the Balloon: An International Perspective on Preventing Prescription Drug Overdoses

Posted in Drug Policy, Enforcement Actions, Overdose, Quota

Last year the United Nations Office on Drugs and Crime (UNODC) and the World Health Organization (WHO) published a paper on reducing opioid overdose mortality.  The paper addressed opioid overdoses related to heroin use and concluded that reduction in supply is an effective measure governments can take to reduce heroin overdoses.  The UNODC and WHO also addressed overdose incidents related to the misuse of opioid prescription drugs.  However, these organizations did not state, or even suggest, that reduction in supply of prescription narcotics would reduce opioid overdoses.  Instead the UNODC and WHO found that “[m]easures to limit the contribution of prescription medicines to opioid overdose include addressing the inappropriate prescription of opioids and other sedatives and inappropriate sales by pharmacies without a prescription.”

This approach to preventing overdose incidents with prescription narcotics makes perfect sense.  Supply is already limited by the Governments of countries which are Parties to the International Drug Control Conventions.  For example, in the United States, the DEA approves the importation of narcotic raw material used in manufacturing prescription opiates.  The Agency also establishes annual aggregate production quotas and assigns individual quotas to bulk and dosage unit manufacturers.  The problem with prescription drug abuse is not a failure to control supply.  Rather, it is the inappropriate prescribing of these drugs that fuels opioid addiction, abuse, and overdose incidents.  The ONDCP strategy to reduce prescription drug abuse will be more effective if it places a heavier emphasis on taking action to curb inappropriate prescribing of these drugs.

I was once an advocate for aggressively targeting the supply chain as a means of preventing the diversion and abuse of prescription drugs.  After all, targeting the supply chain is an effective law enforcement strategy for preventing the misuse of illicit drugs.  But the results of that strategy with prescription drugs have been ineffective as evidenced by the rising abuse of those products.  The governments of the world will continue to ensure adequate supply of pharmaceutical narcotics for medical purposes; therefore, effective enforcement must focus on the prescribers who inappropriately prescribe or over-prescribe these drugs.  Targeting the legitimate supply chain shifts, but does not solve, the problem.

Would focusing law enforcement efforts on prescribers rather than the entire supply chain be more effective at preventing prescription drug abuse?  We’d like to know what you think.

Defining, but Protecting, DEA’s Suspension Powers: the Impact of HR 4069

Posted in Drug Policy, Legislation

The “Ensuring Patient Access and Effective Drug Enforcement Act“ introduced by Representatives Blackburn and Marino defines the term “imminent danger.”  The Controlled Substances Act requires DEA to find that a registrant poses an imminent danger to public health or safety before the Agency can issue an immediate suspension order, but the current law does not define “imminent danger.”  DEA’s power to issue immediate suspensions is essential to protecting our communities and families from the harms of prescription drug abuse.  That power to suspend must be available to the Agency to abate truly imminent dangers that threaten the lives and health of the American public.

Because an immediate suspension has significant Due Process implications, the use of that power is confined to addressing imminent dangers.  As I indicated in testimony before the House Energy and Commerce Subcommittee on Health, defining imminent danger will protect and preserve this important power given to DEA.  In the absence of a clear legislative standard for suspensions, courts have shown a willingness to intervene.  I believe that establishing a clear standard for DEA to follow will better protect the public and will reduce legal challenges to immediate suspension orders.  Fewer legal challenges may not be good for the business of lawyers like me, but I’ll gladly trade business for real progress in protecting our communities from prescription drug abuse.

What do you think the impact of defining ”imminent danger” will be?


Congressional Hearing on CSA Amendment

Posted in Drug Policy, Legislation

Hearing on the Ensuring Patient Access and Effective Drug Enforcement Act

Today at 3 p.m., I will be joining DEA’s Mr. Joseph Rannazzisi, HDMA CEO John Gray and others to testify before the House Energy and Commerce Subcommittee on Health regarding a proposed amendment to the Controlled Substances Act.  H.R. 4069, introduced by Representative Tom Marino of Pennsylvania and Representative Marsha Blackburn of Tennessee, defines two key terms in the CSA — “imminent danger” and “consistent with the public interest” – as well as making other changes to strengthen efforts to prevent prescription drug abuse while enhancing patient access to controlled medications.  You can watch the hearing on the Ensuring Patient Access and Effective Drug Enforcement Act at 3 p.m … and stay tuned to DEA Chronicles for discussion of this bill.

Non-Suspicious is Suspicious: DEA Moved the Goal Post Again!

Posted in DEA Compliance, Enforcement Actions, Suspicious Order Reports

Just when you thought it was safe to have a robust order monitoring program to detect and report suspicious orders, DEA has moved the goal post.  In previous posts (here and here), we’ve talked about DEA’s “extra-regulatory” guidance on both suspicious orders and “due diligence”.  In late February-early March, the DEA held a hearing in the matter of Masters Pharmaceuticals, Inc.  One of the Agency’s allegations was that the Registrant failed to report certain orders as suspicious in violation of 21 C.F.R. § 1301.74(b) , which requires registrants to report orders of unusual size, unusual frequency, or those that substantially deviate from a normal ordering pattern.  Several DEA employees testified, repeating portions of what the Agency has said about suspicious order monitoring in correspondence and conference presentations (but not by notice and comment rulemaking).  Then a Diversion Investigator pronounced a new and expanded interpretation of the regulation.  According to the Investigator, a distributor must report previously shipped orders as suspicious if the distributor subsequently decides to cease distributions to a customer as a result of conducting what the Agency calls “due diligence” (another term not found in the Agency’s regulations).  The Investigator said that prior orders placed by that customer should be reported retrospectively even if the customer had not placed any orders of unusual size, pattern, or frequency.  So how far back should a distributor look in order to comply with this new interpretation?  The Investigator could not provide an answer on cross examination.

Without a hint of legal authority, the DEA appears to believe that orders that are not suspicious can become suspicious when a distributor decides to cease distributions to a customer because the distributor has concerns about the customer.  Of course this puts a distributor in the very awkward position of reporting an order that has already been filled as “suspicious.”  DEA has said in its extra-regulatory communications that registrants should not fill suspicious orders.  Perhaps the Agency will extend an exception if the order in question was filled before it became suspicious.  But don’t hold your breath.

Registrants have become accustomed to DEA regulating by letters and Power Point presentations.  Now they can look forward to regulation by proclamation during administrative proceedings.  But the issue is much broader than order monitoring programs.  Has notice and comment rulemaking become optional?  Can regulatory agencies announce new requirements under the guise of “interpreting” a regulation?  And can an agency do so in an administrative proceeding governed by the APA — the very act that codifies the guarantee of due process in administrative proceedings?  I find this approach to regulating very suspicious even though it was previously non-suspicious and only became suspicious after…well, you’ll have to figure it out.


Sometimes Numbers Lie: Decline in Opioid Prescriptions is Hollow

Posted in Drug Policy, Quota

Prescriptions Decline But Volumes Rise

According to the Milwaukee Journal Sentinel, IMS has reported that the number of prescriptions for opioids declined 5% in 2013 compared to 2012.  Although this could signal a positive step in combating opioid abuse, data suggest otherwise.  The decline in the number of prescriptions for opioids signals one thing only — a decline in the number of prescriptions.  Unfortunately, there is no convincing evidence that the use of opioids, both licit and illicit use, is declining.  The devil is in the details.  Let’s look at oxycodone, one of the popular opioid analgesics.  Oxycodone is an effective pain reliever for millions of Americans, but is also a drug that is widely abused and was the drug at the center of widely publicized trafficking and abuse issues in Florida in 2010 and 2011.

According to information from the Drug Enforcement Administration (DEA), pharmacies in the United States filled 58.2 million prescriptions for oxycodone in 2010.  In 2013, pharmacies filled 58.8 million prescriptions for oxycodone.  Although this represents only a slight increase from 2010 (and a decrease from 2011 and 2012), there were fewer prescriptions for all opioids in 2013 than in 2010.  In other words, while prescriptions for opioids as whole have declined slightly, prescriptions for oxycodone, perhaps the most widely-abused opioid in the last 15 years, is bucking the trend.

Even more telling is the aggregate production quota established by DEA.  The annual aggregate production quota for oxycodone in 2010 was 105,500 kilograms.  In 2013, the production quota for oxycodone was 153,750 kilogram.  Even if DEA held 25% of the 2013 quota in reserve — a new concept that DEA introduced in late 2012 — the amount allowed for production was 123,000 kilograms, a 17% increase over 2010.  You might also notice the significant increases in the aggregate production quota for hydrocodone, hydromorphone, methadone, morphine, and oxymorphone.

Here are two observations from these data: 1) a decline in opioid prescriptions does not mean that the opioids that are being abused are being prescribed less or abused less; and 2) the number of prescriptions for a drug doesn’t necessarily represent the quantity of the drug being used — the number of dosage units per prescription and the strength of the drug prescribed are essential data points to make a meaningful assessment.

The United States is producing (and likely using) a greater volume of narcotics today than it did in 2010.  So what do we make of the effort of regulators, law enforcement, and members of industry to reduce prescription drug abuse?  In the world of illicit drug trafficking, attacking supply while reducing demand is an effective two-pronged approach.  When it comes to prescription drug abuse, the issue is more complicated for law enforcement and members of industry.  Reducing supply impacts patients with legitimate medical needs.  And if reduction in supply could solve prescription drug abuse, DEA would have reduced the quotas.  Prescription drug abuse is a complex problem that calls for a thoughtful demand reduction strategy that explores effective alternatives to managing pain, consumer and prescriber education about the use of prescription opioids, and collaboration between public health officials, law enforcement officials, and the prescribers, pharmacists, wholesalers and manufacturers who make and deliver these drugs that are helpful to so many but are also harmful when misused.

A decade after reducing prescription drug abuse became a national priority, the slight reduction in the number of prescriptions for opiates — after years of increasing supply and demand — is hollow.  Sometimes numbers lie.  It’s not time to celebrate.  It’s time to collaborate and forge a new approach to addressing prescription drug abuse.

Suspicious Order Monitoring – What’s Next?

Posted in Conferences, DEA Compliance, Suspicious Order Reports

Come join us at the 2014 HDMA Distribution Management Conference and Technology Expo.  Linden and I are excited to share our perspective on the latest developments in suspicious order monitoring and reporting.  As an added bonus, we will also be available for a post-presentation discussion to continue the conversation on this very important topic.  Yet another bonus is that the conference will be held in the Palm Desert, California – a polar vortex-free zone!

Hope to see you there.



DEA Takes the First Step Towards Rescheduling Hydrocodone Combination Products

Posted in Scheduling Actions

On Thursday, February 27, 2014, the DEA issued a long-awaited Notice of Proposed Rulemaking (NPRM) seeking to reschedule hydrocodone combination products as Schedule II controlled substances.  In a previous post we questioned whether such a step would actually have an impact on the abuse and diversion of these drugs.  DEA relied on the scientific analysis of the Department of Health and Human Services and the DEA’s own eight-factor analysis to conclude that substantial evidence of the high potential of abuse for hydrocodone combination products exists to support the placement of these types of drugs in Schedule II.

The NPRM allows public comments on the proposed rule.  Moreover, interested parties may seek a hearing before the DEA to contest the proposed rulemaking action.  Comments should be received by the DEA by April 27, 2014.  Requests for hearing are due no later than March 31, 2014.