DEA to Propose Significant Regulatory Changes in the Coming Year

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.

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DEA Slashes Opioid Manufacturing Quotas for 2019

In a joint statement by the U.S. Department of Justice and the Drug Enforcement Administration, the government announced continued efforts to tackle the opioid crisis by reducing the quantity of controlled substances permitted to be manufactured next year. The proposal decreases the 2019 Aggregate Production Quotas (APQ) for six of the most frequently misused opioids by an average of ten percent compared to 2018 quotas. The proposed production quotas for the six opioids will cut the 2018 quotas from 7% to 15% in 2019. The proposal seeks to advance the effort taken by President Trump’s “Safe Prescribing Plan,” which aims to “cut nationwide opioid prescription fills by one-third within three years.” The six drugs addressed by this action are oxycodone, hydrocodone, oxymorphone, hydromorphone, morphine, and fentanyl.

It appears that the percentage reduction of quota for these six drugs was not based on diversion statistics compiled by DEA and the Notice does not otherwise provide specific justification for the reduction in quota.  In the joint statement, the government indicated that the goal of the reduction is to “encourage vigilance on the part of opioid manufacturers, help DEA respond to the changing drug threat environment, and protect the American people from potential addictive drugs while ensuring that the country has enough opioids for legitimate medical, scientific, research, and industrial needs.”

This marks the third straight year that the DEA has proposed such APQ reductions for controlled substance manufacturing in the U.S., a trend that does not appear to be slowing down. In addition to the government’s stated goals, it will be interesting to see whether continued quota reductions impact the root cause of the ongoing epidemic – the over-prescribing of controlled substances.

House Opioid Measure Frenzy Continues

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.

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House Passes 12 Bills Aimed at Combating Opioid Crisis

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.

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Federal Judge Overturns DEA’s Immediate Suspension Order…for now.

A United States District Court Judge issued a temporary restraining order prohibiting the Drug Enforcement Administration (DEA) from enforcing the Immediate Suspension Order issued against Morris & Dickson.

Acknowledging, that the entire administrative record was not before the court, Judge Foote nonetheless held that “Plaintiff has demonstrated a substantial likelihood that it will be able to prove that the Acting Administrator’s finding is arbitrary and capricious” and that “Morris & Dickson faces a substantial threat of irreparable harm if the immediate suspension of DEA Certificates of Registration Nos. RM0314790 and RM0335732 is not enjoined and that the balance of equities and the public interest favor granting a temporary restraining order.”

A preliminary injunction hearing is currently scheduled for May 22.

Alleged Failure to Report Suspicious Orders Leads to Suspension

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).

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DEA Proposes Changes to Quota Regulations

On April 19, 2018, the Drug Enforcement Administration (DEA) issued a Notice of Proposed Rule Making (NPRM) proposing various changes to DEA’s process for setting Aggregate Production Quotas (APQ) and Individual Procurement Quotas (IPQ). Here are some of the more significant “changes” proposed in the NPRM:

Aggregate Production Quotas

  • DEA must consider the diversion of a particular class of drugs when setting APQ;
  • DEA must also consider information from HHS, FDA, CDC, CMA, and state information when setting APQ;
  • DEA must consider diversion as one of the factors for adjusting APQ;
  • Allows for a hearing, if requested, and necessary to resolve issues related to a state’s objection to changes in APQ.

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States Looking to Tax Opioid Distributions

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. Continue Reading

DEA Gives Wholesalers Access to Some ARCOS Data, but Not Quantities Purchased

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. Continue Reading

Enforcement Initiatives Just One of the Topics at the Summit on Controlled Substances

 

 

 

 

 

I am pleased to be part of the roundtable panel, “Update on State and Federal Enforcement Initiatives,” at the American Conference Institute’s Summit on Controlled Substances, being held January 29-31 at the Washington Plaza Hotel in Washington, D.C.

Conference faculty will discuss current challenges, benchmark strategies, and how to prepare for the future of this critical and fast-paced industry. Hear from:

  • Current and former DEA attorneys
  • Current and former FDA attorneys
  • State and U.S. attorneys
  • In-House Counsel
  • Top law firm counsel

Topics include:

  • Reassessing Your Responsibilities in Light of the Changing Scope of Suspicious Order Monitoring Requirements
  • Evolution of Abuse-Deterrent Opioid Drug Products
  • Understanding and Comparing State Prescription Drug Monitoring Programs
  • Diving Into State, County, and City Opioid-Related Investigations

Register today and use the code P10-999-DEA18 to receive a discount on registration fees.

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