United States: Revoking Controlled Substances Registrations: The DEA's Weapon To Fight Abusive Prescribing And Dispensing

In response to the opioid crisis, the Drug Enforcement Administration (DEA) is cracking down on pharmacies, pharmacists, and prescribers by leveraging an old enforcement weapon: revocation of controlled substance registrations. The DEA actively revived this enforcement mechanism in February and March of 2018 when it arrested 29 people and revoked 147 controlled substance registrations throughout the country.1 Revocations carry the harsh consequence of preventing pharmacies, pharmacists, and prescribers from dispensing or prescribing federally controlled substances, which effectively renders the affected provider out-of-business. This article will discuss the DEA's authority to revoke registrations, the revocation process and appeal options, and implications for pharmacies, pharmacists, and prescribers.

DEA Registration, Suspension, and Revocation Authority:

Once licensed by their states, manufacturers, distributors, and dispensers of controlled substances must register with the DEA. All three types of registrants must renew their DEA registrations periodically and keep the DEA apprised of changes to information on file with DEA. Under 21 U.S.C. § 824, the United States Attorney General or the DEA may revoke or suspend a controlled substance registration for a variety of reasons:

  • Materially falsifying filings with the DEA;
  • Certain felony convictions relating to controlled substances;
  • Suspension, revocation, or denial of state licensure related to the registrant's authority to manufacture, distribute, or dispense controlled substances;
  • Actions that would render the registration inconsistent with public interest; and
  • Exclusion from participation in federal health care programs.2

When suspending a license under subsection (a), the DEA must serve the registrant an order that demonstrates cause for the suspension or revocation (Order to Show Cause). Further, the Order to Show Cause must include a time for the registrant to appear before the DEA not less than 30 days after the order was issued and provide the registrant the opportunity to submit a corrective action plan for consideration on or before the date of appearance.4 This hearing process is distinct from any criminal prosecutions or other proceedings related to the underlying conduct of the registrant.

For example, on February 23, 2015, the DEA issued an Order to Show Cause to Pharmacy Doctors Enterprises d/b/a Zion Clinic Pharmacy, a retail pharmacy located in Hallandale Beach, Florida.5 The DEA proposed to revoke the pharmacy's controlled substance registration on the grounds that its continued regis­tration is inconsistent with the public interest.6 Specifically, the Show Order Cause listed "red flags" that "prior Agency deci­sions found... were so suspicious as to support a finding that the pharmacists who filled them violated the Agency's corresponding responsibility rule due to actual knowledge of, or willful blindness to, the prescriptions' illegitimacy."7 These "red flags" include:

  • Patients traveling unusually far distances to fill their prescriptions;
  • Nearly identical prescriptions written by the same doctor for two people with the same last name and same address;
  • Filling prescriptions for drug cocktails;
  • Patients paying for drugs in cash;
  • Filling prescriptions for the same drug in different quantities for the same patients; and
  • Early refills.

The pharmacy requested a hearing. On October 16, 2015, the Chief Administrative Law Judge John. J. Mulronneey, II issued his Recommended Decision that five of the seven allegations be sustained. Both parties subsequently filed Exceptions to the Recommended Decision.8 On February 12, 2018, acting Admin­istrator Robert W. Patterson revoked the pharmacy's registration and ordered that any subsequent applications for registration be denied effective April 12, 2018.9

Red Flags of Diversion:

As noted in the case discussed above, the DEA has informally identified a number of "Red Flags" that due to the "circumstances surrounding the presentation of a controlled substance prescrip­tion that does or should raise a reasonable suspicion as to the validity of the prescription."10 Often, claims that a pharmacy is ignoring such are used as justifications in revocation or suspen­sion Show Cause Orders issued by the DEA as discussed above.

The DEA issued an Order to Show Cause to Trinity Pharmacy, Inc. on July 10, 2015 which listed seven reasons supporting the revocation of the pharmacy's license, including that its "continued registration is inconsistent with the public interest."11 From 2012 through 2014, the Order alleged that the pharmacy "filled [prescriptions for] and dispensed controlled substances on numerous occasions outside the usual course of pharmacy prac­tice and in contravention of their corresponding responsibility," and that such pharmacists did so even when such prescriptions "contained one or more 'red flags' [f]or drug abuse or diversion without resolving the red flag(s) and, in certain circumstances, w[h]ere the red flags were unresolvable."12 Specifically, the phar-macy's operations allegedly ignored the following six red flags:

  1. Early refills. Nine customers sought to refill or submit new prescriptions before they should have completed their supply from their last refill;
  2. Unusual distance traveled by patients;
  3. Cocktail prescriptions. Eight customers each sought to fill a combination of opioid, a benzodiazepine, and a muscle relaxer for the same patient;
  4. Duplicative Drug Therapies;
  5. Two prescriptions for the same medication presented on the same day; and
  6. Pattern of prescribing. Multiple patients presented prescriptions for the same drugs issued by the same prescriber on the same day.

The Order further alleged that the pharmacy acted "outside the usual course of professional practice" by:

  • Violating federal law by dispensing a Schedule II drug when the patient had 12 days left on a prescription that was issued by a different prescriber;
  • Dispensing Schedule II drugs to patients in violation of the prescriber instructions to not fill the medication until a specified date;
  • Dispensing a drug five times more potent than what was specified on the prescription;
  • Using non-pharmacists to fill prescriptions for controlled substances; and
  • Failing to maintain accurate records of who filled controlled substance prescriptions.

Ultimately, the judge found that the pharmacy's certificate of regis­tration should be revoked and that it be denied any applications to renew or modify its controlled substance registration indefinitely.13

Suspension and Revocation Authority Due to Imminent Danger to Public Health or Safety

Separately, the DEA may revoke or suspend a controlled substance registration without having to provide an Order14 described above in cases of imminent danger to public health or safety.15

the Attorney General16 may, in his discretion, suspend any registration simultaneously with the institution of proceedings under this section, in cases where he finds that there is an imminent danger to the public health or safety. A failure [by dispensing practitio­ners] to comply with [registration requirements] may be treated under this subsection as grounds for immediate suspension of a registration granted under such section. A suspension under this subsec­tion shall continue in effect until the conclusion of such proceedings, including judicial review thereof, unless sooner withdrawn by the Attorney General or dissolved by a court of competent jurisdiction.17

In May 2018, the DEA issued its first Immediate Suspension Order in six years.18 This Immediate Suspension Order was issued to Morrison & Dickson Company's distribution center in Shreve­port, Louisiana on May 4, 2018 and required the company to stop distributing controlled substances immediately.19 The DEA had been investigating the company's distribution of suspiciously large quantities of controlled substances to independent pharmacies

(sometimes six to ten times an expected amount). On May 8, 2018, U.S. District Court Judge Elizabeth Foote entered a temporary restraining order against the DEA because there was a substantial likelihood that the agency's action was arbitrary and capricious. The DEA subsequently rescinded the order on May 18, 2018.20

Implications

While the DEA's power to revoke controlled substance permits is not a new tool, it has been quite effective in allowing the DEA to take quick, and often decisive action, against manufacturers, distributors, prescribers, and dispensers as the federal government takes enforcement action against the supply chain fueling the opioid epidemic. It remains to be seen if this trend will continue, but it is highly likely to continue to be an arrow in the quiver of federal law enforcement. The use of DEA permit revocation authority, when successful, carries the ultimate result of permanently shuttering the business of offenders. As such, it is imperative to work with your drug supply chain clients to ensure they have meaningful compli­ance policies, procedures, and monitoring in place. Further, take steps to confirm that your clients have the appropriate resources and commitment to implement their compliance program.

Footnotes

1 https://www.dea.gov/press-releases/2018/04/02/dea-surge-drug-diversion-investigations-leads-28-arrests-and-147-revoked.

2 21 U.S.C. § 824(a).

3 21 U.S.C. § 824(c).

4 21 U.S.C. § 824(c)(2).

5 83 Fed. Reg. 10876 (Mar. 13, 2018).

6 21 U.S.C. § 824(a)(4).

7 83 Fed. Reg. 10876, 10896 (Mar. 13, 2018).

8   121 C.F.R. § 1316.66(a) "Within twenty days after the date upon which a party
is served a copy of the report of the presiding officer, such party may file with the Hearing Clerk, Office of the Administrative Law Judge, exceptions to the recommended decision, findings of fact and conclusions of law contained in the report. The party shall include a statement of supporting reasons for such exceptions, together with evidence of record (including specific and com­plete citations of the pages of the transcript and exhibits) and citations of the authorities relied upon."

9 83 Fed. Reg. 10876, 10903 (Mar. 13, 2018).

10 https://www.deadiversion.usdoj.gov/mtgs/pharm_awareness/conf_2013/ march_2013/carter.pdf.

11 21 U.S.C. § 824(a)(4).

12 83 Fed. Reg. 7304 (Feb. 20, 2018).

13 83 Fed. Reg. 7304, 7336 (Feb. 20, 2018).

14 21 U.S.C. § 824(c)(5) Noting that "the requirements of this subsection shall not apply to the issuance of an immediate suspension order under subsection."

15 21 U.S.C. § 824(d)(2) defining imminent danger to the public health or safety as "due to the failure of the registrant to maintain effective controls against diversion or otherwise comply with the obligations of a registrant under this subchapter or subchapter II, there is a substantial likelihood of an immediate threat that death, serious bodily harm, or abuse of a controlled substance will occur in the absence of an immediate suspension of the registration."

16 21 U.S.C. § 1301.36(a) noting that the DEA Administrator may also suspend or revoke a controlled substance registration under this section.

17 21 U.S.C. § 824(d)(1).

18 https://thehill.com/policy/healthcare/386381-dea-issues-first-sales-suspension-under-trump-for-opioid-wholesaler.

19 https://www.justice.gov/opa/pr/dea-suspends-registration-morris-dickson-company-distributing-controlled-substances.

20 https://www.law360.com/articles/1045360/dea-drops-enforcement-order-against-opioid-distributor. See Morris and Dickson Co LLC v. Sessions, No. 5:18-cv-00605.

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