# Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3AR45164 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** December 18, 2018 - **Citation:** R45164 ## Text Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis -name redactedLegislative Attorney Updated December 18, 2018 Congressional Research Service 7-.... www.crs.gov R45164 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis Summary According to the Centers for Disease Control and Prevention, the annual number of drug overdose deaths involving prescription opioids (such as hydrocodone, oxycodone, and methadone) and illicit opioids (such as heroin and nonpharmaceutical fentanyl) has more than quadrupled since 1999. A November 2017 report issued by the President’s Commission on Combating Drug Addiction and the Opioid Crisis also observed that “[t]he crisis in opioid overdose deaths has reached epidemic proportions in the United States ... and currently exceeds all other drug-related deaths or traffic fatalities.” How the current opioid epidemic happened, and who may be responsible for fueling it, are complicated questions, though reports suggest that several parties likely played contributing roles, including pharmaceutical manufacturers and distributors, doctors, health insurance companies, rogue pharmacies, and drug dealers and addicts. Many federal departments and agencies are involved in efforts to combat opioid abuse and addiction, including a law enforcement agency within the U.S. Department of Justice, the Drug Enforcement Administration (DEA), which is the focus of this report. The primary federal law governing the manufacture, distribution, and use of prescription and illicit opioids is the Controlled Substances Act (CSA), a statute that the DEA is principally responsible for administering and enforcing. The CSA and DEA regulations promulgated thereunder establish a framework through which the federal government regulates the manufacture, distribution, importation, exportation, and use of certain substances which have the potential for abuse or psychological or physical dependence, including opioids. Congress enacted the CSA in 1970 to facilitate the availability of controlled substances for authorized medical, scientific, research, and industrial purposes, while also preventing these substances from being diverted out of legitimate channels for illegal purposes such as drug abuse and drug trafficking activities. The CSA aims to protect the public’s health and safety from dangers posed by highly addictive or dangerous controlled substances that are diverted into the illicit market, while also ensuring that patients have access to pharmaceutical controlled substances for legitimate medical purposes such as the treatment of pain. This report describes the current federal legal regime governing opioids and other controlled substances under the CSA and its implementing regulations, including (1) the classification of various plants, drugs, and chemicals into one of five schedules based on the substance’s medical use, potential for abuse, and safety or dependence liability; (2) who must register with the DEA in order to receive authorization to handle the substances (such as drug manufacturers, wholesale distributors, doctors, hospitals, pharmacies, and scientific researchers); (3) what obligations registrants must satisfy in order to maintain a valid registration (such as keeping records of drug inventories and transactions, submitting reports to the DEA, and providing security measures to safeguard controlled substances); and (4) the DEA’s administrative, civil, and criminal authorities for enforcing regulatory compliance with the CSA (such as suspending or revoking a registrant’s legal authority to handle controlled substances if the DEA Administrator finds that the registrant has “committed such acts as would render his registration ... inconsistent with the public interest.”). The report then examines DEA initiatives and actions taken, pursuant to its legal authorities under the CSA, which specifically target the abuse of opioids. The report concludes by describing the legislative response to the opioid epidemic, including a summary of the amendments to the CSA made by legislation enacted by the 115th Congress, the Substance UseDisorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (P.L. 115-271). Congressional Research Service Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis Contents Brief Background on the Opioid Epidemic ..................................................................................... 3 Overview of the CSA ...................................................................................................................... 5 Scheduling of Controlled Substances ........................................................................................ 5 Emergency or Temporary Scheduling ................................................................................. 7 Scheduling in Order to Satisfy International Treaty Obligations ........................................ 8 Who Must Register with the DEA?........................................................................................... 8 Exceptions to the Registration Requirement ..................................................................... 10 Regulatory Obligations of Registrants Under the CSA........................................................... 10 Recordkeeping ................................................................................................................... 11 Security Measures .............................................................................................................. 11 Reporting .......................................................................................................................... 12 Quotas ............................................................................................................................... 13 Prescription Requirements ................................................................................................ 13 What Are the Potential Consequences for Violating the CSA? ............................................... 15 State Regulation of Controlled Substances ............................................................................. 17 DEA’s Legal Authorities for Enforcing the CSA .......................................................................... 18 Investigations .......................................................................................................................... 19 Enforcement Actions ............................................................................................................... 20 Letter of Admonition or Informal Hearing ....................................................................... 20 Administrative Proceedings to Deny, Revoke, or Suspend a Registration ....................... 20 Immediate Suspension Orders .......................................................................................... 22 DEA’s Response to the Opioid Abuse Crisis ................................................................................ 24 DEA Actions Against Registrants ........................................................................................... 24 Emergency Scheduling of Illicit Fentanyl ............................................................................... 28 Aggregate Production Quotas for Certain Schedule II Opioids .............................................. 29 Congressional Actions Addressing the Opioid Epidemic .............................................................. 30 Expanding Disposal Options for Unwanted Opioid Medication............................................. 30 Increasing Flexibility With Respect to Medication-Assisted Treatment for Opioid Addiction.............................................................................................................................. 33 Providing Manufacturers and Distributors Certain ARCOS Data........................................... 35 Adding Considerations for DEA Opioid Quotas ..................................................................... 36 Strengthening Requirements to Detect and Report Suspicious Orders ................................... 36 Other Legislative Proposals That the 116th Congress Could Consider to Amend the CSA........... 37 Contacts Author Contact Information .......................................................................................................... 39 Congressional Research Service Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis he alarming rise in drug overdose deaths involving opioids over the past two decades1 has prompted the federal government to examine the causes of the public health crisis, identify possible solutions to counteract the problem, and take actions to address the crisis.2 The primary federal law governing the manufacture, distribution, and use of prescription and illicit opioids is the Controlled Substances Act (CSA or the act),3 which is administered and enforced by the Drug Enforcement Administration (DEA) in the U.S. Department of Justice.4 The CSA provides the legal regime through which the federal government (1) regulates and facilitates the lawful production, possession, and distribution5 of controlled substances, including opioids; (2) prevents diversion6 of these substances from legitimate purposes; and (3) penalizes unauthorized activities involving controlled substances.7 T The regulatory framework under the CSA relies primarily on a registration system: the act requires persons who handle controlled substances (such as drug manufacturers, wholesale distributors, exporters, importers, health care professionals, hospitals, pharmacies, and scientific researchers) to register with the DEA and comply with the terms and conditions of the registration.8 Through this registration mechanism, the CSA creates a “closed system” of distribution9 in which distribution may lawfully occur among registered handlers of controlled substances, referred to under the act as “registrants.”10 To monitor the amount of particularly 1 Centers for Disease Control and Prevention, Overdose Deaths Involving Opioids, Cocaine, and Psychostimulants— United States, 2015–2016, 67 MORBIDITY AND MORTALITY WEEKLY REPORT No. 12 (Mar. 30, 2018), https://www.cdc.gov/mmwr/volumes/67/wr/pdfs/mm6712-H.pdf. 2 See, e.g., THE PRESIDENT’S COMMISSION ON COMBATING DRUG ADDICTION AND THE OPIOID CRISIS: FINAL REPORT (2017); see also The Drug Enforcement Administration’s Role in Combating the Opioid Epidemic: Hearing Before the H. Comm. on Energy & Commerce, Subcomm. on Oversight and Investigations, 115th Cong. (2018); Combating the Opioid Crisis: Prevention and Public Health Solutions: Hearing Before the H. Comm. on Energy & Commerce, Subcomm. on Health, 115th Cong. (2018); The Opioid Crisis: An Examination of How We Got Here and How We Move Forward: Hearing Before the S. Comm. on Health, Educ., Labor & Pensions, 115th Cong. (2018); Oversight of the Ensuring Patient Access and Effective Drug Enforcement Act: Hearing Before the S. Judiciary Comm., 115th Cong. (2017); The Federal Response to the Opioid Crisis: Hearing Before the S. Comm. on Health, Educ., Labor & Pensions, 115th Cong. (2017). 3 Congress enacted the CSA as Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970, P.L. 91513, 84 Stat. 1236 (codified as amended at 21 U.S.C. §§ 801-904 (2012)). 4 While the CSA directs the Attorney General to enforce its provisions, the CSA also permits him to delegate such responsibilities to any other officer or employee of the Department of Justice. 21 U.S.C. § 871(a). Pursuant to 28 C.F.R. § 0.100(b), the Attorney General has assigned much of the authority to implement and enforce the CSA to the DEA Administrator. Accordingly, the term “DEA Administrator” will be used instead of the term “Attorney General” with respect to any references in the CSA to the Attorney General for the remainder of this report. 5 The CSA broadly defines “distribution” to include virtually every transfer of possession. 21 U.S.C. § 802(11) (“The term ‘distribute’ means to deliver (other than by administering or dispensing) a controlled substance or a listed chemical.”). 6 The DEA has explained that the term “diversion,” used in the context of the CSA, refers to “the redirection of controlled substances which may have lawful uses into illicit channels.” Drug Enf’t Admin., Controlled Substances Quotas, 83 Fed. Reg. 32,784 (July 16, 2018). 7 This report focuses only on federal regulation of controlled substances under the Controlled Substances Act and does not discuss other federal laws that may apply to controlled substance medications, such as the Federal Food, Drug, and Cosmetic Act, P.L. 75-717, 52 Stat. 1057 (1938) (chiefly enforced by the U.S. Food and Drug Administration), or any state laws pertaining to medical practices and public health and safety. 8 21 U.S.C. § 822. In addition, the CSA grants the DEA Administrator broad authority to issue rules and regulations “relating to the registration and control of the manufacture, distribution, and dispensing of controlled substances.... ” Id. § 821. 9 Drug Enf’t Admin., Electronic Prescriptions for Controlled Substances, 75 Fed. Reg. 16,236, 16,237 (Mar. 31, 2010). 10 According to 21 C.F.R. § 1300.02(b), the term “registrant” means “any person who is registered [with the DEA] Congressional Research Service R45164 · VERSION 6 · UPDATED 1 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis dangerous drugs that enters this distribution system,11 the CSA requires the DEA to establish a quota system that restricts the total amount of certain controlled substances that may be annually produced or manufactured.12 In order to minimize theft and diversion and to help the DEA monitor the flow of controlled substances in the United States,13 the CSA and its implementing regulations subject registrants to strict requirements regarding recordkeeping, maintaining the security of their controlled substance inventories, and reporting certain information to the DEA.14 The “closed system” of distribution, along with registrant compliance with the CSA’s regulatory requirements, helps to ensure that a particular controlled substance is always accounted for by a DEA-registered entity,15 from its creation until it is dispensed16 to a patient17 or is destroyed.18 Note that patients are not required to register with the DEA19 because the controlled substances in their possession “are no longer part of the closed system of distribution and are no longer subject to DEA’s system of corresponding accountability.”20 A registrant’s failure to meet its obligations under the CSA can result in a controlled substance being diverted from legitimate channels. For example, “[d]istributors that blindly sell pharmaceutical controlled substances to rogue pharmacies, and practitioners21 who issue prescriptions without a legitimate medical purpose are diverting.”22 Such diversion can contribute to drug abuse and addiction,23 which, in turn, increase the number of overdose deaths and pursuant to [21 U.S.C. §§ 823 or 958].” 11 Improving Management of the Controlled Substances Quota Process, Hearing Before the S. Caucus on Int’l Narcotics Control, 114th Cong. 2 (2015) (statement of Joseph T. Rannazzisi, DEA). 12 21 U.S.C. § 826(a). 13 Improving Predictability and Transparency in DEA and FDA Regulation: Hearing Before the H. Comm. on Energy & Commerce, Subcomm. on Health, 113th Congress 1 (2014) (statement of Joseph T. Rannazzisi, DEA). 14 See, e.g., 21 C.F.R. § 1304.11(a) (“Each inventory shall contain a complete and accurate record of all controlled substances on hand on the date the inventory is taken.... ”); id. § 1301.71(a) (“All applicants and registrants shall provide effective controls to guard against theft and diversion of controlled substances.”); 21 U.S.C. § 832 (“Each registrant shall—design and operate a system to identify suspicious orders for the registrant … and upon discovering a suspicious order or series of orders, notify the Administrator of the Drug Enforcement Administration….”). 15 Improving Predictability and Transparency in DEA and FDA Regulation: Hearing Before the H. Comm. on Energy & Commerce, Subcomm. on Health, 113th Congress 1 (2014) (statement of Joseph T. Rannazzisi, DEA). 16 The CSA defines “dispense” to mean “to deliver a controlled substance to an ultimate user or research subject by, or pursuant to the lawful order of, a practitioner, including the prescribing and administering of a controlled substance and the packaging, labeling or compounding necessary to prepare the substance for such delivery.” 21 U.S.C. § 802 (10). 17 The CSA refers to an individual patient as an “ultimate user,” meaning “a person who has lawfully obtained, and who possesses, a controlled substance for his own use or for the use of a member of his household or for an animal owned by him or by a member of his household.” Id. § 802(27). 18 Drug Enf’t Admin., Definition and Registration of Reverse Distributors, 70 Fed. Reg. 22,591 (May 2, 2005). 19 21 U.S.C. § 822(c)(3). 20 DEA, Definition and Registration of Reverse Distributors, 68 Fed. Reg. 41,222, 41,226 (proposed July 11, 2003). 21 The CSA defines the term “practitioner” to mean “a physician, dentist, veterinarian, scientific investigator, pharmacy, hospital, or other person licensed, registered, or otherwise permitted, by the United States or the jurisdiction in which he practices or does research, to distribute, dispense, conduct research with respect to, administer, or use in teaching or chemical analysis, a controlled substance in the course of professional practice or research.” 21 U.S.C. § 802(21). 22 Improving Predictability and Transparency in DEA and FDA Regulation: Hearing Before the H. Comm. on Energy & Commerce, Subcomm. on Health, 113th Congress 2 (2014) (statement of Joseph T. Rannazzisi, DEA). 23 Id. Congressional Research Service R45164 · VERSION 6 · UPDATED 2 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis emergency room visits, two defining features of the current opioid epidemic.24 In addition, some users who abuse prescription opioids may also start using cheaper and potentially easier to obtain illicit opioids such as heroin, which provide similar euphoric effects.25 The CSA provides civil and criminal penalties for any unlawful26 manufacture, distribution, importation, exportation, or possession of controlled substances.27 Such violations may include (1) “regulatory” offenses committed by registrants who do not adhere to their responsibilities under the CSA, thereby increasing the risk of diversion, and (2) illicit trafficking or possession crimes that occur outside the “closed system” of authorized controlled substance distribution that primarily involve nonregistrants.28 This report first provides a brief overview of the opioid epidemic and then describes in greater detail the current federal legal regime governing opioids and other controlled substances under the CSA and its implementing regulations. After that, the report examines DEA actions taken that are specifically targeted at addressing opioid abuse and describes recently enacted laws amending the CSA that impact the opioid regulatory system, including the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (P.L. 115-271), enacted by the 115th Congress. The report concludes by discussing other legislative options that the 116th Congress could consider to amend the CSA further to address the opioid epidemic. Brief Background on the Opioid Epidemic29 The Centers for Disease Control and Prevention (CDC) has declared that the nation “is in the midst of an opioid overdose epidemic,” citing statistics that show the number of overdose deaths involving opioids (including prescription opioids and illegal opioids such as heroin and 24 America’s Addiction to Opioids: Heroin and Prescription Drug Abuse, Hearing Before the S. Caucus on Int’l Narcotics Control, 113th Cong. 3-4 (2014) (statement of Dr. Nora D. Volkow, Director, Nat’l Inst. on Drug Abuse); see also Masters Pharm., Inc. v. DEA, 861 F.3d 206, 211 (D.C. Cir. 2017)(“Breakthroughs in the development of prescription opioid painkillers have vastly increased their popularity. But that popularity has taken a toll. Opioids are heavily addictive and often lethal in high doses.”). 25 Id. at 4, 8; see also Nat’l Inst. on Drug Abuse, Prescription Opioid Use is a Risk Factor for Heroin Use, https://www.drugabuse.gov/publications/research-reports/relationship-between-prescription-drug-heroin-abuse/ prescription-opioid-use-risk-factor-heroin-use (last visited Apr. 3, 2018). 26 “Unlawful” in this context means any actions involving controlled substances that are not authorized under the CSA. See Drug Enf’t Admin., Electronic Prescriptions for Controlled Substances, 75 Fed. Reg. 16,236, 16,237 (Mar. 31, 2010) (“The Controlled Substances Act is unique among criminal laws in that it stipulates acts pertaining to controlled substances that are permissible. That is, if the CSA does not explicitly permit an action pertaining to a controlled substance, then by its lack of explicit permissibility the act is prohibited.”). 27 21 U.S.C. §§ 841-865. 28 This report is focused primarily on the CSA’s noncriminal regulatory provisions pertaining to activities permitted by the CSA. For a listing of the CSA’s criminal provisions regarding unauthorized trafficking, possession, or other prohibited activities involving controlled substances, see CRS Report RL30722, Drug Offenses: Maximum Fines and Terms of Imprisonment for Violation of the Federal Controlled Substances Act and Related Laws, by (name redacted) . 29 For more information about the opioid epidemic, see CRS Report R44987, The Opioid Epidemic and Federal Efforts to Address It: Frequently Asked Questions, by (name redacted) and (name redacted) ; CRS Report R45279, Buprenorphine and the Opioid Crisis: A Primer for Congress, by (name redacted) ; CRS In Focus IF11041, The Opioid Epidemic and the U.S. Labor Market, by (name redacted) and (name redacted) ; CRS In Focus IF10219, Opioid Treatment Programs and Related Federal Regulations, by (name redacted) ; CRS Legal Sidebar LSB10226, State and Local Governments Pursue Judicial Solutions to the Opioid Epidemic, by (name redacted) ; and CRS Report R45218, The Opioid Epidemic and the Food and Drug Administration: Legal Authorities and Recent Agency Action, by (name redact ed) . Congressional Research Service R45164 · VERSION 6 · UPDATED 3 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis nonpharmaceutical fentanyl) has more than quadrupled since 1999, and on average 115 Americans now die each day from an opioid overdose.30 Former Attorney General Jeff Sessions referred to the opioid epidemic as “the deadliest drug crisis in American history,”31 and President Trump in October 2017 directed the Secretary of Health and Human Services to declare the crisis a national public health emergency.32 The CSA defines the term “opioid” to mean “any drug or other substance having an addictionforming or addiction-sustaining liability similar to morphine or being capable of conversion into a drug having such addiction-forming or addiction-sustaining liability.”33 Opioids can include prescription pain relief drugs34 such as hydrocodone, oxycodone, codeine, morphine, and fentanyl,35 as well as illegal drugs such as heroin and nonpharmaceutical (illicitly produced) fentanyl.36 While doctors may prescribe U.S. Food and Drug Administration (FDA)-approved opioids to patients to alleviate their pain, particularly following surgery or injury or for serious health conditions such as cancer, some individuals may choose to abuse opioids for nonmedical reasons (such as to experience feelings of relaxation or to get “high”) or by taking them in a higher dosage or through different means than prescribed by their doctor (such as by snorting or injecting the substance into a vein).37 The CDC has estimated that more than 40% of all opioid overdose deaths in the United States in 2016 involved an FDA-approved prescription opioid.38 How the opioid epidemic occurred, and who is responsible for fueling it, are complicated questions, though reports have suggested that many parties are likely involved to some extent, including pharmaceutical manufacturers39 and distributors,40 doctors,41 health insurance 30 Centers for Disease Control and Prevention, Opioid Overdose: Understanding the Epidemic, https://www.cdc.gov/ drugoverdose/epidemic/index.html (last visited Apr. 3, 2018). 31 Press Release, U.S. Dep’t of Just., Off. of Pub. Aff., Department of Justice Awards Nearly $59 Million to Combat Opioid Epidemic, Fund Drug Courts (Sept. 22, 2017), https://www.justice.gov/opa/pr/department-justice-awardsnearly-59-million-combat-opioid-epidemic-fund-drug-courts. 32 U.S. DEP’T OF HEALTH & HUM. SRVS., DETERMINATION THAT A PUBLIC HEALTH EMERGENCY EXISTS (Oct. 2017), https://www.hhs.gov/sites/default/files/opioid%20PHE%20Declaration-no-sig.pdf; see also Brianna Ehley, Trump Administration Extending Opioid Emergency Declaration, POLITICO (Jan. 19, 2018, 8:14 PM), https://www.politico.com/story/2018/01/19/trump-opioids-emergency-declaration-extension-300590. For information about what the declaration of a public health emergency does to provide the Secretary of Health and Human Services with additional authorities and resources to address the emergency, see U.S. Dep’t of Health & Hum. Srvs., Public Health Emergency Declaration, https://www.phe.gov/Preparedness/legal/Pages/phedeclaration.aspx (last visited Apr. 11, 2018). 33 21 U.S.C. § 802(18). 34 Prescription drugs are medications that may be marketed in the United States only after the U.S. Food and Drug Administration has approved their safety and effectiveness. For more information on this topic, see CRS Report R41983, How FDA Approves Drugs and Regulates Their Safety and Effectiveness, by (name redacted) and (name redacted) . 35 NAT’L INST. ON DRUG ABUSE, DRUG FACTS: PRESCRIPTION OPIOIDS 1 (Jan. 2018), https://d14rmgtrwzf5a.cloudfront.net/sites/default/files/drugfacts-prescriptionopioids.pdf. 36 Nat’l Inst. on Drug Abuse, Opioids, https://www.drugabuse.gov/drugs-abuse/opioids (last visited Apr. 11, 2018). 37 NAT’L INST. ON DRUG ABUSE, DRUG FACTS: PRESCRIPTION OPIOIDS 1-2 (Jan. 2018). 38 Centers for Disease Control and Prevention, Opioid Overdose: Prescription Opioid Overdose Data, https://www.cdc.gov/drugoverdose/data/overdose.html (last visited Apr. 3, 2018). 39 Alana Semuels, Are Pharmaceutical Companies to Blame for the Opioid Epidemic?, THE ATLANTIC (June 2, 2017), https://www.theatlantic.com/business/archive/2017/06/lawsuit-pharmaceutical-companies-opioids/529020/. 40 David Meyer & Geoffrey Smith, DEA Whistleblower Blasts Drug Distributors, Congress Over Opioid “Collusion,” FORTUNE (Oct. 16, 2017), http://fortune.com/2017/10/16/rannazzisi-dea-drug-distributors-opioids/. 41 Mandy Oaklander, How Doctors Are Fueling the Opioid Epidemic, TIME (Feb. 17, 2017), http://time.com/4675325/ doctors-opioid-epidemic/. Congressional Research Service R45164 · VERSION 6 · UPDATED 4 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis companies,42 rogue pharmacies,43 and drug dealers and addicts.44 The National Institute on Drug Abuse has described the origins of the opioid overdose crisis as follows: In the late 1990s, pharmaceutical companies reassured the medical community that patients would not become addicted to prescription opioid pain relievers, and healthcare providers began to prescribe them at greater rates. This subsequently led to widespread diversion and misuse of these medications before it became clear that these medications could indeed be highly addictive.45 The President’s Commission on Combating Drug Addiction and the Opioid Crisis46 also cited excessive prescribing of opioids since 1999 as a significant contributor to the proliferation of opioids.47 The commission identified several other factors that have influenced the current opioid crisis, including large scale production and distribution of addictive opioids, widespread availability of illicit heroin and fentanyl, unethical physician prescribing practices and rogue pharmacies that fill those illegitimate prescriptions, and a lack of education for medical professionals and patients in prescribing and using opioids, respectively.48 Overview of the CSA This section provides a general overview of the CSA’s closed system of distribution that regulates opioids and other types of controlled substances, including the schedules in which the substances are placed and the regulatory requirements and obligations that registrants must satisfy, such as (1) registering with the DEA, (2) keeping accurate and complete records of controlled substance inventories and transactions, (3) implementing security measures to safeguard controlled substances from theft or diversion, (4) reporting certain information to the DEA (including suspicious controlled substance orders), (5) meeting production quotas, and (6) prescribing controlled substances only for legitimate medical purposes. Scheduling of Controlled Substances The CSA places various plants, drugs, and chemicals (such as narcotics, stimulants, depressants, hallucinogens, and anabolic steroids) into one of five schedules based on the substance’s medical 42 Katie Thomas & Charles Ornstein, Amid Opioid Crisis, Insurers Restrict Pricey, Less Addictive Painkillers, N.Y. TIMES (Sept. 17, 2017), https://www.nytimes.com/2017/09/17/health/opioid-painkillers-insurance-companies.html. 43 Press Release, Drug Enf’t Admin. Pub. Aff., DEA Large-scale Operation Targets 26 Pharmacies in Three States in Attack Against Illicit Opioid Abuse and Trafficking (Nov. 9, 2017), https://www.dea.gov/divisions/hq/2017/ hq120517.shtml. 44 Nathaniel Popper, Opioid Dealers Embrace the Dark Web to Send Deadly Drugs by Mail, N.Y. TIMES (June 10, 2017), https://www.nytimes.com/2017/06/10/business/dealbook/opioid-dark-web-drug-overdose.html. 45 Nat’l Inst. on Drug Abuse, Opioid Overdose Crisis, https://www.drugabuse.gov/drugs-abuse/opioids/opioidoverdose-crisis (last visited Apr. 3, 2018); see also Fentanyl: The Next Wave of the Opioid Crisis: Hearing Before the H. Comm. on Energy & Commerce, Subcomm. on Oversight and Investigations, 115th Cong. 5 (2017) (statement of Dr. Wilson Compton, Deputy Dir., Nat’l Inst. on Drug Abuse). 46 Established by Exec. Order No. 13,784, 82 Fed. Reg. 16,283 (Apr. 3, 2017). 47 THE PRESIDENT’S COMMISSION ON COMBATING DRUG ADDICTION AND THE OPIOID CRISIS: FINAL REPORT 19-23 (2017), https://www.whitehouse.gov/ondcp/presidents-commission/; see also Substance Abuse & Mental Health Srvs. Admin., Prescription Drug Misuse and Abuse, https://www.samhsa.gov/topics/prescription-drug-misuse-abuse (last visited Apr. 4, 2018) (“The problem of prescription drug abuse and overdose is complex, involving insufficient oversight to curb inappropriate prescribing, insurance and pharmacy benefit policies, and a belief by many people that prescription drugs are not dangerous.”). 48 Id. Congressional Research Service R45164 · VERSION 6 · UPDATED 5 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis use, potential for abuse, and safety or dependence liability.49 Opioids are types of narcotic drugs.50 To restrict access to chemicals used in the illicit manufacture of certain controlled substances, the CSA also regulates specified “listed chemicals.”51 Furthermore, the CSA regulates controlled substance “analogues,” which are substances that are not controlled but have chemical structures substantially similar to those of controlled substances found in Schedule I or II.52 The order of the five schedules in which controlled substances are categorized reflects substances that are progressively less dangerous and addictive.53 Schedule I contains substances, such as the hallucinogen lysergic acid diethylamide (LSD) and the illicit opioid heroin, that have “a high potential for abuse” with “no currently accepted medical use in treatment in the United States” and that cannot safely be dispensed under a prescription.54 Schedule I substances may be used only for bona fide, federal government-approved research studies.55 In contrast, schedules II, III, IV, and V include substances that have recognized medical uses, such as prescription opioids like oxycodone, codeine, and morphine, and may be manufactured, distributed, prescribed, dispensed, and possessed in accordance with the CSA.56 The CSA provides an administrative mechanism for substances to be controlled (added to a schedule);57 decontrolled (removed from the scheduling framework altogether); and rescheduled or transferred from one schedule to another.58 Federal rulemaking proceedings to add, delete, or change the schedule of a drug or substance may be initiated by the DEA, the U.S. Department of Health and Human Services (HHS), or by petition by any interested person.59 The DEA Administrator must request from HHS a scientific and medical evaluation and recommendation as to whether the drug or substance should be controlled or removed from control.60 The DEA Administrator then must evaluate all of the relevant data and make a final determination as to whether the drug or substance should be controlled or removed entirely from control.61 In making such determination, the DEA Administrator is required to consider statutory factors such as the drug’s actual or relative potential for abuse; scientific evidence of its pharmacological 49 21 U.S.C. § 812(b). 50 21 C.F.R. § 1300.01 (definition of “narcotic drug”). 51 21 U.S.C. §§ 830; 802 (33-35). Listed chemicals are divided into two categories: List I and List II. While both categories of chemicals can be used to manufacture controlled substances illicitly, List I chemicals are more strenuously regulated under the CSA than List II chemicals because List I chemicals are “important to the manufacture of the controlled substances.” Id. § 802(34). 52 Id. § 802(32)(A) and (B). 53 When Congress enacted the CSA in 1970, it established “initial schedules” of controlled substances, id. § 812(c), but specified that the schedules “shall be updated” periodically, id. § 812(a). The current list of controlled substances within their designated schedules may be found in 21 C.F.R. § 1308.11-15. 54 21 U.S.C. § 812(b). 55 Id. § 823(f). 56 Id. § 812(b). 57 The CSA defines the term “control” to mean “to add a drug or other substance, or immediate precursor, to a schedule under [§ 812 of the act], whether by transfer from another schedule or otherwise.” Id. § 802(5). 58 Id. § 811 specifies the administrative scheduling procedures. 59 Id. § 811(a). 60 Id. § 811(b). The medical and scientific evaluations are binding on the DEA with respect to such matters and form a part of the scheduling decision. The recommendation on the initial scheduling of a substance is binding only to the extent that if HHS recommends that the drug or substance not be controlled, the DEA may not add it to its schedules. Id. 61 Id. Congressional Research Service R45164 · VERSION 6 · UPDATED 6 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis effect; the current state of scientific knowledge regarding the drug or substance; the risk to the public health from the drug; and whether the substance is an immediate precursor62 of a substance already controlled under the act.63 After the DEA Administrator makes this determination, he must make specific findings concerning the drug or substance that dictate the schedule in which the drug or substance will be placed.64 For example, in 2009, the DEA requested from HHS an evaluation and recommendation concerning whether to reschedule hydrocodone combination products (HCPs) such as Vicodin® from Schedule III to Schedule II.65 After evaluating the scientific and medical evidence showing, among other things, significant diversion of HCPs and the health and safety risks created by people who abuse HCPs, HHS then recommended to DEA that HCPs should be reclassified to the more restrictive Schedule II,66 In 2014, DEA published a final rule that administratively reschedules HCPs from Schedule III to Schedule II, thereby subjecting anyone who manufactures, distributes, or dispenses HCPs to the more stringent regulatory requirements (and administrative, civil, and criminal sanctions) that are applicable to Schedule II controlled substances.67 Congress may also change the scheduling status of a drug or substance at any time through enactment of legislation. For example, Congress passed the Synthetic Drug Abuse Prevention Act of 201268 that permanently added two synthetic cathinones (central nervous system stimulants) to Schedule I of the CSA, along with cannabimimetic substances (commonly referred to as synthetic marijuana).69 Emergency or Temporary Scheduling The CSA authorizes the DEA Administrator to place a drug or substance that is not currently controlled, on a temporary basis, into Schedule I when he finds such scheduling “necessary to avoid an imminent hazard to the public safety.”70 The DEA Administrator may not issue a temporary scheduling order until 30 days after he notifies both the public and the HHS Secretary of his intent to issue the temporary scheduling order and of his justification for issuing the order.71 Furthermore, the DEA Administrator must consider the HHS Secretary’s comments regarding the 62 The CSA defines an “immediate precursor” to mean a substance that (1) the DEA Administrator has determined to be and has “designated as being the principal compound used, or produced primarily for use, in the manufacture of a controlled substance;” (2) “is an immediate chemical intermediary used or likely to be used in the manufacture of such controlled substance;” and (3) is necessary to control “to prevent, curtail, or limit the manufacture of such controlled substance.” 21 U.S.C. § 802 (definition of “immediate precursor”). 63 See id. § 811(c)(1)-(8) (complete listing of factors the DEA Administrator must consider when determining control or removal of substances from schedules). 64 See id. § 812(b) (“[A] drug or other substance may not be placed in any schedule unless the findings required for such schedule are made with respect to such drug or other substance.”). 65 Drug Enf’t Admin., Schedules of Controlled Substances: Rescheduling of Hydrocodone Combination Products From Schedule III to Schedule II, 79 Fed. Reg. 49,661, 49,662 (Aug. 22, 2014). 66 Id. at 49.663. 67 Id. at 49,680. 68 P.L. 112-144, 126 Stat. 1130 (2012). 69 For more information on this law and this topic generally, see CRS Report R42066, Synthetic Drugs: Overview and Issues for Congress, by (name redacted) and (name redacted) . 70 21 U.S.C. § 811(h)(1). 71 Id. Congressional Research Service R45164 · VERSION 6 · UPDATED 7 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis temporary order.72 A drug or substance may be temporarily scheduled for two years and possibly longer—up to an additional year—if formal scheduling procedures have been initiated.73 As discussed below in the report, DEA has exercised its emergency scheduling authority eight times to control seventeen substances structurally related to the opioid fentanyl by placing them temporarily in Schedule I.74 Scheduling in Order to Satisfy International Treaty Obligations Treaty obligations may require the DEA Administrator to control or reschedule a substance if existing controls under federal law are less stringent than those required by a treaty. 75 The United States is a party to three United Nations drug control treaties that impose certain international obligations relating to the manufacture, distribution, use, and possession of controlled substances, including the Single Convention on Narcotic Drugs of 1961,76 which was designed to establish effective control over international and domestic traffic in narcotics, coca leaf, cocaine, and marijuana.77 The United States is also party to the Convention on Psychotropic Substances of 1971,78 which was designed to establish similar control over stimulants, depressants, and hallucinogens. Finally, the United States is a party to the 1988 Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances,79 which requires parties, among other things, to control precursor chemicals used in the illicit manufacture of drugs and to take measures to combat money laundering crimes related to drug trafficking. Who Must Register with the DEA? The CSA requires any person who seeks to manufacture, distribute, dispense, or conduct research involving any controlled substance (such as drug manufacturers, wholesale distributors, physicians, hospitals, pharmacies, and scientific researchers) to obtain a registration from the 72 Id. § 811(h)(4). 73 Id. § 811(h)(2). 74 Drug Enf’t Admin., Schedules of Controlled Substances: Temporary Placement of Fentanyl-Related Substances in Schedule I, 83 Fed. Reg. 5,188, 5,189 (Feb. 6, 2018). 75 The procedures for scheduling actions to meet obligations under international treaties are found at id. § 811(d). 76 Single Convention on Narcotic Drugs, Mar. 30, 1961, 18 U.S.T. 1407. 77 For example, in response to petitions from the public to transfer marijuana from Schedule I of the CSA to Schedule II, the DEA explained how the United States obligations under the international drug control treaties constrain the agency’s choice of schedules with respect to marijuana: The DEA Administrator is obligated under [21 U.S.C.] section 811(d) to control marijuana in the schedule that he deems most appropriate to carry out the U.S. obligations under the Single Convention. It has been established in prior marijuana rescheduling proceedings that placement of marijuana in either schedule I or schedule II of the CSA is ‘‘necessary as well as sufficient to satisfy our international obligations’’ under the Single Convention. NORML v. DEA, 559 F.2d 735, 751 (D.C. Cir. 1977). As the United States Court of Appeals for the DC Circuit has stated, ‘‘several requirements imposed by the Single Convention would not be met if cannabis and cannabis resin were placed in CSA schedule III, IV, or V.’’ Id. Therefore, in accordance with section 811(d)(1), DEA must place marijuana in either schedule I or schedule II. Drug Enf’t Admin., Denial of Petition to Initiate Proceedings to Reschedule Marijuana, 81 Fed. Reg. 53,687, 53,689 (Aug. 12, 2016). 78 Convention on Psychotropic Substances, Feb. 21, 1971, 32 U.S.T. 543. 79 Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, Dec. 20, 1988, S. TREATY DOC. No. 101-4 (1989). Congressional Research Service R45164 · VERSION 6 · UPDATED 8 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis DEA,80 unless they are exempt.81 Registrations specify the extent to which the DEA has authorized registrants to manufacture, possess, distribute, or dispense controlled substances.82 The DEA currently regulates more than 1.73 million registrants.83 The CSA authorizes the DEA Administrator to charge reasonable fees relating to the registration and control of the manufacturing, distribution, and dispensing of controlled substances under the act.84 The CSA directs the DEA Administrator to register an applicant if the Administrator determines that, among other things, it would be consistent with the “public interest” to do so.85 The CSA provides several criteria that the DEA Administrator must consider in assessing whether registering an applicant is consistent with the “public interest.” The criteria differ depending on the substance involved and whether the applicant is a manufacturer, distributor, or practitioner, but include general factors such as those relating to public health and safety and compliance with state and local laws.86 Manufacturers and distributors of controlled substances must obtain a registration from the DEA annually, and those who dispense controlled substances must obtain registrations that may not be issued for less than one year or more than three years.87 The registration of an individual terminates when the person dies, ceases legal existence, or discontinues business or professional practice.88 A registration cannot be transferred to someone else unless the Administrator provides his express, written consent for such a transfer to occur.89 In some instances, applicants must apply for several separate registrations in order to comply with the CSA. For example, separate registrations are generally required for each principal place of business or professional practice where controlled substances are manufactured, distributed, 80 21 U.S.C. § 822(a). 81 Id. § 822(c) (agents of registrants, common carriers, and patients who lawfully possess controlled substances); 21 C.F.R. §§ 1301.23-1301.24 (certain military personnel, and law enforcement officials). These exemptions are discussed in further detail in the next section. 82 21 U.S.C. § 822(b). 83 U.S. Dep’t of Just., FY 2019 Budget and Performance Summary – Drug Enforcement Administration (DEA) 2, https://www.justice.gov/jmd/page/file/1033151/download (last visited Mar. 22, 2018). 84 21 U.S.C. § 821; see also 21 C.F.R. § 1301.13(e)(1) (chart detailing specific types of registrations and respective fees). The DEA is required to set these fees at a level that ensures the recovery of the full cost of conducting its controlled substance and chemical diversion control activities. 21 U.S.C. § 886a(1)(C). 85 Id. § 823(a). With respect to manufacturers of controlled substances in schedules I or II, the statute also requires the DEA Administrator to determine whether such registration is consistent with “United States obligations under international treaties, conventions, or protocols in effect on” May 1, 1971. Id. 86 Id. §§ 823(a)-(f). 87 Id. § 822(a). Registrants can seek to renew their registrations by submitting a renewal application to the DEA. U.S. DEP’T OF JUST., DEA, RENEWAL APPLICATION FOR REGISTRATION UNDER CONTROLLED SUBSTANCES ACT OF 1970, https://apps.deadiversion.usdoj.gov/webforms/jsp/regapps/common/renewalAppLogin.jsp (last visited Mar. 21, 2018). In the renewal process, registrants must report any criminal activity they have engaged in and any other changes to their professional or legal status that could impact their ability to handle controlled substances. U.S. DEP’T OF JUST., DEA FORM 224A, RENEWAL APPLICATION FOR REGISTRATION, § 4, https://www.reginfo.gov/public/do/DownloadDocument? objectID=9770701 (last visited Mar. 21, 2018). For example, a registrant must notify the DEA of any criminal convictions against the registrant in connection with controlled substances and any suspension, revocation, restriction, or denial of the registrant’s state license or registration relating to controlled substances. Id. See also U.S. GOV’T ACCOUNTABILITY OFF., GAO-16-310, DEA SHOULD TAKE ADDITIONAL ACTIONS TO REDUCE RISKS IN MONITORING THE CONTINUED ELIGIBILITY OF ITS REGISTRANTS 22 (2016) (“If the registrant does not self-report any liabilities and there are no changes to the information contained in the registrant’s record (such as changes to the registrant’s name, address, or state license number), then the renewal is automatically approved without further checks against state licensure websites.”). 88 21 C.F.R. § 1301.52(a). 89 Id. § 1301.52(b). Congressional Research Service R45164 · VERSION 6 · UPDATED 9 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis imported, exported, or dispensed.90 For example, a physician who is regularly engaged in dispensing controlled substances at one location must register to dispense controlled substances at other locations if he chooses to dispense controlled substances at these other locations.91 Exceptions to the Registration Requirement The CSA allows for exceptions and also exempts certain individuals from some or all of its regulatory requirements. For example, individuals exempted from registration requirements include, among others, officers or employees of the DEA, officers of the U.S. Customs Service, offers or employees of the FDA, and any other federal officers who are authorized to possess, import, or export controlled substances in the course of their official duties.92 Officers or employees of any state, or political subdivision of a state, who are engaged in enforcement of state or local laws relating to controlled substances, are also exempt from registering with the DEA.93 A person who has lawfully obtained, and who possesses, a controlled substance for his own legitimate medical use (a patient) is also not required to register.94 In addition, only those actually engaged in activities relating to manufacturing, distributing, and dispensing controlled substances are required to obtain registration, but related or affiliated persons who are not engaged in such activities are not required to register. For example, a stockholder or parent corporation of a corporation that manufactures controlled substances is not required to obtain registration, nor are employees of a registered manufacturer, distributor, or dispenser.95 The DEA Administrator may, by regulation, waive the registration requirement for certain manufacturers, distributors, or dispensers, if he finds it consistent with the public health and safety.96 Regulatory Obligations of Registrants Under the CSA The CSA imposes specific obligations on registrants in an effort to reduce the potential diversion of controlled substances out of legitimate distribution channels.97 In particular, the CSA imposes legal duties relating to (1) recordkeeping by registrants, (2) measures ensuring the secure storage of controlled substances handled by registrants, (3) reporting certain information to the DEA, (4) 90 21 U.S.C. § 822(e)(1); 21 C.F.R. § 1301.12. 91 See United States v. Clinical Leasing Serv., Inc., 925 F.2d 120, 122 (5 th Cir. 1991) (explaining that the “plain language” of 21 C.F.R. § 1301.12 requires that “a physician must be separately registered at each physical location in which he administers controlled substances as a regular part of his professional practice.”). 92 21 C.F.R. § 1301.24(a)(1). 93 Id. § 1301.24(a)(2). For additional registration exceptions, see id. §§ 1301.22-1301.23. 94 21 U.S.C. § 822(c). 95 21 C.F.R. § 1301.11(a); 21 U.S.C. § 822(c). 96 21 U.S.C. § 822(d). For example, in November 2014, the DEA published a rule that waived the requirement of registration for certain individuals who directly administer a particular diagnostic pharmaceutical that contains a radioactive component. Drug Enf’t Admin., Exemption From Registration for Persons Authorized Under U.S. Nuclear Regulatory Commission or Agreement State Medical Use Licenses or Permits and Administering the Drug Product DaTscan™, 79 Fed. Reg. 70,085 (Nov. 25, 2014). The DEA later removed this exemption after it had administratively removed the radioactive component from the schedules of controlled substances. Drug Enf’t Admin., Removal of Exemption From Registration for Persons Authorized Under U.S. Nuclear Regulatory Commission or Agreement, 81 Fed. Reg. 9,763 (Feb. 26, 2016). 97 Responding to the Prescription Drug Abuse Epidemic: Hearing Before the S. Caucus on Int’l Narcotics Control, 112th Cong. 4-5 (2012) (statement of Joseph T. Rannazzisi, DEA). Congressional Research Service R45164 · VERSION 6 · UPDATED 10 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis prescribing and dispensing controlled substance medications by registered doctors and pharmacists, and (5) the quantity of controlled substance that may be produced by manufacturers. Recordkeeping All registrants are required by the CSA to maintain complete and accurate inventories and records of all regulated transactions involving controlled substances and listed chemicals.98 For example, a registrant must make a complete and accurate record of each substance manufactured, received, sold, delivered, or otherwise disposed of by the registrant.99 Furthermore, inventories must be available for inspection by the DEA for at least two years.100 The CSA declares that it is unlawful for any person to “refuse or negligently fail to make, keep, or furnish any record, report, notification, declaration, order or order form, statement, invoice, or information required” by the CSA.101 It is also unlawful for any person knowingly or intentionally “to furnish false or fraudulent material information in, or omit any material information from, any application, report, record, or other document required to be made, kept, or filed” under the CSA.102 In certain circumstances, the CSA recordkeeping provisions do not apply. For example, the provisions do not apply to the prescribing or administering of a controlled substance listed in Schedules II-V by practitioners acting in the lawful course of their professional practice unless such substance is prescribed or administered in the course of maintenance or detoxification treatment of an individual.103 As discussed below, this has implications for the drugs typically used in the treatment of opioid addiction, two of which are controlled substances, while the other is not. Security Measures For the purposes of ensuring the secure storage and distribution of controlled substances and listed chemicals, all applicants for DEA registration and registrants must generally “provide effective controls and procedures to guard against theft and diversion of controlled substances.”104 DEA regulations also detail specific security requirements for different types of applicants and registrants. For example, nonpractitioners (i.e., manufacturers, distributors, and narcotic treatment programs) are required to store Schedule I and II substances in electronically monitored safes, steel cabinets, or vaults that meet or exceed certain specifications.105 Licensed practitioners must store controlled substances in a “securely locked, substantially constructed cabinet”106 and must notify the DEA of the theft or significant loss of any controlled substances within one business 98 21 U.S.C. § 827(a). 99 Id. § 827(a)(3); 21 C.F.R. § 1304.21(a). 100 21 U.S.C. § 827(b)(3); 21 C.F.R. § 1304.04(a). 101 21 U.S.C. § 842(a)(5). 102 Id. § 843(a)(4). 103 Id. §§ 827(c)(1)(A), 827(c)(1)(B). Thus, the prescribing or administering of methadone for the treatment of narcotic addiction must be in conformity with the CSA’s recordkeeping provisions. 104 21 C.F.R. § 1301.71 (general security requirements and standards for measuring compliance); see also 21 U.S.C. § 823 (requiring the DEA Administrator, when determining whether a registration is consistent with the public interest, to consider if the applicant or registrant has in place “effective controls against diversion.”). 105 See 21 C.F.R. §§ 1301.72(a)(1)(i)-(iii) (specifications required for safes and steel cabinets storing Schedule I and II drugs or substances); see also id. §§ 1301.72(a)(2) and 1301.72(a)(3)(i)-(vi) (specifications required for vaults storing Schedule I and II drugs or substances). 106 See id. § 1301.75 (physical security controls for practitioners). Congressional Research Service R45164 · VERSION 6 · UPDATED 11 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis day of discovering such loss or theft.107 Furthermore, all practitioners are prohibited from hiring employees who have been convicted of a drug-related felony or who have had a DEA registration denied or revoked.108 DEA regulations recommend that nonpractitioners carefully screen individuals before hiring them as employees, to ensure that job applicants do not have convictions for crimes or have not engaged in unauthorized use of controlled substances.109 Reporting The CSA requires manufacturers, distributors, and pharmacies to report periodically to the DEA every sale, delivery, disposal, or dispensing of any controlled substance.110 Registered pharmacies that are authorized to dispense controlled substances by means of the internet must also report to the DEA Administrator the type and total quantity of each controlled substance that the pharmacy has dispensed each month via the internet.111 In addition, the CSA requires manufacturers, distributors, and dispensers of controlled substances (1) to design and operate a system (that is compliant with applicable federal and state privacy laws) that will alert the registrant of suspicious orders of controlled substances, and (2) upon discovering a suspicious order or series of orders, to inform the DEA Administrator and the Special Agent in Charge of the DEA Field Division Office.112 The CSA defines “suspicious orders” as those that may include, but are not limited to, orders of unusual size, orders deviating substantially from a normal pattern, and orders of unusual frequency.113 Manufacturers and distributors of Schedule I and II drugs must file reports114 with the DEA through the Automated Reports and Consolidated Orders System (ARCOS),115 which is an automated drug reporting system that allows the agency to “monitor[] the flow of DEA controlled substances from their point of manufacture through commercial distribution channels to point of sale or distribution at the dispensing/retail level.... ”116 Certain narcotics listed in Schedules III and IV are also covered by the ARCOS reporting requirements.117 According to the DEA, U.S. attorneys and DEA investigators may use ARCOS controlled substances transaction information “to strengthen criminal cases in the courts.”118 107 Id. § 1301.76(b). 108 Id. § 1301.76(a). 109 Id. § 1301.90. 110 21 U.S.C. § 827(d). 111 Id. § 827(d)(2). However, pharmacies are exempt from such reporting requirement if they do not exceed in a given month either of two thresholds: (1) 100 or more prescriptions dispensed, or (2) 5,000 or more dosage units of all controlled substances combined. Id. 112 Id. § 832, as added by P.L. 115-271, § 3292(b). 113 21 U.S.C. § 802(57), as added by P.L. 115-271, § 3292(a). 114 21 C.F.R. §§ 1304.31 and 1304.32. 115 Id. § 1304.33. 116 Drug Enf’t Admin., Automation of Reports and Consolidated Orders System (ARCOS), https://www.deadiversion.usdoj.gov/arcos/index.html (last visited Apr. 4, 2018). 117 21 C.F.R. § 1304.33(d). 118 Drug Enf’t Admin., Automation of Reports and Consolidated Orders System (ARCOS), https://www.deadiversion.usdoj.gov/arcos/index.html (last visited Apr. 4, 2018). Congressional Research Service R45164 · VERSION 6 · UPDATED 12 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis Quotas The CSA includes a production quota system that requires the DEA to establish the total amount of each basic class of Schedule I and II controlled substances and certain listed chemicals119 that may be manufactured in a given calendar year, in order “to provide for the estimated medical, scientific, research, and industrial needs of the United States, for lawful export requirements, and for the establishment and maintenance of reserve stocks.”120 The DEA establishes this quota, referred to as the aggregate production quota (APQ), for approximately 200 Schedule I and II controlled substances.121 The DEA assigns individual production quotas to controlled substance manufacturers that prevent the APQ from being exceeded.122 The CSA allows a registrant to apply for an increase in his individual manufacturing quota if it is necessary “to meet his estimated disposal, inventory, and other requirements during the remainder of that year.”123 By regulation, the DEA Administrator must consider the following factors in making his APQ determinations: (1) the total disposal of the controlled substance during the current year and two preceding years; (2) trends in the national rate of new disposal of the controlled substance; (3) total inventories (actual or estimated) of “the class and all substances manufactured from the class [of controlled substances listed in Schedule I or II];” (4) projected demand for a particular controlled substance; (5) the extent of any diversion of the controlled substance in the class; (6) relevant information obtained from the Department of Health and Human Services and from the states; and (7) other relevant factors affecting the use of controlled substances including changes in the currently accepted medical use of a controlled substance, the economic and physical availability of the raw materials necessary to produce a controlled substance, and recent unforeseen emergencies (i.e., natural disasters).124 A registrant may not manufacture a Schedule I or II controlled substance or a specified listed chemical that is (1) not expressly authorized by his registration and by the individual quota assigned to him by the DEA, or (2) in excess of that quota.125 Prescription Requirements The CSA provides specific requirements that practitioners and pharmacists must observe when prescribing and dispensing controlled substances in Schedules II-V to patients for legitimate medical purposes.126 As noted, controlled substances classified as Schedule I drugs are deemed to have no accepted medical purpose in the United States, and thus they may only be used for research,127 and may not be prescribed or dispensed to patients.128 DEA regulations hold both the 119 These listed chemicals are ephedrine, pseudoephedrine, and phenylpropanolamine, which are ingredients commonly found in over-the-counter cold medicines that may be used in the production of methamphetamine and amphetamine. Drug Enf’t Admin., CMEA (Combat Methamphetamine Epidemic Act) Questions & Answers, https://www.deadiversion.usdoj.gov/meth/q_a_cmea.htm (last visited Apr. 10, 2018). 120 21 U.S.C. § 826(a)(1). 121 Improving Management of the Controlled Substances Quota Process, Hearing Before the S. Caucus on Int’l Narcotics Control, 114th Cong. 3 (2015) (statement of Joseph T. Rannazzisi, DEA). 122 21 U.S.C. § 826(b). 123 See id. § 826(e). 124 21 C.F.R. §§ 1303.11(b)(1)-(7). 125 21 U.S.C. §§ 842(b). 126 Id. § 829. 127 Id. § 823(f). 128 Id. § 812(b)(1). Congressional Research Service R45164 · VERSION 6 · UPDATED 13 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis prescribing practitioner and the pharmacist who fills the prescription responsible for ensuring that the controlled substance is properly prescribed and dispensed.129 A DEA manual prepared for pharmacists to help them understand their obligations under the CSA explains that A pharmacist is required to exercise sound professional judgment when making a determination about the legitimacy of a controlled substance prescription. Such a determination is made before the prescription is dispensed. The law does not require a pharmacist to dispense a prescription of doubtful, questionable, or suspicious origin. To the contrary, the pharmacist who deliberately ignores a questionable prescription when there is reason to believe it was not issued for a legitimate medical purpose may be prosecuted along with the issuing practitioner, for knowingly and intentionally distributing controlled substances.130 Practitioners Under the CSA, only licensed medical practitioners are authorized to prescribe controlled substances listed in Schedules II-V to patients.131 A prescription for a controlled substance must be “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.”132 A pharmacist may not dispense to a patient a Schedule II controlled substance without a written prescription133 from a practitioner, except in certain cases where the practitioner administers the controlled substance directly to the patient.134 However, in the case of an “emergency situation,”135 a practitioner may orally authorize a pharmacist to fill a prescription for a Schedule II controlled substance.136 Controlled substances in Schedules III-V may be dispensed by a pharmacy pursuant to either a written or oral prescription, including a facsimile of a written prescription.137 These substances may also be administered or dispensed directly by the practitioner in the course of his professional practice without a prescription.138 Practitioners are permitted to sign and transmit electronic prescriptions for controlled substances, 129 21 C.F.R. § 1306.04(a) (“The responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner, but a corresponding responsibility rests with the pharmacist who fills the prescription.”). 130 DRUG ENF’T ADMIN., PHARMACIST’S MANUAL 30 (2010). See also Drug Enf’t Admin., A Pharmacist’s Guide to Prescription Fraud, https://www.deadiversion.usdoj.gov/pubs/brochures/pharmguide.htm (last visited Dec. 12, 2018) (“The dispensing pharmacist must maintain constant vigilance against forged or altered prescriptions. The law holds the pharmacist responsible for knowingly dispensing a prescription that was not issued in the usual course of professional treatment.”). 131 See 21 C.F.R. § 1306.03 (persons entitled to issue prescriptions). 132 Id. § 1306.04(a)(1); United States v. Moore, 423 U.S. 122, 124 (1975) (holding that “registered physicians can be prosecuted” under 21 U.S.C. § 841 “when their activities fall outside the usual course of professional practice.”). 133 21 U.S.C. § 829(a); see also 21 C.F.R. § 1306.05 (manner of issuance of prescriptions for Schedule II controlled substances). 134 21 U.S.C. § 829(a); see also 21 C.F.R. § 1306.11(b) (authorizing individual practitioners to administer or dispense controlled substances directly to patients without prescription). 135 21 C.F.R. § 290.10 defines an “emergency situation” as a situation in which the prescribing practitioner finds that (1) “immediate administration of the controlled substance is necessary” to treat the patient properly, (2) “no appropriate alternative treatment is available,” including the use of a drug that is not a Schedule II controlled substance, and (3) “it is not reasonably possible for the prescribing practitioner to provide a written prescription to be presented to the person dispensing the substance, prior to the dispensing.” 136 21 U.S.C. § 829(a); 21 C.F.R. § 1306.11(d). 137 21 U.S.C. § 829(b). If the prescription is made orally, the pharmacist must promptly reduce to writing all of the information required to be in a prescription under 21 C.F.R. § 1306.05, except for the signature of the practitioner. Id. § 1306.21(a). 138 21 U.S.C. § 829(b); 21 C.F.R. § 1306.21(b). Congressional Research Service R45164 · VERSION 6 · UPDATED 14 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis assuming that the electronic prescription complies with detailed requirements set forth in the applicable federal regulations.139 Pharmacists Pharmacists may partially fill a prescription for Schedule II substances under certain circumstances, such as pursuant to a request by the patient or the practitioner who wrote the prescription.140 Pharmacists are prohibited from refilling prescriptions for Schedule II substances.141 A pharmacist may fill or refill prescriptions for controlled substances in Schedules III and IV, however, up to five times within six months after the date on which the prescription was issued, unless the prescribing practitioner authorizes a renewal of the prescription.142 A pharmacy may process electronic prescriptions for controlled substances if the pharmacy uses a computer application that complies with several requirements specified in the applicable federal regulations.143 A controlled substance that is a prescription drug may not be delivered, distributed, or dispensed by means of the internet without a “valid prescription,”144 which the CSA defines as a prescription that is issued for a legitimate medical purpose in the usual course of professional practice by a practitioner who has conducted at least one medical evaluation of the patient in the physical presence of the practitioner.145 What Are the Potential Consequences for Violating the CSA? The CSA contains a variety of criminal sanctions for illicit possession, manufacture, and distribution of controlled substances that occurs outside the closed system of distribution.146 For example, the CSA outlaws “simple possession” of a controlled substance147 (referring to a person knowingly or intentionally possessing a controlled substance) “unless such substance was obtained directly, or pursuant to” a valid prescription issued by a medical practitioner, “or except as otherwise authorized by” the CSA.148 The CSA also prohibits any person from knowingly or 139 Drug Enf’t Admin., Electronic Prescriptions for Controlled Substances, 75 Fed. Reg. 16,235, 16,307 (Mar. 31, 2010). 140 21 U.S.C. § 829(f). 141 Id. § 829(a) (“No prescription for a controlled substance in schedule II may be refilled.”). 142 Id. 829(b); 21 C.F.R. § 1306.22(a). 143 21 C.F.R. § 1311.205. The requirements include providing the pharmacy with the ability to sign digitally and archive the controlled substance prescriptions and allowing the pharmacy to limit employee access for annotating, altering, or deleting controlled substance prescription information. Id. 144 21 U.S.C. § 829(e). 145 Id. 146 Many of these criminal penalties appear in 21 U.S.C. § 841, which provides that “[e]xcept as authorized by” the CSA, “it shall be unlawful for any person knowingly or intentionally” to commit the unlawful acts specified in § 841(a). 147 Generally speaking, the CSA’s simple possession statute is used to prosecute those found in possession of quantities of controlled substances that are consistent with “personal use” amounts and when the evidence suggests that the possession is for the purpose of personal use, rather than for resale or distribution. See United States v. Mack, 343 F.3d 929, 934 (8th Cir. 2003) (“We frequently rely on drug quantity as evidence of defendants’ intended purpose for disposition of their drugs, i.e. personal use or sale.”). 148 21 U.S.C. § 844(a). With the exception of simple possession of flunitrazepam (commonly used as a “date rape” drug), a first-time simple possession offense is a federal misdemeanor punishable by a maximum term of imprisonment of 1 year. (Simple possession of flunitrazepam is punishable by a term of imprisonment of up to 3 years). Anyone who commits a federal simple possession offense after a single prior conviction under federal or state drug laws is subject to a mandatory minimum sentence of 15 days and up to 2 years in prison; those who have multiple prior drug offense Congressional Research Service R45164 · VERSION 6 · UPDATED 15 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis intentionally acquiring or obtaining possession of a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge.149 It is unlawful for any person knowingly or intentionally to “traffic” in controlled substances; illegal drug trafficking150 generally refers to distributing or dispensing, or to possessing with intent to distribute or dispense, a controlled substance, unless the particular activity is authorized by law.151 The CSA’s criminal penalties for trafficking in controlled substances vary depending on whether the individual is a first-time offender or a repeat offender, the type of substance involved, and the quantity of the type of substance involved.152 For example, a federal drug trafficking offense committed by a first-time offender involving a Schedule II substance such as codeine is punishable by a term of imprisonment of up to 20 years and a fine of up to $1,000,000.153 For a second offense, the fine increases to $2,000,000 and the maximum imprisonment term increases to 30 years.154 The focus of this report, however, is on the CSA penalty provisions specifically applicable to persons registered with the DEA. The CSA sets forth certain “regulatory” offenses involving listed chemicals,155 failure to comply with CSA requirements and obligations that registrants must satisfy as a condition of registration,156 and other prohibited acts by registrants who manufacture, distribute and dispense controlled substances.157 For example, a registrant authorized to distribute or dispense any controlled substance is prohibited from distributing, dispensing, or manufacturing controlled substances in a manner that is not authorized by his particular registration.158 As noted above, registrants may not refuse or negligently fail to maintain accurate records of controlled substances, and may not refuse to convictions face a mandatory minimum sentence of 90 days and up to 3 years in prison. Id. 149 Id. § 843(a)(3). A violation of this may result in a term of imprisonment of not more than four years or a fine of up to $250,000, or both; second offenses involving this section increase the maximum imprisonment term to eight years. Id. § 843(d)(1). 150 The CSA and its implementing regulations do not define the term “traffic” or “trafficking,” though the CSA does expressly use the term “drug traffickers” in one provision, 21 U.S.C. § 862, and the term “traffic” in three other sections, id. §§ 801, 801a, 873. The U.S. Sentencing Guidelines, which greatly influence the sentences that federal judges impose on those convicted of federal crimes, defines a “drug trafficking offense” as “an offense under federal, state, or local law that prohibits the manufacture, import, export, distribution, or dispensing of, or offer to sell a controlled substance (or a counterfeit substance) or the possession of a controlled substance (or a counterfeit substance) with intent to manufacture, import, export, distribute, or dispense.” U.S.S.G. § 2L1.2, Application Notes (2). For more information about the Sentencing Guidelines, see CRS Report R41696, How the Federal Sentencing Guidelines Work: An Overview, by (name redacted) . 151 21 U.S.C. § 841(a)(1). 152 For a listing of the CSA’s criminal provisions regarding unauthorized trafficking, possession, or other prohibited activities involving controlled substances, see CRS Report RL30722, Drug Offenses: Maximum Fines and Terms of Imprisonment for Violation of the Federal Controlled Substances Act and Related Laws, by (name redacted) . 153 21 U.S.C. § 841(b)(1)(C). These penalties apply only if no death or serious bodily injury results from the use of such unlawfully trafficked substance. If such health consequences occur, however, the authorized penalty is a mandatory minimum sentence of 20 years and up to life in prison. Id. 154 Id. If death or serious bodily injury results from the use of such substance that has been trafficked by a repeat offender, the authorized penalty is a mandatory minimum sentence of life in prison. Id. 155 Id. § 841(c); (e)-(f). 156 Id. §§ 842, 843. 157 Id. § 843. 158 Id. § 842(a)(2). As noted above, registrations specify the extent to which the DEA has authorized registrants to manufacture, possess, distribute, or dispense controlled substances. Thus, for example, a pharmacist is authorized to dispense controlled substances to individuals only pursuant to a valid prescription issued by a DEA-licensed practitioner and may not dispense such substances without that prescription. Congressional Research Service R45164 · VERSION 6 · UPDATED 16 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis furnish such records when required to do so by law enforcement officials159 (such as the requirement that registrants report to the DEA any “suspicious orders of controlled substances).”160 It is unlawful for registrants to prohibit law enforcement officials from entering their premises for inspections authorized by the CSA.161 Similarly, practitioners and pharmacists may not dispense or distribute a controlled substance drug in violation of the CSA’s statutory prescription requirements.162 The CSA also proscribes certain acts committed by a registrant related to the manufacture and distribution of controlled substances and listed chemicals. Registrants may not knowingly or intentionally (1) distribute Schedule I and II substances without a valid order form;163 (2) use an invalid registration number during the course of handling or acquiring controlled substances;164 (3) furnish false or fraudulent material information in a record or report required by the act;165 or (4) present false or fraudulent identification when receiving a listed chemical.166 Registrants who violate the aforementioned provisions may be subject to injunctive or declarative actions filed by the Attorney General in federal district court in addition to the general penalties described in the next paragraph.167 Manufacturers may also not produce Schedule I or II controlled substances or specified listed chemicals that are not expressly authorized by their registration or in excess of the individual production quotas assigned to them by the DEA.168 Registrants who fail to adhere to the CSA’s regulatory requirements or who engage in certain prohibited acts may face administrative consequences, civil and criminal fines, and even the possibility of imprisonment.169 The CSA provides that violations of its regulatory requirements generally do not constitute a crime and that “imposition of a civil penalty ... shall not give rise to any disability or legal disadvantage based on conviction for a criminal offense,”170 unless the violation was committed knowingly, in which case the CSA authorizes imprisonment of up to one or two years.171 State Regulation of Controlled Substances In addition to federal oversight of controlled substances and registrants who handle them, Congress has permitted state governments to regulate the use of controlled substances under their own state controlled substances acts.172 The U.S. Supreme Court has stated that the CSA 159 Id. § 842(a)(5). 160 Id. § 832, as added by P.L. 115-271, § 3292(b). 161 21 U.S.C. § 842(a)(6). 162 Id. § 842(a)(1). 163 Id. § 843(a)(1). 164 Id. § 843(a)(2). 165 Id. § 843(a)(4)(A). 166 Id. § 843(a)(4)(B). 167 Id. § 843(f). 168 Id. §§ 842(b). 169 Id. § 842(c) (providing penalties for committing prohibited acts set forth in id. § 842(a)); Id. § 843(d) (penalties for committing prohibited acts set forth in id. § 843(a)). 170 Id. § 842(c)(3). 171 Id. § 842(c)(2). 172 Id. § 903 (“No provision of this title shall be construed as indicating an intent on the part of the Congress to occupy the field in which that provision operates, including criminal penalties, to the exclusion of any State law on the same subject matter which would otherwise be within the authority of the State.... ”). Congressional Research Service R45164 · VERSION 6 · UPDATED 17 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis “manifests no intent to regulate the practice of medicine generally” and has observed that its “structure and operation ... presume and rely upon a functioning medical profession regulated under the States’ police powers”173 that may be used “to protect the health, safety and welfare of their citizens.”174 For example, all states have prescription drug monitoring programs (PDMPs) that maintain statewide electronic databases of prescription controlled substances dispensed to patients within their jurisdictions; such information may be used by those working in law enforcement, professional licensing bodies, and health care to identify patterns of prescribing, dispensing, or receiving controlled substances that could indicate abuse or diversion.175 States may also subject certain controlled substance medications to stricter regulation than the CSA requires. For example, the states of Oregon176 and Mississippi177 have passed laws that require anyone to obtain a prescription for drugs containing pseudoephedrine (a nasal decongestant commonly found in over-the-counter cold, allergy, and sinus medications), which is an important ingredient in producing illicit methamphetamine,178 whereas the substance is regulated as a listed chemical under the CSA that does not require a prescription to dispense.179 The operation of several provisions of the CSA depends on state laws and state regulatory bodies. For example, if a physician wants to obtain a DEA registration to dispense controlled substance medications, he must first be “authorized to dispense ... controlled substances under the laws of the State in which he practices.”180 In addition, the DEA Administrator must be satisfied that issuing the applicant a registration would be “[]consistent with the public interest,” a determination that requires the DEA Administrator to consider several statutory factors, including the “recommendation of the appropriate State licensing board or professional disciplinary authority”; the applicant’s previous convictions for federal or state controlled substances offenses; and the applicant’s “[c]ompliance with applicable State, Federal, or local laws relating to controlled substances.”181 Despite the latitude that Congress has given to states to regulate controlled substances, however, the CSA nevertheless generally preempts, or overrides, state laws regarding controlled substances when “there is a positive conflict between” a CSA provision and “that State law so that the two cannot consistently stand together.”182 DEA’s Legal Authorities for Enforcing the CSA The DEA’s Office of Diversion Control is responsible for preventing, detecting, and investigating violations of the CSA involving controlled pharmaceuticals183 while also “ensuring an adequate 173 Gonzales v. Oregon, 546 U.S. 243, 270 (2006). 174 Gonzales v. Raich, 545 U.S. 1, 66 (2005) (O’Connor, J., dissenting). 175 For more information about PDMPs, see CRS Report R42593, Prescription Drug Monitoring Programs, by (name re dacted), (name redacted), and (name redacted) . 176 Or. Rev. Stat. Ann. § 475.973 (2018) (scheduling pseudoephedrine as a Schedule III substance under Oregon law). 177 Miss. Code Ann. § 41-29-117(d) (2017) (scheduling pseudoephedrine as a Schedule III substance under Mississippi law). 178 Drug Enf’t Admin., Implementation of the Methamphetamine Production Prevention Act of 2008, 76 Fed. Reg. 74,696 (Dec. 1, 2011). 179 21 U.S.C. § 830. 180 Id. § 823(f). 181 Id. 182 Id. § 903. 183 Id. §§ 878(a), 880. Congressional Research Service R45164 · VERSION 6 · UPDATED 18 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis and uninterrupted supply for legitimate medical, commercial, and scientific needs.”184 The Office of Diversion Control also manages the regulation of registrants, promulgates regulations concerning the handling of controlled substances, and establishes controlled substance production quotas.185 The Assistant Attorney General for the DOJ’s Criminal Division conducts, handles, or supervises all criminal and civil litigation to enforce the CSA.186 Several federal courts have held that the CSA does not contain an express or implied cause of action provision under which private parties or state,187 local, or tribal governments may sue registrants for noncompliance with their CSA obligations,188 noting instead that the CSA expressly authorizes only the Attorney General and the U.S. Department of Justice to enforce federal controlled substances laws.189 Investigations The DEA can conduct a variety of investigations to monitor and ensure registrant compliance with the CSA and its implementing regulations.190 As mentioned earlier, registrants may not prevent law enforcement officials from entering their premises for any inspections authorized by the CSA.191 The three types of investigations that the DEA may undertake can be classified as regulatory, complaint, and criminal.192 Regulatory investigations can include scheduled inspections of registrants, usually every two, three, or five years, although such inspections generally are directed at manufacturers, wholesale distributors, and importers/exporters rather than physicians and pharmacies (who receive such oversight from state regulators).193 The DEA 184 Drug Enf’t Admin., DEA Programs: Diversion Control / Prescription Drug Abuse, https://www.dea.gov/ops/ diversion.shtml (last visited Mar. 26, 2018). 185 U.S. GOV’T ACCOUNTABILITY OFF., GAO-15-471, MORE DEA INFORMATION ABOUT REGISTRANTS’ CONTROLLED SUBSTANCES ROLES COULD IMPROVE THEIR UNDERSTANDING AND HELP ENSURE ACCESS 10 (2015). 186 28 C.F.R. § 0.55(c). 187 The CSA does, however, include a limited provision authorizing a state to bring a civil action in federal court on behalf of its residents to enforce CSA provisions relating to internet pharmacies and unlawful dispensing of controlled substances by means of the internet. 21 U.S.C. § 882(c). 188 See, e.g., McKesson Corp. v. Hembree, No. 17-CV-323-TCK-FHM, 2018 WL 340042, at *5 (N.D. Okla. Jan. 9, 2018) (“The CSA does not provide a private right of action. Instead, it delegates the power of enforcement of federal drug policy to the federal government.”) (citations omitted); Smith v. Hickenlooper, 164 F. Supp. 3d 1286, 1292 (D. Colo. 2016), aff’d sub nom. Safe Streets All. v. Hickenlooper, 859 F.3d 865 (10th Cir. 2017) (“[T]here is nothing in the CSA which expressly permits private enforcement of the Act’s provisions. I also find ... that the CSA implicitly precludes private enforcement, and that Plaintiffs may not, by invoking the court’s equitable powers, circumvent Congress’s exclusion of private enforcement.”) (quotations and citations omitted); Shmatko v. Arizona CVS Stores LLC, No. CV-14-01076-PHX-DGC, 2014 WL 3809092, at *2 (D. Ariz. Aug. 1, 2014) (“Federal law unequivocally holds ... that the ... CSA do[es] not create private rights of action that can give rise to a federal question.”); Schneller ex rel. Schneller v. Crozer Chester Med. Ctr., 387 F. App’x 289, 293 (3d Cir. 2010) (“The Comprehensive Drug Abuse Prevention and Control Act is a statute enforceable only by the Attorney General and, by delegation, the Department of Justice.”); Bowling v. Haas, No. CIV.A. 3:07-032-KKC, 2010 WL 3825467, at *3 (E.D. Ky. Sept. 23, 2010) ([“[C]ourts have uniformly held that the right to enforce the provisions of the CSA ... is possessed exclusively by the Attorney General ... and that no right of action, either expressed or implied, exists in favor of a private litigant.”); Ringo v. Lombardi, No. 09-4095-CV-C-NKL, 2010 WL 3310240, at *2 (W.D. Mo. Aug. 19, 2010) (“Consideration of the text of the CSA in its entirety indicates that Congress did not expressly provide a private right of action and did not intend to imply a private right of action.”). 189 21 U.S.C. §§ 871(a), (b); 883. 190 Id. § 822(f); 21 C.F.R. § 1301.31. 191 21 U.S.C. § 842(a)(6). 192 See U.S. GOV’T ACCOUNTABILITY OFF., GAO-15-471, MORE DEA INFORMATION ABOUT REGISTRANTS’ CONTROLLED SUBSTANCES ROLES COULD IMPROVE THEIR UNDERSTANDING AND HELP ENSURE ACCESS 11-12 (2015). 193 Id. Congressional Research Service R45164 · VERSION 6 · UPDATED 19 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis may initiate complaint investigations after it has received a tip about potential diversion by the registrant or if the DEA has identified any unusual drug transactions involving the registrant.194 Finally, the DEA may conduct criminal investigations regarding potential criminal activities involving diversion of controlled substances.195 Criminal investigations can be directed at either registrants or nonregistrants, such as an individual suspected of stealing drugs from a pharmacy or one who is trafficking in unlawfully obtained controlled substances.196 Following an investigation of a registrant that reveals violations of the CSA and its implementing regulations, the DEA can take certain enforcement actions, as discussed in the following section. Enforcement Actions The DEA has discretion197 to initiate enforcement actions to seek a variety of administrative, civil, and criminal penalties against a registrant who is not in compliance with the CSA, depending on the severity of the offense and taking into consideration factors such as whether the registrant has previously violated a CSA regulatory requirement.198 This section focuses on the administrative actions that the DEA may take against a registrant or an applicant for registration. Letter of Admonition or Informal Hearing A noncompliant registrant could face several types of corrective actions. For example, the DEA can issue a warning letter referred to as a Letter of Admonition (LOA) to a registrant suspected of conduct inconsistent with his obligations under the CSA and its implementing regulations.199 The DEA can also hold an Informal Hearing (IH) concerning the registrant; either administrative action “provide[s] registrants an opportunity to recognize and acknowledge their infractions, and immediately correct them.”200 Administrative Proceedings to Deny, Revoke, or Suspend a Registration The DEA Administrator has the authority to deny, revoke, or suspend registrations under certain circumstances.201 However, before the DEA Administrator can take such an action, the agency must generally provide the applicant or registrant with notice and an opportunity to demonstrate why the registration should not be denied, revoked, or suspended.202 This notice is referred to as 194 Id. at 12. 195 Id. 196 Id. 197 See Improving Predictability and Transparency in DEA and FDA Regulation: Hearing Before the H. Comm. on Energy & Commerce, Subcomm. on Health, 113th Congress 6 (2014) (statement of Joseph T. Rannazzisi, DEA) (“The decision to take administrative, civil, and/or criminal action against a DEA registrant rests with the DEA and the prosecuting U.S. Attorneys.”). 198 U.S. GOV’T ACCOUNTABILITY OFF., GAO-15-471, MORE DEA INFORMATION ABOUT REGISTRANTS’ CONTROLLED SUBSTANCES ROLES COULD IMPROVE THEIR UNDERSTANDING AND HELP ENSURE ACCESS 12-13 (2015) 199 Improving Predictability and Transparency in DEA and FDA Regulation: Hearing Before the H. Comm. on Energy & Commerce, Subcomm. on Health, 113th Congress 6 (2014) (statement of Joseph T. Rannazzisi, DEA). 200 Id. 201 21 U.S.C. § 824(a). 202 Id. § 824(c). 21 U.S.C. § 824(a) states in pertinent part: “A registration pursuant to section 823 of this title to manufacture, distribute, or dispense a controlled substance or a list I chemical may be suspended or revoked by the [Administrator] upon a finding that the registrant— (1) has materially falsified any application filed pursuant to or required by this subchapter or subchapter II of this Congressional Research Service R45164 · VERSION 6 · UPDATED 20 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis an Order to Show Cause or OTSC.203 Such an order provides the basis for the proposed denial, revocation, or suspension (including an identification of the laws or regulations that the applicant or registrant is alleged to have violated)204 and also notifies the applicant or registrant of the opportunity to submit to the DEA a corrective action plan (CAP).205 The OTSC instructs the applicant or registrant to appear at a hearing before a DEA Administrative Law Judge (ALJ) that must be conducted in accordance with the Administrative Procedure Act (APA).206 If the registrant submits a CAP, the DEA Administrator is required to determine “whether denial, revocation, or suspension proceedings should be discontinued.”207 After examining the evidence and arguments submitted by the parties, the ALJ is required to submit a report to the DEA Administrator that explains his recommended ruling, findings of fact, conclusions of law, and decision regarding the proposed denial, revocation, or suspension.208 “As soon as practicable after” receiving the ALJ’s record and report,209 the DEA Administrator is required to publish in the Federal Register a final order in the proceeding that adopts, modifies, or rejects the ALJ’s recommended decision.210 The CSA also provides that if the DEA Administrator suspends or revokes an existing registration, all controlled substances owned or possessed by the registrant may “be placed under seal ... until the time for taking an appeal has elapsed or until all appeals have been concluded.... ”211 Once a revocation order becomes final chapter; (2) has been convicted of a felony under this subchapter or subchapter II of this chapter or any other law of the United States, or of any State, relating to any substance defined in this subchapter as a controlled substance or a list I chemical; (3) has had his State license or registration suspended, revoked, or denied by competent State authority and is no longer authorized by State law to engage in the manufacturing, distribution, or dispensing of controlled substances or list I chemicals or has had the suspension, revocation, or denial recommended by competent State authority; (4) has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section; or (5) has been excluded (or directed to be excluded) from participation in a program pursuant to section 1320a— 7(a) of [the Social Security Act, which excludes certain individuals and entities from participation in Medicare and State healthcare programs].... ” 203 Id. § 824(c)(1). 204 Id. § 824(c)(2)(A); 21 C.F.R. § 1301.37(c). 205 21 U.S.C. § 824(c)(2)(C). Generally, a CAP is a document that describes corrective actions that the registrant or applicant has taken or proposes to take to address any CSA compliance issues identified by the DEA in the OTSC. Oversight of the Ensuring Patient Access and Effective Drug Enforcement Act: Hearing Before the S. Judiciary Comm., 115th Cong. 7-8 (2017) (statement of Demetra Ashley, DEA). 206 21 U.S.C. § 824(c)(4) (requiring that the proceedings be conducted in accordance with “subchapter II of chapter 5 of title 5, United States Code”). The standard of proof used in these administrative proceedings is “preponderance of the evidence.” See, e.g., Sea Island Broad. Corp. v. FCC, 627 F.2d 240, 243 (D.C. Cir. 1980) (“The use of the ‘preponderance of evidence’ standard is the traditional standard in civil and administrative proceedings. It is the one contemplated by the APA, 5 U. S. C. § 556 (d).”); Collins Sec. Corp. v. SEC, 562 F.2d 820, 823 (D.C. Cir. 1977) (“The traditional standard of proof in a civil or administrative proceeding is the preponderance standard.... ”). 207 21 U.S.C. § 824(c)(3). 208 21 C.F.R. § 1316.65. 209 Id. § 1316.67. 210 John J. Mulrooney, II & Andrew J. Hull, Drug Diversion Administrative Revocation and Application Hearings for Medical and Pharmacy Practitioners: A Primer for Navigating Murky, Drug-Infested Waters, 78 ALB. L. REV. 327, 394 (2014/2015). In issuing this final order, the DEA Administrator should consider the ALJ’s recommended decision and factual findings, see Morall v. DEA, 412 F.3d 165, 179 (D.C. Cir. 2005) (explaining that although the “DEA is the ultimate fact finder, the agency’s decision is vulnerable when it does not take the ALJ’s findings into consideration.”). 211 21 U.S.C. § 824(f). Congressional Research Service R45164 · VERSION 6 · UPDATED 21 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis (meaning all judicial appeals have been exhausted), these controlled substances “shall be forfeited to the United States” and “[a]ll right, title, and interest in such controlled substances ... shall vest in the United States.... ”212 Immediate Suspension Orders Simultaneously with the institution of administrative proceedings to revoke or suspend a registration (or at any time after the DEA Administrator issues an OTSC notifying the registrant that the DEA is taking action to revoke or suspend a registration),213 the DEA Administrator may exercise emergency power to suspend immediately any existing registration for a limited time period in order to avoid “an imminent danger to the public health or safety.”214 This agency action is often referred to as an “immediate suspension order” (ISO), and does not require the DEA to provide the registrant with prior notice or a formal hearing.215 The CSA specifies that the suspension “shall continue in effect until the conclusion of [the] proceedings [to revoke or suspend the registration on a final basis], including judicial review thereof, unless sooner withdrawn by the Attorney General or dissolved by a court of competent jurisdiction.”216 Prior to the enactment into law of the Ensuring Patient Access and Effective Drug Enforcement Act (EPAEDEA) of 2016,217 the CSA did not expressly define the phrase “imminent danger to the public health or safety,” and, as a result, courts held that the DEA Administrator possessed “significant discretion” to determine when the continued registration of a registrant constituted such a threat.218 As an example of the latitude that courts afforded the DEA Administrator’s 212 Id. See also 21 C.F.R. § 1301.36(f) (“[U]pon service of the order of the Administrator revoking or suspending registration, the registrant shall, as instructed by the Administrator: (1) Deliver all controlled substances in his/her possession to the nearest office of the Administration or to authorized agents of the Administration; or (2) Place all controlled substances in his/her possession under seal ... ”). 213 Id. § 1301.36(e). 214 21 U.S.C. § 824(d)(1). 215 Id. § 824(d). 216 Id. § 824(d)(1). 217 Ensuring Patient Access and Effective Drug Enforcement Act of 2016, P.L. 114-145, 130 Stat. 353 (codified at 21 U.S.C. §§ 823, 824). 218 In re Burka, 684 F. Supp. 1300, 1305 (E.D. Pa. 1988) (stating that “Congress has granted the DEA Administrator significant discretion in making the preliminary determination of whether a registration should be temporarily suspended.... ”); see also Holiday CVS, LLC v. Holder, 839 F. Supp. 2d 145, 164 (D.D.C. 2012), vacated as moot, 493 F. App’x 108 (D.C. Cir. 2012) (noting that “the CSA vests the Administrator with the authority to” determine whether imminent danger exists); Cardinal Health, Inc. v. Holder, 846 F. Supp. 2d 203, 225 (D.D.C. 2012) (“Far from providing ‘precise guidelines’ that restrict the meaning of ‘imminent danger,’ the Act vests the Administrator with discretion to make such a determination. In addition, the statute contemplates that an ISO will be issued in emergency circumstances, prior to an administrative hearing or the development of a formal evidentiary record. Thus, given the degree of discretion vested with the Administrator as well as the summary and urgent nature of an ISO, the Court’s review ‘must be correspondingly relaxed.’”) (citation omitted). However, in at least two cases prior to enactment of the 2016 EPAEDEA, courts did reject DEA’s ISO determination that the alleged violations met the “imminent danger” standard. See, e.g., Bates Drug Stores v. Holder, Case No. CV–11–0167–EFS, 2011 WL 1750066 *3 (E.D. Wash. 2011) (“[T]he Court has serious doubts that the alleged violations ... pose an imminent danger to public health and safety. There is nothing in the record indicating that any Bates patient has been harmed or injured by the alleged violations. Nor is there any evidence that any controlled substance was dispensed to an improper individual, for an improper purpose, or in an improper dosage.... On this record, the Court finds that serious questions exist as to whether the Suspension Order supports a finding that Bates’ practices posed an imminent danger to the public health and safety.”); see also Norman Bridge Drug Co. v. Banner, 529 F.2d 822, 826, 829 (5 th Cir. 1976) (holding that the lower court’s decision that there was no imminent danger to the public health and safety was not clearly erroneous due to, among other things, the DEA being aware of the facts alleged to justify issuance of the ISO for seven months prior to issuing the order). Congressional Research Service R45164 · VERSION 6 · UPDATED 22 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis imminent danger finding, a federal district court permitted the DEA to rely on pharmacy controlled substances sales data from 2008 to support an ISO issued in early 2012.219 The EPAEDEA amended the CSA to provide, for the first time, a statutory definition of the phrase “imminent danger to the public health or safety,” which limits the DEA Administrator’s discretion to issue an ISO and creates new evidentiary requirements that he must satisfy before issuing such an order.220 Under the EPAEDEA, the DEA’s authority to issue an ISO depends on the agency’s ability to prove two things: (1) “an immediate threat that death, serious bodily harm, or abuse of a controlled substance will occur” due to the failure of the registrant to comply with the CSA’s requirements, including those obligating the registrant “to maintain effective controls against diversion,”221 and (2) the probability that such a threat will occur without an immediate suspension of a registration, which the statute requires to be a “substantial likelihood.”222 Some have suggested that the legislative changes made by the EPAEDEA considerably weaken the power of the DEA to issue an ISO against a distributor or manufacturer,223 although others have argued that the addition of a statutory definition of “imminent danger to the public health or safety” was necessary in order to prevent “a completely subjective determination made solely by the DEA” that “summarily eliminate[s] the registrant’s ability to handle controlled substances before any due process hearing.”224 In response to the ISO, a registrant could seek immediate judicial review of the ISO in federal court,225 arguing that the DEA acted arbitrarily and capriciously226 in violation of the APA.227 However, a registrant faces a difficult burden in convincing a court to enjoin the DEA’s enforcement of the ISO pending resolution of the revocation or suspension proceedings.228 In 219 Holiday CVS, 839 F. Supp. 2d at 164 (stating that “the DEA could reasonably rely on sales trends from past years to show a pattern of inadequate anti-diversion efforts, which ultimately culminated in the need for immediate suspension in February 2012.”). 220 P.L. 114-145, 130 Stat. 354 (codified at 21 U.S.C. § 824(d)(2)). 221 21 U.S.C. § 824(d)(2). 222 Id. 223 See John J. Mulrooney, II & Katherine E. Legal, Current Navigation Points in Drug Diversion Law: Hidden Rocks in Shallow, Murky, Drug-Infested Waters, 101 MARQ. L. REV. 333, 347 (Winter 2017) (“If it had been the intent of Congress to completely eliminate the DEA’s ability to ever impose an immediate suspension on distributors or manufacturers, it would be difficult to conceive of a more effective vehicle for achieving that goal.”); see also Scott Higham & Lenny Bernstein, The Drug Industry’s Triumph Over the DEA, WASH. POST, Oct. 15, 2017, at A01 (“In April 2016, at the height of the deadliest drug epidemic in U.S. history, Congress effectively stripped the Drug Enforcement Administration of its most potent weapon against large drug companies suspected of spilling prescription narcotics onto the nation’s streets.”). 224 Oversight of the Ensuring Patient Access and Effective Drug Enforcement Act: Hearing Before the S. Judiciary Comm., 115th Cong. 6 (2017) (statement of John M. Gray, Healthcare Distribution Alliance). According to a supporter of the EPAEDEA, such an immediate prohibition on the legal right of the registrant to handle controlled substances as a result of an ISO could “limit access to needed medications by legitimate patients.” Id. 225 21 U.S.C. § 877 provides that “any person aggrieved by a final decision of the Attorney General may obtain review of the decision in the United States Court of Appeals for the District of Columbia or for the circuit in which his principal place of business is located upon petition filed with the court and delivered to the Attorney General within thirty days after notice of the decision.” 226 See Holiday CVS, 839 F. Supp. 2d at 158 (“As courts in this Circuit and elsewhere have recognized, the arbitrary and capricious standard of review applies to APA claims challenging the issuance of an ISO under 21 U.S.C. § 824(d).”). 227 5 U.S.C. § 706(2). 228 Id. (“The reviewing court shall—hold unlawful and set aside agency action, findings, and conclusions found to be— arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law ... [or] unsupported by substantial evidence.... ”). Congressional Research Service R45164 · VERSION 6 · UPDATED 23 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis order to obtain such preliminary injunctive relief,229 a registrant “must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.”230 The CSA provides that a reviewing court must use a “substantial evidence” standard in considering the DEA’s findings of facts with respect to an ISO,231 though a court applies the APA’s arbitrary and capricious standard of review when considering the DEA’s reason for deciding to adopt, modify, or reject the ALJ’s recommendation concerning an ISO.232 A federal appellate court has explained its review of the DEA’s issuance of an ISO under the APA as follows: “To uphold DEA’s decision, ... we must satisfy ourselves that the agency examined the relevant data and articulated a satisfactory explanation for its action including a rational connection between the facts found and the choice made.”233 A registrant served with an ISO could also request “an expedited administrative hearing”234 before an ALJ on the merits of the revocation or suspension at a time before that indicated in the OTSC.235 DEA regulations specify that the DEA Administrator “shall” grant the request for an earlier hearing and “fix a date for such hearing as early as reasonably possible.”236 DEA’s Response to the Opioid Abuse Crisis This section describes selected DEA actions intended to help alleviate the opioid crisis. DEA Actions Against Registrants As discussed earlier in this report, the CSA provides the DEA with a variety of criminal, civil, and administrative tools to hold manufacturers, distributors, pharmacies, and physicians accountable for actions that violate the CSA’s regulatory requirements. The DEA has used these authorities in 229 A preliminary injunction is “’an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion.’” Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (per curiam)(citation omitted). 230 See Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). 231 21 U.S.C. § 877 (“Findings of fact by the Attorney General, if supported by substantial evidence, shall be conclusive.”). According to the Supreme Court, substantial evidence “means evidence which is substantial, that is, affording a substantial basis of fact from which the fact in issue can be reasonably inferred. Substantial evidence is more than a scintilla, and must do more than create a suspicion of the existence of the fact to be established.” NLRB v. Columbian Enameling & Stamping Co., 306 U.S. 292, 299-300 (1939) (citations omitted); see also Brainard v. Sec’y of Health & Hum. Servs., 889 F.2d 679, 681 (6th Cir. 1989) (“Substantial evidence is more than a scintilla of evidence but less than a preponderance.... ”). 232 See Morall v. DEA, 412 F.3d 165, 177 (D.C. Cir. 2005) (“Although 21 U.S.C. § 877 does not specify a standard for reviewing the agency’s reasoning as distinguished from its factfinding, the APA provides the appropriate default standard: A court must set aside agency action it finds to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.... An agency [decision is] arbitrary and capricious if the agency ... entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise,”) (internal quotations and citations omitted); see also MacKay v. DEA, 664 F.3d 808, 817 (10th Cir. 2011) (“Under the Administrative Procedure Act, we may set aside the Deputy Administrator’s decision only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law ... [or] unsupported by substantial evidence.... ”) (internal quotations and citations omitted). 233 Morall, 412 F.3d at 177 (internal quotations and citations omitted). 234 See, e.g, Novelty Distribs. v. Leonhart, 562 F. Supp. 2d 20, 23 (D.D.C. 2008). 235 21 C.F.R. § 1301.36(h). 236 Id. Congressional Research Service R45164 · VERSION 6 · UPDATED 24 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis connection with the opioid crisis. For example, in February and March 2018, the DEA “surged its enforcement and administrative resources” to target prescribers and pharmacies suspected of diverting large amounts of opioid drugs, resulting in 147 revoked registrations and 28 arrests.237 In addition, in July 2017, CVS Pharmacy Inc. agreed to a $5 million settlement payment as well as an administrative compliance plan with the DEA, to resolve the federal government’s allegations that nine of its pharmacies in the Eastern District of California had failed to keep and maintain accurate records of its controlled substances, in violation of the CSA’s recordkeeping requirements.238 In early 2016, CVS also paid $8 million to the United States to settle allegations that certain CVS pharmacies in Maryland had dispensed controlled substances, including the opioids oxycodone, fentanyl, and hydrocodone, in violation of the CSA by failing to comply with their duty to ensure that the prescriptions were issued for legitimate medical purposes.239 In 2013, Walgreens agreed to pay $80 million in civil penalties to resolve DEA administrative actions and civil penalty investigations concerning “an unprecedented number of record-keeping and dispensing violations” occurring at six Walgreens pharmacies and a Walgreens drug distribution center in Florida that allegedly resulted in oxycodone and other prescription opioids to be diverted.240 As part of this settlement, Walgreens agreed to several terms and conditions, including ending its practice of “compensat[ing] its pharmacists based on the volume of prescriptions filled.”241 The DEA has also focused its attention on wholesale distributors of prescription opioids, which ship the drugs from drug manufacturers to pharmacies, and their compliance with the CSA’s recordkeeping and reporting requirements.242 Several DEA investigations into these wholesale distributers resulted in civil penalty settlements. In January 2017, one of the largest U.S. drug distributors, McKesson Corporation, agreed to pay a $150 million civil payment to resolve DEA allegations that it had, in violation of CSA regulatory requirements, “failed to design and implement an effective system to detect and report ‘suspicious orders’ for controlled substances distributed to its independent and small chain pharmacy customers.”243 The federal government alleged that “[f]rom 2008 until 2013, McKesson supplied various U.S. pharmacies an increasing amount of oxycodone and hydrocodone pills, frequently misused products that are part of the 237 Press Release, U.S. Dep’t of Just., Off. of Pub. Aff., DEA Surge in Drug Diversion Investigations Leads to 28 Arrests and 147 Revoked Registrations (Apr. 2, 2018), https://www.justice.gov/opa/pr/dea-surge-drug-diversioninvestigations-leads-28-arrests-and-147-revoked-registrations. 238 Press Release, U.S. Dep’t of Just., U.S. Att’y Off., Dist. of Md., CVS Pharmacy Inc. Pays $5M to Settle Alleged Violations of the Controlled Substance Act (July 11, 2017), https://www.justice.gov/usao-edca/pr/cvs-pharmacy-incpays-5m-settle-alleged-violations-controlled-substance-act. 239 Press Release, U.S. Dep’t of Just., U.S. Att’y Off., Dist. of Md., United States Reaches $8 Million Settlement Agreement with CVS for Unlawful Distribution of Controlled Substances (Feb. 12, 2016), https://www.justice.gov/ usao-md/pr/united-states-reaches-8-million-settlement-agreement-cvs-unlawful-distribution-controlled. 240 Press Release, U.S. Dep’t of Just., U.S. Att’y Off., S.D. of Fla, Walgreens Agrees To Pay A Record Settlement Of $80 Million For Civil Penalties Under The Controlled Substances Act (June 11, 2013), https://www.justice.gov/usaosdfl/pr/walgreens-agrees-pay-record-settlement-80-million-civil-penalties-under-controlled. 241 Id. 242 See Lenny Bernstein et al., How Drugs Intended for Patients Ended Up in the Hands of Illegal Users: “No One Was Doing Their Job,” WASH. POST, Oct. 22, 2016, http://wapo.st/2etAUdQ?tid=ss_mail&utm_term=.e09794f54343 (“The Drug Enforcement Administration targeted these middlemen for a simple reason. If the agency could force the companies to police their own drug shipments, it could keep millions of pills out of the hands of abusers and dealers. That would be much more effective than fighting ‘diversion’ of legal painkillers at each drugstore and pain clinic.”). 243 Press Release, U.S. Dep’t of Just., Off. of Pub. Aff., McKesson Agrees to Pay Record $150 Million Settlement for Failure to Report Suspicious Orders of Pharmaceutical Drugs (Jan. 17, 2017), https://www.justice.gov/opa/pr/ mckesson-agrees-pay-record-150-million-settlement-failure-report-suspicious-orders. Congressional Research Service R45164 · VERSION 6 · UPDATED 25 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis current opioid epidemic.”244 In addition to the monetary penalty, the settlement requires McKesson to (1) suspend for several years sales of controlled substances from a number of its distribution centers, (2) agree to certain “enhanced compliance obligations” that include periodic auditing and staffing and organization improvements; and (3) accept the oversight of an independent monitor to assess the company’s adherence with the compliance terms.245 Another major pharmaceutical drug distributor, Cardinal Health, Inc., agreed in December 2016 to pay $44 million to the federal government to settle allegations that it had failed to notify the DEA when it filled unusually large and frequent orders for controlled substances requested by pharmacies located in Maryland, Florida, and New York, and that it had failed to maintain effective controls against diversion.246 The settlement agreement between Cardinal Health and the federal government included an admission by the company that “from January 1, 2009 to May 14, 2012, it failed to report suspicious orders to the DEA as required by the CSA.”247 In 2014, the DEA took an administrative action to revoke the registration of Masters Pharmaceuticals, Inc. (Masters), a bulk supplier of prescription medications to many U.S. pharmacies, after concluding that the company had not satisfied its legal obligation to monitor and report to the DEA suspicious orders for controlled substances.248 Masters had previously entered into a settlement agreement with the DEA in 2009 in which Masters agreed to pay $500,000 and implement a compliance system to detect suspicious orders of controlled substances and prevent the substances from being diverted into illegal channels.249 However, in the years following the settlement, the DEA grew to suspect that Masters’s employees were not detecting and reporting to the DEA suspicious orders of oxycodone products.250 In 2013, the DEA issued an Order to Show Cause why Masters’s registration should not be revoked, in light of allegations that Masters had ignored its duty to report suspicious orders after its computer system had flagged controlled substance orders that were unusual in size, frequency, or pattern.251 The DEA Administrator concluded that Masters’s repeated violations of the suspicious orders reporting requirement warranted revocation of its registration to distribute controlled substances.252 Masters challenged the DEA’s revocation decision in federal court, arguing among other things that the DEA’s factual conclusions were not supported by the record.253 In June 2017, the U.S. Court of Appeals for the D.C. Circuit denied Masters’s petition for review, seeking to overturn the DEA’s final order, after the court found “no prejudicial error in DEA’s decision.”254 In addition to these actions against distributors, the DEA has also investigated opioid manufacturers for their failure to report suspicious orders of controlled substances that occurred downstream in the drug supply chain. In July 2017, the DEA confirmed it had reached a $35 244 Id. 245 Id. 246 Press Release, U.S. Dep’t of Just., U.S. Att’y Off., Dist. of Md., Cardinal Health Agrees to $44 Million Settlement for Alleged Violations of Controlled Substances Act (Dec. 23, 2016), https://www.justice.gov/usao-md/pr/cardinalhealth-agrees-44-million-settlement-alleged-violations-controlled-substances-act. 247 Id. 248 Masters Pharm., Inc. v. DEA, 861 F.3d 206, 211 (D.C. Cir. 2017). 249 Id. at 213. 250 Id. at 214. 251 Id. 252 Id. at 215 253 Id. 254 Id. at 212. Congressional Research Service R45164 · VERSION 6 · UPDATED 26 Legal Authorities Under the Controlled Substances Act to Combat the Opioid Crisis million civil penalty settlement with Mallinckrodt LLC, a drug manufacturer that is one of the largest makers of the highly addictive generic pain reliever oxycodone.255 This settlement resolved allegations that the company committed several violations of the CSA from 2008 until 2011 by supplying to drug distributors that, in turn, supplied pharmacies and pain clinics, “an increasingly excessive quantity of oxycodone pills without notifying DEA of these suspicious orders.”256 The DEA described this settlement as “groundbreaking” in part because it is the first time the DEA has been able to hold a drug manufacturer responsible for detecting and reporting suspicious orders relating to downstream sales between its distributor customers and the distributors’ customers (pharmacies).257 This settlement agreement also apparently contains the first public statement of the DEA’s position258 that “controlled substance manufacturers need to go beyond ‘know your customer’ to use otherwise available company data to ‘know your customer’s customer’ to protect these potentially dangerous pharmaceuticals from getting into the wrong hands.”259 Under the settlement, Mallinckrodt agreed to analyze data it collects involving “chargebacks,” which are reimbursements the company offers to their drug distributor customers based on the distributor’s discounted sale of its drugs to pharmacies and pain clinics, in order to monitor and report to the DEA any suspicious orders of oxycodone placed by the distributor’s customers.260 Commentators have argued that the legal basis of the DEA imposing an obligation on a drug manufacturer to “know your customer’s customer,” and its ability to hold the company “responsible for what happens to its drugs once the distributors s [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR45164. Public record. Not legal advice.