Overprescribing and inappropriate prescribing of controlled substances are significant causes of the nationwide opioid abuse epidemic. We have long believed that to effectively address the opioid epidemic, the Drug Enforcement Administration (“DEA”) must focus on physicians and other practitioners who fail to comply with legitimate prescribing and dispensing practices. Two recent actions by the DOJ and DEA acknowledge that data collected by DEA since 1971 can be an effective enforcement tool and in certain cases can assist manufacturers and distributors to identify potential outliers.
We reported here that in November, Attorney General Jeff Sessions announced several initiatives addressing opioid abuse to include a new Louisville, Kentucky, Field Division and designated Opioid Coordinators in every district. More recently, on January 30, 2018, the Attorney General announced that DEA is attacking the opioid epidemic by launching a “surge” over the next six weeks by special agents, diversion investigators, and intelligence specialists targeting pharmacies and prescribers that dispense “unusual or disproportionate amounts of drugs.” Attorney General Sessions Delivers Remarks on Efforts to Reduce Violent Crime and Fight the Opioid Crisis (Jan. 30, 2018) (here). Sessions noted that DEA annually collects 80 million controlled substance transaction reports from manufacturers and distributors that contain distribution quantities and inventory information. The Attorney General said that “DEA will aggregate these numbers to find patterns, trends, statistical outliers-and put them into targeting packages.” Sessions concluded that the surge will lead to “more arrests, secure more convictions-and ultimately help us reduce the number of prescription drugs available for Americans to get addicted to or overdose from these dangerous drugs.”
The Attorney General did not identify the transaction reports by name, but it is clear that he was referring to the Automation of Reports and Consolidated Orders System (“ARCOS”) reports that manufacturers and distributors submit to DEA. Since regulations were first promulgated in 1971, DEA has required manufacturers and distributors of bulk and dosage form controlled substances to report inventories, acquisitions and dispositions of schedule I and II substances, and narcotic substances in schedule III as well as other selected substances such as Gamma-Hydroxybutyric Acid (“GHB”). 21 C.F.R. § 1304.33(c). Manufacturers must also report synthesizing activities involving those substances in addition to certain schedule III and IV psychotropic controlled substances. Manufacturers and distributors submit transaction reports to DEA at least quarterly. 21 C.F.R. § 1304.33(b).
Manufacturers and distributors must file ARCOS reports monthly, or in some cases quarterly, for every covered transaction to include the date, customer and amount of controlled substance distributed. Thus, DEA is able to track the specific quantity of drugs sold to wholesale distributors and the amount then distributed to each pharmacy. The DEA ARCOS Unit has routinely aggregated the data from all reports and provides information to DEA agents and investigators, and other federal and state law enforcement and regulatory agencies, to identify diversion from licit to illegal channels.
Attorney General Sessions’ announcement that DEA would use this data to increase enforcement action against prescribers and other practitioners is not surprising except we wonder why DEA has not previously taken such action. DEA has certainly taken aggressive action against manufacturers and distributors for failing to report suspicious orders of controlled substances at the same time that DEA already possessed a database on the purchasing patterns of practitioners. Unlike manufacturers and distributors, DEA has visibility to all ARCOS-reportable transactions, including purchases by pharmacies and practitioners; visibility that other stakeholders lack. Manufacturers and distributors can only see with certainty what they themselves sell to pharmacies.
The industry has made repeated requests over the years for DEA to share information that could be helpful in identifying potential suspicious orders. Finally, last Wednesday, DEA announced that is adding to its ARCOS Online Reporting System the ability for manufacturers and distributors “to view the number of competitors who have sold a particular controlled substance to a prospective customer in the last six months.” DEA Creates New Resource to Help Distributors Avoid Oversupplying Opioids (Feb. 14, 2018) (here). DEA trumpeted that “this new tool will provide valuable information for distributors to consider as part of their assessment” of suspicious orders and may present a “red flag” that the customer may be diverting drugs.
While the new ARCOS tool is a useful first step, its usefulness is limited and could be improved. For example, it would also be useful if DEA would routinely publish information about trends in purchases of controlled substances by city or region, especially identifying areas where DEA believes there is a concern about sales relative to geography and population. We understand there are limits to what DEA can and should provide given the highly confidential nature of individual sales and purchase data. However, more coordination with industry on diversion trends would be very useful to manufactures and distributors, in particular. The regulated industry should consider that DEA may now expect that industry will use this information in evaluating customers and customer orders, e.g., suspicious orders.
It will be interesting to see the results of the DOJ/DEA enforcement effort. We suspect that DEA will also utilize state Prescription Drug Monitoring Program (“PDMP”) data, to further evaluate whether certain prescribing and dispensing practices are for legitimate medical purposes. State PDMPs track prescribing by practitioners and dispensing by pharmacies, hospitals and physicians. The ARCOS and PDMP data used together allow DEA investigators to identify prescribers and pharmacies that are dispensing, as the Attorney General characterizes, “unusual or disproportionate amounts of drugs.”
While DEA has used ARCOS data to support enforcement efforts against manufacturers and distributors, we appreciate the Attorney General’s announcement that such data will be used in a comprehensive enforcement effort to target the primary source of the opioid crisis, overprescribing, and to that we say, it is about time.