Tag: Jeff Sessions

DEA Proposed Rule Would Limit Drug Manufacturer’s Annual Opioid Production

In yet another development on the fight to address the opioid epidemic, U.S. Attorney General Jeff Sessions announced on Tuesday, April 17th that the U.S. Drug Enforcement Administration (“DEA”) will issue a Notice of Proposed Rulemaking (“NPRM”) amending the controlled substance quota requirements in 21 C.F.R. Part 1303. The Proposed Rule was published in the Federal Register yesterday and seeks to limit manufacturers’ annual production of opioids in certain circumstances to “strengthen controls over diversion of controlled substances” and to “make other improvements in the quota management regulatory system for the production, manufacturing, and procurement of controlled substances.”[1]

Under the proposed rule, the DEA will consider the extent to which a drug is diverted for abuse when setting annual controlled substance production limits. If the DEA determines that a particular controlled substance or a particular company’s drugs are continuously diverted for misuse, the DEA would have the authority to reduce the allowable production amount for a given year. The objective is that the imposition of such limitations will “encourage vigilance on the part of opioid manufacturers” and incentivize them to take responsibility for how their drugs are used.

The proposed changes to 21 C.F.R. Part 1303 are fairly broad, but could lead to big changes in opioid manufacture if implemented. We have summarized the relevant changes below.

Section 1303.11: Aggregate Production Quotas

Section 1303.11 currently allows the DEA Administrator to use discretion in determining the quota of schedule I and II controlled substances for a given calendar year by weighing five factors, including total net disposal and net disposal trends, inventories and inventory trends, demand, and other factors that the DEA Administrator deems relevant. Now, the proposed rule seeks to add two additional factors to this list, including consideration of the extent to which a controlled substance is diverted, and consideration of U.S. Food and Drug Administration, Centers for Disease Control and Prevention, Centers for Medicare and Medicaid Services, and state data on legitimate and illegitimate controlled substance use. Notably, the proposed rule allows states to object to proposed, potentially excessive aggregate production quota and allows for a hearing when necessary to resolve an issue of material fact raised by a state’s objection.

Section 1303.12 and 1303.22: Procurement Quotas and Procedure for Applying for Individual Manufacturing Quotas

Sections 1303.12 and 13030.22 currently require controlled substance manufactures and individual manufacturing quota applicants to provide the DEA with its intended opioid purpose, the quantity desired, and the actual quantities used during the current and preceding two calendar years. The DEA Administrator uses this information to issue procurement quotas through 21 C.F.R. § 1303.12 and individual manufacturing quotas through 21 C.F.R. § 1303.22. The proposed rule’s amendments would explicitly state that the DEA Administrator may require additional information from both manufacturers and individual manufacturing quota applicants to help detect or prevent diversion. Such information may include customer identities and the amounts of the controlled substances sold to each customer. As noted, the DEA Administrator already can and does request additional information of this nature from current quota applicants. The proposed rule would only provide the DEA Administrator with express regulatory authority to require such information if needed.

Section 1303.13: Adjustments of Aggregate Production Quotas

Section 1303.13 allows the DEA administrator to increase or reduce the aggregate production quotas for basic classes of controlled substances at any time. The proposed rule would allow the DEA Administrator to weigh a controlled substance’s diversion potential, require transmission of adjustment notices and final adjustment orders to a state’s attorney general, and provide a hearing if necessary to resolve material factual issues raise by a state’s objection to a proposed, potentially excessive adjusted quota.

Section 1303.23: Procedures for Fixing Individual Manufacturing Quotas

The proposed rule seeks to amend Section 1303.23 to deem the extent and risk of diversion of controlled substances as relevant factors in the DEA Administrator’s decision to fix individual manufacturing quotas. According to the proposed rule, the DEA has always considered “all available information” in fixing and adjusting the aggregate production quota, or fixing an individual manufacturing quota for a controlled substance. As such, while the proposed rule’s amendment may require manufacturers to provide the DEA with additional information for consideration, it is not expected to have any adverse economic impact or consequences.

Section 1303.32: Purpose of Hearing 

Section 1303.32 currently grants the DEA Administrator to hold a hearing for the purpose of receiving factual evidence regarding issues related to a manufacturer’s aggregate production quota. The proposed rule would amend this section to conform to the amendments to sections 1303.11 and 1303.13 discussed herein, allowing the DEA Administrator to explicitly hold a hearing if he/she deems a hearing to be necessary under sections 1303.11(c) or 1303.13(c) based on a state’s objection to a proposed aggregate production quota.

Industry stakeholders will have an opportunity to submit comments for consideration by the DEA by May 4, 2018.

[1] DEA, NPRM 21 C.F.R. Part 1303 (Apr. 17, 2018).

 

©2018 Epstein Becker & Green, P.C. All rights reserved.

Department of Justice Announces Task Force to Combat Prescription Opioid Crisis

Last week, United States Attorney General Sessions announced the creation of the Department of Justice Prescription Interdiction & Litigation (PIL) Task Force to combat the prescription opioid crisis.  According to the Department of Justice (Justice), the PIL Task Force will rely on “all available criminal and civil enforcement tools” to hold those at “at every level of the [opioid] distribution system” accountable for unlawful conduct.  This significant step may result in greater oversight and widespread criminal and civil prosecutions.

Prescription opioids, such as oxycodone, hydrocodone and morphine, are powerful pain-reducing drugs, but may also trigger feelings of pleasure or a “high.”  Prolonged use of opioids can lead to addiction, misuse and abuse.  According to the United States Department of Health and Human Services (HHS), an estimated 64,000 Americans died of drug overdoses in 2016, with the vast majority the result of opioids – nearly 116 people lost their lives to opioids each day.  HHS declared a public health emergency in 2017, and followed with a strategic plan to improve access to prevention, treatment and support services to address it.  The PIL Task Force will work in conjunction with HHS to provide additional federal resources to address the problem.

At the manufacturer level, the PIL Task Force will examine existing state and local government lawsuits against opioid manufacturers to determine what, if any, federal assistance can be provided.  One example is already underway: Justice will file a statement of interest in the pending multi-district federal litigation in Ohio, which focuses on the improper marketing and distribution of prescription medications by manufacturers and distributors.  Justice will argue the federal government has borne substantial costs arising from the opioid epidemic and is entitled to reimbursement.

The PIL Task Force will also rely on existing laws to hold distributors, pharmacies and prescribers accountable for unlawful actions.  This work was underway even before the Task Force’s inception.  In 2015, for example, a grand jury returned a multicount indictment against Little Rock, Arkansas physician Dr. Richard Johns for unnecessarily prescribing oxycodone to patients, including to some patients he had neither examined nor met.  Johns later pleaded guilty to a single count of conspiring to possess with the intent to distribute oxycodone through a plea deal and received a nine-year federal prison sentence.

Finally, Attorney General Sessions directed the PIL Task Force to establish a working group to (1) improve coordination and data sharing across the federal government to better identify violations of law and patterns of fraud related to the opioid epidemic; (2) evaluate possible changes to the regulatory regime governing opioid distribution; (3) recommend changes to laws.

The Attorney General was clear: “We will use criminal penalties.  We will use civil penalties.  We will use whatever tools we have to hold people accountable for breaking our laws.”

The PIL Task Force is another example of federal, state and local actions to address the opioid epidemic, which may significantly impact the health care industry.  Dinsmore & Shohl is monitoring the situation and stands ready to assist clients in navigating these developments.

National Institute on Drug Abuse, Opioid Overdose Crisis (Feb. 2018)

U.S. Department of Justice, Attorney General Sessions Delivers Remarks Announcing the prescription Interdiction and Litigation Task Force (Feb. 27, 2018).

U.S. Department of Justice, Justice Department to File Statement of Interest in Opioid Case (Feb. 27, 2018),

U.S. Department of Health & Human Services, HHS Acting Secretary Declares Public Health Emergency to Address National Opioid Crisis (Oct. 26, 2017).

 

© 2018 Dinsmore & Shohl LLP. All rights reserved.

War on Weed: AG Jeff Sessions Creates Reefer Madness

Attorney General Jeff Sessions has caused chaos in the marijuana industry and is forcing those who have made efforts to create legalized businesses in compliance with state laws to ponder whether their anticipated profits will go up in smoke. In a memo to all U.S. attorneys, Sessions rescinded Obama-era decrees that restrained prosecutors from enforcing federal drug laws in states that acted to legalize marijuana under their own laws. The decrees created an environment in which states felt they had the freedom to legalize marijuana without interference from federal authorities. Nonetheless, all aspects of the marijuana industry – for example, growing, manufacturing related products, distributing, advertising, and managing property used to grow, manufacture or distribute marijuana – have remained illegal. The updated guidance from Sessions now encourages federal prosecutors to resume enforcing these laws.

It is no coincidence that Sessions, a longtime opponent of the legalization of marijuana for recreational use, issued his guidance just days after California allowed recreational marijuana businesses to open their doors. Those who follow this issue know Sessions also has his sights set on enforcing federal drug laws against those engaged in the medical marijuana industry. Sessions requested Congress remove a budgetary provision currently prohibiting the Department of Justice (DOJ) from using funds to “prevent certain states ‘from implementing their own State laws that authorize the use, distribution, possession or cultivation of medical marijuana[.]’”[1]

This new guidance highlights the conflict that exists between federal law and the laws of state, local and tribal governments that have seemingly legalized marijuana both recreationally and medically. This should be cause for concern for those involved in the marijuana industry. Federal drug laws prevail over the comparable laws of states, cities and tribal communities; so, compliance with those laws is not a defense to the violation of federal laws prohibiting every aspect of the fast-growing marijuana industry. A key factor for its future is what happens to the Rohrabacher-Blumenauer Amendment, also known as the Rohrabacher-Farr Amendment, which prohibits the DOJ from spending federal funds to interfere with state medical marijuana laws. The law will expire on January 19 absent its annual re-authorization from Congress.

Ultimately, the manner in which the guidance from Sessions will be implemented by federal prosecutors around the country is uncertain. However, now that the prosecutors have the freedom and the instruction to enforce the drug laws against the marijuana industry, it is likely they will flex their muscles. This will result in substantially adverse legal and economic consequences for the businesses and individuals engaged in that industry. If you are concerned about the impact this new guidance may have on you, your business or an investment of yours, please contact your Dinsmore attorney. We have many attorneys experienced in this area, including multiple former federal prosecutors, who can assist you with your needs and concerns.

[1] Jeff Sessions’ letter regarding Department of Justice Appropriations is available at https://www.scribd.com/document/351079834/Sessions-Asks-Congress-To-Undo-Medical-Marijuana-Protections.

 

© 2017 Dinsmore & Shohl LLP. All rights reserved.
This post was written by Robert G. Marasco and Marisa K. Fenn of Dinsmore & Shohl LLP.