CHAPTER

4

THE CLOSED SYSTEM OF CONTROLLED SUBSTANCE DISTRIBUTION

CHAPTER OBJECTIVES

Upon completing this chapter, the reader will be able to:

▶  Distinguish the five schedules of controlled substances.

▶  Understand which activities require registration with the Drug Enforcement Administration (DEA).

▶  Recognize the general requirements for opioid treatment programs (OTPs) and for treating addicts outside of treatment programs.

▶  Identify the penalties for violating the Controlled Substances Act (CSA).

▶  Discuss the authority and scope of a DEA inspection of a pharmacy.

▶  Describe laws related to the CSA.

Society has determined that certain drugs warrant stricter regulation and control than do other drugs. Called controlled substances or scheduled drugs, these drugs have the potential for addiction and abuse. This chapter outlines the general rules that govern the distribution of controlled substances.

The primary federal law that regulates this class of drugs is called the Federal Comprehensive Drug Abuse Prevention and Control Act of 1970, more commonly known as the Controlled Substances Act (21 U.S.C. §§ 801–970).

The act consists of three titles:

•  Title I establishes rehabilitation programs for drug abusers.

•  Title II provides for the registration and distribution of controlled substances.

•  Title III addresses the importation and exportation of controlled substances.

Title II and its regulations are applicable to pharmacy practice.

Replacing several federal laws that haphazardly regulated these drugs in one fashion or another, the law establishes a “closed” system for the manufacturing, distributing, and dispensing of controlled substances. Thus, only those persons or entities registered with the DEA, an agency of the U.S. Department of Justice, may legally engage in these activities. The intent of this closed system is to reduce the diversion of controlled substances to illicit markets.

As part of the intent to reduce diversion, the CSA’s system of national registration, as opposed to state registration, is designed to achieve uniformity. For example, in State v. Rasmussen, 213 N.W.2d 661 (Iowa 1973), reported in the case studies section of the chapter, the Iowa Supreme Court ruled that, because of the CSA’s objective to establish national uniformity, the Iowa Board of Pharmacy could not prohibit Iowa pharmacies from dispensing controlled substance prescriptions from out-of-state physicians.

The DEA is charged with administering all parts of the CSA. The DEA’s website at http://www.usdoj.gov/dea, and more specifically the DEA Office of Diversion Control website at http://www.deadiversion.usdoj.gov, provide access to considerable information related to controlled substances, including the CSA, Federal Register, Code of Federal Regulations, and the Pharmacist’s Manual containing summaries of relevant laws and regulations. Because controlled substances are drugs, they are also subject to the Food, Drug and Cosmetic Act (FDCA), which often necessitates that the DEA coordinate its activities with the Food and Drug Administration (FDA). Created in 1973 by means of a presidential reorganization, the DEA replaced the Bureau of Narcotics and Dangerous Drugs, the Office for Drug Abuse Law Enforcement, the Office of National Narcotic Intelligence, and various departments of other agencies.

STATE VERSUS FEDERAL AUTHORITY

A state may regulate controlled substances under its police powers as long as the state law does not conflict with the federal law. Therefore, the state law should not be less strict than its federal counterpart, or the state law might be invalidated under the preemption doctrine. Many times, however, pharmacists are faced with conflicting state and federal laws. For example, if a state had a law that did not require the address and DEA number of the prescriber to be written on the controlled substance prescription itself, provided the information is readily retrievable, this would conflict with federal law that mandates this information be on the prescription. Therefore, pharmacists who do not comply with the stricter federal law risk prosecution by the DEA.

In Lemmon Company v. State Board of Medical Examiners, 417 A.2d 568 (N.J. 1980), reported in the case studies section of the chapter, two drug manufacturers challenged the validity of a New Jersey regulation that prohibited the use of certain amphetamines and amphetamine-type controlled drugs in the treatment of obesity. One of the arguments advanced by the plaintiffs was that the regulation conflicted with federal law because federal law does not so restrict the use of these drugs. The court, however, disagreed with the plaintiffs, finding that the regulation was not inconsistent with federal law and was reasonably related to the legitimate objective of controlling the traffic in controlled substances. In contrast to Lemmon, in Zogenix, Inc. v. Patrick, No. 14-11689-RWZ (D. Mass. 2014), the court issued a preliminary injunction blocking a state order banning the prescribing and dispensing of an FDA-approved C-II opioid medication, Zohydro ER. The court reasoned that the ban was preempted by federal law on the basis that the state was imposing its own conclusion about the safety and efficacy of the drug, obstructing the FDA’s constitutionally mandated charge. However, rather than ban the medication, the state may, with their authority to regulate the medical and pharmacy professions, be permitted to place reasonable requirements on the prescribing and dispensing of the medication.

The DEA works closely with many state law enforcement agencies and state boards of pharmacy and frequently leaves the routine investigation of pharmacies to these agencies. If controlled substance violations are found, the pharmacy board often informs the DEA of the situation. Although the DEA may then choose to investigate, it may instead allow the state agencies to proceed in the further investigation and enforcement of the incident. The federal government has the authority to regulate drugs through the Interstate Commerce Clause of the U.S. Constitution. The CSA, however, reaches into intrastate commerce as well. Under section 801 of the act, Congress made clear its position that intrastate transactions involving controlled substances have a “substantial and direct” effect on interstate commerce. Sections 801(5) and (6) of the act further provide that the interstate manufacture and distribution of controlled substances cannot be distinguished from intrastate manufacture and distribution. As a result, federal regulation of intrastate traffic of controlled substances is essential to the effective regulation of the interstate traffic.

The courts have upheld this presumption of an impact on interstate commerce. In United States v. Lopez, 459 F.2d 949 (5th Cir. 1972), the appellants contended that section 801 was unconstitutional because Congress exceeded the scope of the Interstate Commerce Clause. The court, however, held that Congress is justified in its actions, and no attempt at differentiation is necessary when separating interstate activities from intrastate activities that would be futile and obstruct justice, such as with controlled substances. The same conclusion was also reached in a more recent U.S. Supreme Court Case discussed later under “Medical and Recreational Use of Marijuana,” Gonzales v. Raich, 545 U.S. 1 (June 6, 2005).

  TAKE-AWAY POINTS

CLASSIFICATION OF CONTROLLED SUBSTANCES

In several provisions, the CSA refers specifically to narcotic controlled substances. Thus, the distinction between narcotic and non-narcotic controlled substances is important. A narcotic controlled substance is defined as a natural or synthetic opium or opiate and any derivative, such as poppy straw, coca leaves, cocaine, and ecgonine (21 C.F.R. § 1300.01(b)(30)). Section 812 of the CSA provides for five schedules of controlled substances. A drug is placed into one of the schedules according to the listed criteria.

SCHEDULE I (DRUGS AND OTHER SUBSTANCES)

Drugs and other substances are placed in schedule I based upon the following criteria:

•  Have a high potential for abuse

•  Have no currently accepted medical use in treatment in the United States

•  Lack accepted information on the safety of their use, even under medical supervision

Among the substances listed in schedule I are: some opiates and opiate derivatives, such as dihydromorphine, heroin, and morphine methylbromide; and hallucinogenic substances, such as marijuana, certain synthetic cannabinoids (known as herbal incense), certain synthetic cathinones (known as bath salts), lysergic acid diethylamide, peyote, mescaline, psilocybin, and tetrahydrocannabinol. Methaqualone, also in schedule I, in a relatively few years worked its way from being unscheduled, then to schedule II, and ultimately to schedule I because of its extremely high potential for abuse. Gamma-Hydroxybutyric acid (GHB), known as the date rape drug, is placed in schedule I if it is a GHB product not approved by the FDA. (If it is a GHB product that has been approved by the FDA, it is listed in schedule III.) Schedule I drugs have no accepted medical use and, thus, cannot be manufactured, prescribed, or dispensed, except as approved by the DEA for investigation purposes.

Medical and Recreational Use of Marijuana

Marijuana has many supporters who firmly believe in its medicinal value, especially for relieving pain and nausea in terminal illness, and who argue that it should not be listed in schedule I. (Note: Dronabinol, which contains an active ingredient of marijuana, is available as an oral schedule III drug. However, most patients who use marijuana medically do not regard it as being as effective as marijuana.)

As of late 2014, 23 states plus the District of Columbia allowed comprehensive public medical marijuana programs. Criteria to be considered comprehensive include protection from state criminal penalties for using marijuana for a medical purpose and access to marijuana through home cultivation, dispensaries, or another similar system. An additional 11 states have approved the use of marijuana for medical reasons in limited situations or as a legal defense. In 2012, Colorado and Washington also legalized limited amounts of marijuana for recreational use in adults 21 and older. These state laws, however, whether for medicinal or recreational use, do not change the fact that marijuana is a schedule I drug under federal law. The laws also do not allow marijuana to be dispensed by pharmacists, nor could they without putting pharmacists in a conflict of law dilemma. States that authorize marijuana use place individuals who wish to possess and use the drug in a similar conflict of law position. Individuals face arrest by the federal government for illegal possession of a schedule I drug, even though their conduct would be legal under state law. For additional and updated information on state laws regarding the use of marijuana, refer to the White House Office of National Drug Control Policy’s Marijuana Resource Center: State Laws Related to Marijuana (http://www.whitehouse.gov/ondcp/state-laws-related-to-marijuana) or the National Conference of State Legislators, State Medical Marijuana Laws (http://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx).

In the case of Gonzales v. Raich, 545 U.S. 1 (June 6, 2005), sheriff’s deputies and DEA agents raided the home of a terminally ill patient in California and found six marijuana plants. The deputies concluded that the plants were legal under California law and took no action. The DEA agents, however, destroyed the plants. Fearing future federal action, the patient and her caregivers brought an injunction action against the U.S. attorney general, contending that the CSA is unconstitutional to the extent it prevents them from the intrastate cultivation and possession of marijuana for personal medical use. Plaintiffs emphasized that the marijuana is locally cultivated and used domestically, rather than being sold on the open market, and therefore, federal regulation violates the Interstate Commerce Clause. The district court found for the government and denied the injunction. Overruling the district court, the 9th Circuit Court of Appeals allowed the injunction. The court found that the plaintiffs had a strong likelihood of success on the merits and that a denial of the injunction would cause them a significant hardship. On appeal to the U.S. Supreme Court, however, the Court overturned the court of appeals decision and found for the government. The Court held that, based upon precedent, the government can regulate intrastate marijuana because failure to do so could undercut interstate regulation of the substance and because it would be difficult for law enforcement to differentiate intrastate from interstate marijuana.

The Raich decision places patients in medical marijuana states in the situation of being able to legally possess the plants under state law but not under federal law. State medical marijuana laws create dilemmas for patients as well. Although the laws allow qualified patients to possess or grow marijuana, some do not define how much medical marijuana a patient may legally possess, resulting in some patients being arrested by the state for growing too many plants. Obtaining the drug or the plants creates additional problems because many patients cannot grow their own. In response, cannabis buyer cooperatives have materialized for the purpose of manufacturing and distributing marijuana to patients. State and local governments generally tolerate the cooperatives unless a cooperative crosses the line and sells marijuana for nonmedical uses as well. The U.S. Justice Department challenged the legality of one of these cooperatives under federal law, ultimately leading to a U.S. Supreme Court decision that the cooperative violated the CSA by manufacturing and distributing marijuana (United States v. Oakland Cannabis Buyer’s Co-op, 532 U.S. 483 (2001)).

Under President George W. Bush, the federal government aggressively attempted to enforce federal law and limit the effect of state medical marijuana laws. The U.S. Justice Department issued a policy that any physician who recommended marijuana to a patient could face revocation of the physician’s DEA registration. The 9th Circuit Court of Appeals, however, ruled in the case of Conant v. Walters, 309 F.3d 629 (9th Cir. 2002) that this policy violated the First Amendment rights of physicians. After that failed attempt, the DEA issued letters to the landlords of medical marijuana dispensaries warning that under federal law they could be imprisoned and/or forced to forfeit their buildings. The Obama administration signaled in 2009 that it would not interfere with state medical marijuana laws. However, in August 2013, the Obama administration updated its marijuana enforcement policy. The updated policy states that while marijuana remains illegal federally, the U.S. Department of Justice expects states that allow for the use of marijuana to strongly enforce their laws and protect public health and safety, and that the federal government has the right at any time to challenge states laws or prosecute under federal law.

SCHEDULE II (DRUGS AND OTHER SUBSTANCES)

Drugs and other substances are placed in schedule II based on the following criteria:

•  Have a high potential for abuse.

•  Have a currently accepted medical use in treatment in the United States or a currently accepted medical use with severe restrictions.

•  Abuse of the drug or other substance may lead to severe physical or psychological dependence.

Schedule II drugs include opium and various other narcotics, such as morphine, codeine, fentanyl, hydromorphone, oxycodone, methadone, meperidine, dihydrocodeine, diphenoxylate, and cocaine; certain stimulants, such as amphetamine, methamphetamine, phenmetrazine, and methylphenidate; and certain depressants, such as amobarbital, glutethimide, pentobarbital, secobarbital, and phencyclidine. In an effort to help address the nation’s exponential increase in prescription drug abuse, on October 6, 2014, hydrocodone combination products were rescheduled from schedule III to schedule II (79 Fed. Reg. 49661).

SCHEDULE III (DRUGS AND OTHER SUBSTANCES)

Schedule III includes those drugs and other substances that

•  Have a potential for abuse less than that of the drugs or other substances in schedules I and II

•  Have a currently accepted medical use in treatment in the United States

•  When abused may lead to moderate or low physical dependence or high psychological dependence

Schedule III drugs include many whose active ingredient is listed in schedule II; however, because the active ingredient is compounded with another ingredient or is in a smaller dosage, the drug’s abuse potential is not great enough to warrant a schedule II classification. Examples of schedule III drugs are depressants, such as amobarbital, secobarbital, and pentobarbital in any mixture or preparation, as well as lysergic acid and methyprylone in suppository form; narcotic drugs, such as aspirin with codeine and acetaminophen with codeine; nalorphine; certain stimulants, benzphetamine, chlorphentermine, clortermine, and phendimetrazine; anabolic steroids; dronabinol; ketamine; GHB approved by the FDA; and paregoric.

A narcotic schedule III drug may not contain more than

•  1.8 g of codeine or dihydrocodeine per 100 ml, or not more than 90 mg per dosage unit.

•  300 mg of dihydrocodeinone and ethylmorphine per 100 ml, or not more than 15 mg per dosage unit.

•  500 mg of opium per 100 ml or per 100 g, or not more than 25 mg per dosage unit.

•  50 mg of morphine per 100 ml or per 100 g.

SCHEDULE IV (DRUGS AND OTHER SUBSTANCES)

Schedule IV drugs and other substances include those that

•  Have a low potential for abuse relative to the drugs or other substances in schedule III

•  Have a currently accepted medical use in treatment in the United States

•  When abused may lead to limited physical dependence or psychological dependence relative to the drugs or other substances in schedule III

Schedule IV drugs include narcotics, such as dextropropoxyphene and products that contain not more than 1 mg of difenoxin and not less than 25 mcg of atropine sulfate per dosage unit; depressants, such as alprazolam, barbital, chloral hydrate, chlordiazepoxide, diazepam, flurazepam, lorazepam, meprobamate, oxazepam, phenobarbital, and triazolam; stimulants, such as diethylpropion and phentermine; a pain medication, pentazocine; a muscle relaxant, carisoprodol (effective January 11, 2012); and an analgesic medication, tramadol (effective August 18, 2014).

SCHEDULE V (DRUGS AND OTHER SUBSTANCES)

Schedule V drugs and other substances include those that

•  Have a low potential for abuse relative to the drugs or other substances in schedule IV

•  Have a currently accepted medical use in treatment in the United States

•  When abused may lead to limited physical dependence or psychological dependence relative to the drugs or other substances in schedule IV

Schedule V includes primarily antitussive preparations that contain codeine and antidiarrheal products that contain an opiate. A schedule V drug cannot contain more than

•  200 mg of codeine per 100 ml or 100 g.

•  100 mg of dihydrocodeine, ethylmorphine, or opium per 100 ml or 100 g.

•  2.5 mg of diphenoxylate and not less than 25 mcg of atropine sulfate per dosage unit.

•  0.5 mg of difenoxin and not less than 25 mcg of atropine sulfate per dosage unit.

Section 812 and the regulations (21 C.F.R. §§ 1308.11–1308.15) provide a complete list of all drugs in each schedule.

  TAKE-AWAY POINTS

AUTHORITY FOR SCHEDULING

Section 811 of the CSA grants the attorney general of the United States the authority to place an unscheduled drug into a schedule, place a scheduled drug into a different schedule, or remove a drug from scheduling. Such a determination, however, must be based on the record after opportunity for a hearing. Recent examples include the attorney general placing an unscheduled drug, tramadol, into a schedule, as well as transferring a drug, hydrocodone combination products, between schedules.

Before initiating any proceedings, the attorney general must request from the secretary of the Department of Health and Human Services (DHHS) a scientific and medical evaluation of the drug and a recommendation regarding whether the drug should be controlled. The secretary and attorney general must base the ultimate decision on these factors:

•  Actual or relative potential for abuse

•  Scientific evidence of its pharmacological effect, if known

•  The state of current scientific knowledge regarding the drug or other substance

•  History and current pattern of abuse

•  Scope, duration, and significance of abuse

•  Risk to the public health

•  Physiological or psychic dependence liability

•  Whether the substance is an immediate precursor of a substance already controlled

The recommendations of the secretary in regard to scientific and medical matters are binding on the attorney general. If the secretary recommends that a drug not be controlled, the attorney general must comply. If the attorney general finds that a drug must be placed into schedule I to avoid an “imminent hazard to the public safety,” however, the attorney general may so schedule the drug without consulting the secretary of DHHS (§ 811(h)).

Whenever a manufacturer submits a new drug application to the secretary for any drug having a stimulant, depressant, or hallucinogenic effect on the central nervous system, the secretary must forward this information to the attorney general if it appears that the drug has abuse potential (§ 811(f)).

  TAKE-AWAY POINTS

MANUFACTURER LABELING AND PACKAGING

All commercial containers of a controlled substance must be labeled with identification symbols designating the schedule in which the drug has been placed (§ 825). The symbols are generally C-I, C-II, C-III, C-IV, and C-V. Alternately, the symbol may be a “C” with the schedule designation inside it.

This symbol must be prominently located on the label or labeling of the commercial container. The symbol or labels must be clear and large enough to provide easy identification of the drug product’s schedule on inspection without removal from the shelf. The symbol on all other labeling shall be clear and large enough to afford prompt identification on inspection of the labeling (21 C.F.R. § 1302.04).

  TAKE-AWAY POINTS

REGISTRATION

Many of the narcotic laws that preceded the CSA provided for the control and accountability of controlled substances by means of a tax, much as alcohol is taxed today. The CSA, however, achieves control and accountability by requiring those who manufacture, distribute, or dispense a controlled substance, or who propose to engage in any of these activities, to register with the attorney general. Manufacturers and distributors must register annually. As for dispensers, the law allows the attorney general to determine the period of time for which registrations remain in effect as long as this period of time is not less than 1 year or more than 3 years. Under the current regulation (21 C.F.R. § 1301.13(d)), the registration for dispensers is effective for 3 years.

EXEMPTIONS

The CSA specifically allows the following persons to possess controlled substances without registration:

•  An agent or employee of any registered manufacturer, distributor, or dispenser of any controlled substance if such agent or employee is acting in the usual course of his business or employment

•  A common or contract carrier or warehouseman, or an employee thereof, whose possession of the controlled substance is in the usual course of his business or employment

•  An ultimate user who possesses such substance for a lawful purpose (§ 822(c))

Under the first exemption, pharmacists employed by a registered pharmacy or institution need not be individually registered. Therefore, the standard practice is for the pharmacy in which a pharmacist works to be registered with the DEA, but not for an individual pharmacist to be registered.

Individual Practitioners as Agents or Employees

An individual practitioner is defined as a physician, dentist, veterinarian, or other individual licensed or registered to dispense controlled substances in the jurisdiction in which he or she practices, but the term does not include a pharmacist, pharmacy, or institutional practitioner (21 C.F.R. § 1300.01(b)(17)). An individual practitioner must ordinarily be registered with the DEA to prescribe controlled substances. Under regulations amended in 1995, however, individual practitioners who are agents or employees of another individual practitioner, other than a mid-level practitioner (e.g., nurse practitioner, nurse midwife, physician assistant), who is registered to dispense controlled substances may, when acting within the normal course of their employment, administer or dispense—but not prescribe—controlled substances using the registration of the employer (in accordance with state law) (21 C.F.R. § 1301.22(b)).

If the individual practitioner is an agent or employee of a hospital or other institution, the individual practitioner may, when acting in the normal course of business or employment, administer, dispense, and prescribe controlled substances under the registration of the hospital or institution provided that

1.  The dispensing, administering, or prescribing is done in the usual course of professional practice;

2.  The individual practitioner is authorized or permitted to do so by the jurisdiction in which he is practicing;

3.  The hospital or other institution by whom he is employed has verified that the individual practitioner is so permitted to dispense, administer, or prescribe drugs within the jurisdiction;

4.  Such individual practitioner is acting only within the scope of his employment in the hospital or institution;

5.  The hospital or other institution authorizes the intern, resident, or foreign-trained physician to dispense or prescribe under the hospital registration and designates a specific internal code number for each intern, resident, or foreign-trained physician so authorized. The code number shall consist of numbers, letters, or a combination thereof and shall be a suffix to the institution’s DEA registration number, preceded by a hyphen (e.g., APO123456-10 or APO123456-A12); and

6.  A current list of internal codes and the corresponding individual practitioners is kept by the hospital or other institution and is made available at all times to other registrants and law enforcement agencies upon request for the purpose of verifying the authority of the prescribing individual practitioner. (21 C.F.R. § 1301.22(c))

Before 1995, this regulation was much more restrictive, authorizing only individual practitioners who were interns, residents, foreign-trained physicians, or physicians on the staff of a Veterans Administration facility to use the hospital or institutional DEA registration number. Now, however, any individual practitioner may do so, provided he or she meets the regulation’s requirements. Prescriptions issued by these individual practitioners are valid at community pharmacies and may be dispensed by community pharmacies. In practice, these prescriptions can present difficulties for community pharmacists who must attempt to ascertain the validity of questionable prescriptions and who, in some instances, cannot determine who wrote the prescription.

Other Exemptions from Registration

The regulations also exempt from registration officials of the armed services, public health service, or bureau of prisons, who are authorized to prescribe, dispense, or administer controlled substances in the usual course of their official duties. They may not purchase controlled substances, however. Furthermore, if they engage in private activities involving controlled substances, they must be individually registered (21 C.F.R. § 1301.23). Exemptions also are made for law enforcement officials engaged in the performance of their duties (21 C.F.R. § 1301.24).

ACTIVITIES THAT REQUIRE REGISTRATION

Each of the following independent activities requires a separate registration, except where regulations allow for “coincidental activities” (21 C.F.R. § 1301.13 (e)):

•  Manufacturing schedules I–V controlled substances

•  Distributing schedules I–V controlled substances

•  Reverse distributing controlled substances

•  Dispensing schedules II–V controlled substances or instructing

•  Conducting research with schedule I controlled substances

•  Conducting research with schedules II–V controlled substances

•  Conducting a narcotic treatment program (NTP) (including a compounder) using any narcotic drug listed in schedules II–V

•  Conducting chemical analyses with controlled substances

•  Importing controlled substances

•  Exporting controlled substances

The CSA defines each of the activities for which registration is necessary. Because the act requires registration according to the nature of the activity rather than the individual’s status, pharmacists must be cautious not to engage inadvertently in activities that constitute manufacturing or distributing because these activities have more costly and onerous storage, security, and recordkeeping requirements.

Dispensing

Under § 802(10) of the act, the term “dispense” means:

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. The term “dispenser” means a practitioner who so delivers a controlled substance to an ultimate user or research subject. (§ 802(10))

The term “practitioner” is then defined as:

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. (§ 802(21))

Thus, from the definition of practitioner, a pharmacy is a practitioner. Because a pharmacy delivers controlled substances to ultimate users, a pharmacy (including a pharmacist) is a dispenser and would register as such. The regulation defining the term dispenser confirms this logic by stating that a dispenser is an individual practitioner, institutional practitioner, pharmacy, or pharmacist. The broad definition of dispensing includes the functions of prescribing and administering. Therefore, when an individual practitioner prescribes or administers a controlled substance, that person is regarded by the law as dispensing the substance and registers as a dispenser.

The fact that a pharmacy is defined as a practitioner, which includes the function of prescribing, does not necessarily mean that a pharmacist can prescribe. Pharmacists may perform only those functions that state law authorizes them to perform, regardless of the federal definitions.

Although a practitioner by definition, a pharmacy is not an individual practitioner, nor is it an institutional practitioner. Regulations define the term “institutional practitioner” as

a hospital or other person (other than an individual) licensed, registered, or otherwise permitted, by the United States or the jurisdiction in which it practices, to dispense a controlled substance in the course of professional practice, but does not include a pharmacy (21 C.F.R. § 1300.01(b)(18)).

Pursuant to an institutional registration, the hospital pharmacy may dispense controlled substances without a separate registration, and hospital staff authorized by law may dispense, administer, or prescribe controlled substances to patients.

Regulations enacted in June 1993 specifically recognize mid-level practitioners as individual practitioners who may register as dispensers, providing state law has granted them independent or collaborative prescriptive authority (21 C.F.R. § 1300.01(b)(28)). Included in this group are individual practitioners other than physicians, dentists, veterinarians, or podiatrists, such as nurse practitioners, nurse midwives, nurse anesthetists, clinical nurse specialists, and physician assistants. Because state laws vary dramatically for mid-level practitioners regarding controlled substance prescribing authority, the DEA has published a reference table that represents the controlled substance prescribing authority for mid-level practitioners by discipline and the state in which they practice. This document can be found at: http://www.deadiversion.usdoj.gov/drugreg/practioners/mlp_by_state.pdf.

Most recently, the DEA has recognized that in some states pharmacists who are engaged in collaborative practice agreements may register as mid-level practitioners. Pharmacists in these states generally have the authority to administer, initiate, and modify drug therapy in accordance with collaborative practice requirements.

Mid-level practitioners not engaged in prescribing activities need not be separately registered if they are agents or employees of a registrant (e.g., a physician), provided that the registrant is not another mid-level practitioner. Coincidental activities, permitted under a dispensing registration include research and instructional activities however, mid-level practitioners may conduct research only to the extent expressly authorized by state law (21 C.F.R. § 1301.13(e)(l)(iii)).

Manufacturing

Under § 802(15) of the CSA, “manufacture” means the production, preparation, propagation, compounding, or processing of a drug, either directly or indirectly, either by extraction from natural origin or by chemical synthesis. Manufacture also includes any packaging, repackaging, labeling, or relabeling. The term does not include the activities of practitioners that are incidental to the administering or dispensing of controlled drugs within the course of their professional practice.

A manufacturer may lawfully distribute that substance or class of drugs it is registered to manufacture (21 C.F.R. § 1301.13(e)(l)(i)). Other coincidental activities to a manufacturer registration are chemical analysis and preclinical research.

On the basis of the definition of the term manufacture, pharmacists engaged in the ordinary practice of pharmacy need not worry about registering as manufacturers. Those engaged in compounding, repackaging, or relabeling controlled substances must be so concerned, however. The regulations allow a pharmacist to manufacture and distribute to other practitioners (without registering as a manufacturer) an aqueous or oleaginous solution or solid dosage form containing a narcotic substance in a preparation not exceeding 20% of the complete product (21 C.F.R. § 1301.13(e)(l)(iii)).

Manufacturing activities permitted by pharmacies under the CSA seem to differ from manufacturing under the FDCA, as interpreted by the FDA. FDA policy guidelines provide that a pharmacy that compounds and distributes a product to other practitioners is manufacturing and must register as such. The CSA would seem to permit pharmacies to do so without registering as a manufacturer, provided that the product does not exceed 20% of a narcotic substance.

Distributing

To “distribute” means to deliver (other than by administering or dispensing) a controlled substance (§ 802(11)). Wholesalers of course must register as distributors, as must reverse distributors (those distributors that handle unwanted, unusable, or outdated controlled substances acquired from another DEA registrant; 21 C.F.R. § 301.13). Practitioners registered to dispense may distribute, without being registered as distributors, controlled substances to other practitioners for the purpose of general dispensing by these practitioners to their patients, provided that

•  The practitioner to whom the drug is distributed is registered to dispense.

•  The distribution is recorded with the proper information by the distributing and receiving practitioners.

•  If the drug is a schedule I or II drug, the triplicate federal order form (DEA Form 222 or its electronic equivalent) is executed.

•  The total number of dosage units distributed does not exceed 5% of the total units of controlled substances distributed and dispensed in one year (21 C.F.R. §§ 1307.11(a)(1)(i), (ii), (iii), (iv)).

Practitioners who return controlled substances to the supplier or manufacturer are also exempt from registering as distributors under the regulations (21 C.F.R. § 1307.12), provided that a written record is maintained indicating

•  The date of the transaction

•  The name, form, and quantity of the substance

•  The name, address, and registration number, if any, of the person making the distribution

•  The name, address, and registration number, if known, of the supplier or manufacturer

A DEA Form 222 must be used for the return of any schedule I or II controlled substances.

Registered distributors (and manufacturers) are required to design and operate a system that is able to detect suspicious orders of controlled substances and inform the DEA upon discovery of suspicious orders. In 2005, the DEA established the Distributor Initiative Program to facilitate the enforcement of this requirement. For example, in 2007, the DEA charged Cardinal Health with distributing millions of dosage units of opioid drugs to rogue Internet pharmacies and community pharmacies that dispensed these drugs pursuant to nonlegitimate prescriptions. The DEA then suspended the operations of 7 of Cardinal’s 27 distribution facilities. Ultimately, Cardinal agreed to pay $34 million to settle the claims. The DEA also temporarily suspended the license of an AmerisourceBergen Distribution Center in 2007 and in the same year alleged that McKesson filled suspicious orders that it did not report. In 2012, the DEA suspended Cardinal’s authority to distribute controlled substances from a Florida distribution center, based on the distribution center supplying very large quantities of opioids to four area pharmacies.

Distributing Versus Dispensing (Constructive Delivery)

The DEA has taken the controversial position that a compounding pharmacy that delivers a compounded controlled substance medication to the prescribing practitioner, rather than the patient, for administration to the patient by the prescriber is distributing, not dispensing. In Wedgewood Village Pharmacy v. Drug Enforcement Administration, 509 F.3d 541 (D.C. Cir. 2007), a pharmacy challenged the DEA’s revocation of its registration, which the agency had revoked for two reasons. First, the DEA determined that the pharmacy was manufacturing, not compounding, and also distributing in excess of the 5% rule, by dispensing medications for veterinarians pursuant to prescriptions that were not written for an ultimate user. The veterinarians issued the prescriptions in their own names for general office use and would later administer the medications to horses where they were stabled. Second, the DEA determined that because the pharmacy delivered the medications to the veterinarians, not the patients (ultimate users), this constituted distributing rather than dispensing.

The court found for the pharmacy, vacating the revocation, and remanded the case back to the DEA for reconsideration. The court found the DEA’s analysis for its conclusion to revoke inadequate. Regarding that the prescriptions were written for office use, determined the court, requires that the DEA examine if this is necessary for veterinary practice. The court also found troubling the DEA’s conclusion that delivery to the veterinarians constitutes distributing, not dispensing. The court noted that the law § 802(10) defines dispensing as the delivery of a controlled substance to an ultimate user, including any compounding necessary for the deliver. Moreover, the law § 802(8) defines delivery as including actual, constructive, or attempted transfer. The court took issue with the DEA’s determination that constructive delivery could not include the act of delivering the compounded product to the practitioner.

On remand and after a hearing, the DEA again concluded in 2009 to deny the pharmacy’s registration. To avoid protracted litigation, the parties agreed to a settlement in May 2010 (http://www.wedgewoodpharmacy.com/news/press-room/wedgewood-pharmacy-s-dea-registration-to-dispense-controlled-substances-is-restored-0.html). The pharmacy agreed to abide by the DEA’s interpretation of the law, but specifically provided it does not agree with the DEA’s position.

Subsequently, the DEA warned pharmacies that compounding morphine, even pursuant to a prescription for a particular patient, and then delivering it to the prescribing physician for intrathecal administration to the patient is distributing, not dispensing, and that the pharmacy must register as a manufacturer. One pharmacy involved sued the DEA, challenging the agency’s position. The court, however, ruled that the DEA has not yet taken any enforcement action directly against the pharmacy and thus it does not have subject matter jurisdiction until there is final agency action (AnazaoHealth Corporation v. Holder, 2011 WL 41914 (M.D. Fla.)).

Because this issue is so important to pharmacy practice, several pharmacy organizations requested that the DEA reconsider its interpretation of constructive delivery in a 2010 joint letter to the DEA (https://www.ascp.com/sites/default/files/ASCP-JointPharmacyLetter-DEA-10282010.pdf). In 2014, Senate Bill 2825 entitled the “Ensuring Safe Access to Prescription Medication Act of 2014” was introduced, but was not successful. This bill sought to amend the CSA to allow a pharmacist to dispense a controlled substance prescription for a patient and deliver the drug to a practitioner for administration in the doctor’s office.

Conducting Research

As mentioned earlier, dispensers are allowed to conduct research with substances listed in schedules II through V without registering separately as researchers. Research using schedule I drugs, however, requires that the applicant submit a protocol with the application, including such information as

•  The name and qualifications of the investigator

•  The institutional affiliation

•  A description of the project

•  If the research is to be clinical, copies of the investigational new drug notice and a description of the security precautions to be implemented (21 C.F.R. § 1301.18)

Separate Registrations

Each principal place of business or professional practice where controlled substances are manufactured, distributed, or dispensed requires a separate registration (§ 822(e); 21 C.F.R. § 1301.12(a)). Thus, a chain pharmacy must have a registration for each store. It is not necessary, however, to have separate registrations for warehouses where controlled substances are stored by or for a registrant (unless the substances are distributed to locations other than the registrant’s). It also is not necessary for practitioners to maintain more than one registration when prescribing from more than one office, provided that the practitioner only prescribes controlled substances and does not administer, dispense, or store them in more than one office.

APPLICATIONS FOR REGISTRATION AND REREGISTRATION

No person may engage in an activity for which registration is required until the application for registration is granted and a Certificate of Registration is issued (21 C.F.R. § 1301.13(a)). This is an important consideration for those planning to start new pharmacies or to purchase existing pharmacies.

Each current registrant will receive in the mail a registration form from the DEA approximately 50 days before the expiration date on the existing registration certificate. The DEA advises that if the registrant has not received the form by 30 days before the expiration date, the registrant should promptly give notice and request the forms in writing from the branch DEA office. A corporation that owns or operates a chain of pharmacies may submit a single affidavit form (DEA Form 224b) rather than a separate form for each pharmacy registration.

Any person wishing to register with the DEA as a dispenser must complete DEA Form 224, which is available from the DEA’s website (http://www.deadiversion.usdoj.gov/drugreg/index.html#regapps). The form must be completed interactively online. Manufacturers, distributors, and NTPs must complete DEA Form 225, also available online.

MODIFICATION, TRANSFER, AND TERMINATION OF REGISTRATION

A registrant who wishes to modify the registration (e.g., change a name or address) may apply to the DEA online or in writing. If the modification is approved, a new certificate will be issued, and the registrant must maintain it with the old certificate until expiration (21 C.F.R. § 1301.51).

If a person (including natural person and corporation) dies, ceases legal existence, or discontinues the business or professional practice, the DEA must be notified and the registration terminated (21 C.F.R. § 1301.52(a)). No registration can be assigned or transferred except with the approval of the DEA after submitting a written request and providing full details of the proposed transfer (21 C.F.R. § 1301.52(b)). If the registrant discontinues business (and does not transfer the business to another), the certificate of registration must be returned to the DEA, together with any unexecuted order forms (21 C.F.R. § 1301.52(c)). Any controlled substances in the registrant’s possession must be disposed of in accordance with DEA requirements.

When a pharmacy is sold to another person as an ongoing business and wishes to transfer the registration to another person, the registrant must submit the proposal for transfer in person or by registered or certified mail, return receipt requested, to the special agent of the DEA in charge in the registrant’s area. The proposal must be submitted at least 14 days in advance of the planned transfer, unless this requirement is waived by the special agent in charge. The following information must be included:

•  The name, address, registration number, and authorized business activity of the registrant discontinuing business and that of the person acquiring the business

•  Whether the business activities currently registered will be continued at the present address or at another specified address

•  Whether the transferor has a quota to manufacture or procure any controlled substance in schedules I or II

•  The date on which the transfer of controlled substances will occur

Unless the regional administrator of the DEA notifies the transferor that the transfer may not occur, the transferor may distribute the controlled substances to the transferee. A complete inventory of all controlled substances must be taken on the date of transfer, and transfers of any schedule I or II substances must be pursuant to DEA Form 222 (or electronic equivalent). Furthermore, all required records must be transferred on the date of transfer. Although responsibility for the accuracy of the records remains with the transferor, responsibility for their custody and maintenance rests with the transferee (21 C.F.R. § 1301.52(d)).

DENIAL, REVOCATION, OR SUSPENSION OF REGISTRATION

The attorney general may deny a practitioner-applicant a registration to dispense or conduct research with controlled substances if it is determined that the registration would not be in the public interest (§ 823(f)). In this determination, the attorney general must consider:

•  The recommendation of the appropriate state licensing board

•  The applicant’s experience

•  The applicant’s conviction record with respect to controlled substances

•  The applicant’s compliance with applicable state, federal, or local laws

•  Any other conduct by the applicant that may threaten the public health and safety

A registration to manufacture, distribute, or dispense controlled substances may be suspended or revoked by the attorney general on a finding that the applicant (§ 824(a)):

•  Has materially falsified any application

•  Has been convicted of a felony relative to controlled substances

•  Has had a state license or registration suspended, revoked, or denied

•  Has committed acts inconsistent with public interest (as described earlier)

•  Has been excluded from participation in a Medicaid or Medicare program

  TAKE-AWAY POINTS