April 20, 2020

The Drug Enforcement Administration (DEA) issued new guidance effective April 10, 2020 addressing how controlled substances should be handled at DEA-registered hospitals and clinics. The purpose of the new guidance is to reduce burdens on medical facilities during the pandemic emergency by, for instance, making it easier to treat patients at satellite locations or reducing restrictions on the dispensation of controlled substances forming a part medical treatment to meet rapidly increasing health care demands. This guidance will remain in place until the DEA determines that the pandemic emergency has ended.

The guidance provides three exceptions to regulations with which DEA-registered hospitals and clinics must typically comply. The first exception permits these facilities to use controlled substances at satellite locations so long as the following conditions are met:

  • The satellite location was set up to provide temporary services connected to the public health emergency resulting from the COVID-19 pandemic.
  • The satellite location is authorized by the state in which it operates to handle controlled substances and is doing so in a manner permitted by the state.
  • The hospital/clinic maintains on site all records required by the DEA regulations with respect to controlled substances received, stored, administered, dispensed, distributed, and otherwise disposed of by the satellite location.
  • The hospital/clinic ensures that the satellite location maintains physical security of the controlled substances it handles in compliance with the DEA regulations, and that the satellite location otherwise maintains effective controls against diversion.
  • The hospital/clinic notifies the local DEA field office in writing (by email or other electronic submission) that it is utilizing a satellite location that will handle controlled substances. This notice must meet several conditions also set forth in the issued guidance.
  • The satellite location handling controlled substances must be a corporate affiliate of or owned by the entity that holds the DEA registration of the hospital/clinic at the registered location. If such satellite location either is not a corporate affiliate of or owned by the entity that holds the DEA registration of hospital/clinic at the registered location, then the hospital/clinic that utilizes such satellite location must enter into a written agreement that creates an agency relationship with the satellite location, among satisfying other requirements.

The second exception permits narcotic treatment programs (NTPs) to accept deliveries of narcotics without having to provide a signature at the time of delivery. The goal of this exception is to limit the face-to-face interactions that spread COVID-19. This exception applies so long as the following conditions are met:

  • The narcotics distributor has obtained the name and title, if any, of the NTP's licensed practitioner or other authorized individual accepting the delivery of the narcotics on behalf of the NTP and maintains a record of this information.
  • The person making the delivery on behalf of the distributor witnesses and confirms that the accepting individual has taken physical possession of the narcotic drugs.
  • After the delivery of the narcotic drugs to the NTP, a licensed practitioner employed by the NTP or other authorized individual designated in writing signs the invoice confirming receipt of the narcotics and places his or her specific title (if any) on the invoice.
  • Within seven days after delivery of the narcotics, the NTP returns the signed invoice to the distributor in one of the following ways: sending a hard copy by regular mail or courier; sending a copy by fax; or scanning a copy and sending the image file by email, text, or other electronic means.
  • If the narcotics distributor does not receive a signed copy within this timeframe, then it must notify the local DEA office.

The third exception allows DEA-registered dispensers – including hospitals, pharmacies, or physicians – to distribute controlled substances beyond the normal 5 percent annual limit without having to register as a distributor.

Generally, a registered dispenser may distribute controlled substances to another dispenser for the purpose of general distribution to patients, so long as the amount a dispenser distributes to other dispensers during a calendar year does not exceed 5 percent of the total number of dosage units of all controlled substances that the dispenser distributes during that year. With this exception, all distributions made from January 1, 2020, until the date this exception ends will be excluded from consideration in applying this 5 percent rule. And once this exception ends, dispensers need only consider distributions made from that date through the remainder of the calendar year for meeting the 5 percent rule.

The contours of these exceptions are complex and require a detailed knowledge of how they are couched within the larger regulatory framework that governs DEA-registered hospitals and clinics. If you have questions about the applicability of these recently issued exceptions or any other issues that relate to the health care industry – whether COVID-19 related or not – please contact your Much attorney.

This article contains material of general interest and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. Under applicable rules of professional conduct, this content may be regarded as attorney advertising.