Chicago, IL
September 21-23, 2005

Wednesday, September 21, 2005

• Welcoming Remarks
• Introductions and Conference Objectives
• Drug Diversion Trends
• New Risks Management Plans / Quotas Issues
• Domestic Internet Investigations
• Internet Pharmacy Data

Thursday, September 22, 2005

• Drug Evaluation and Quota Issues
• Quota Issues
• ARCOS Year-end Reports
• Registration Modernization
• Industry Concerns Panel
• Pseudoephedrine Update
• Controlled Substances Ordering System (CSOS)Project Status
• Inspections - Record Keeping - Security Panel

Friday, September 23, 2006

• Regulatory Updates
• Controlled Substance Reform Act of 2005
• Closing Remarks

Wednesday, September 21, 2005

Special Agent in Charge (SAC) Richard Sanders of the Chicago Field Division opened the 12^th Pharmaceutical Industry Conference. The meeting was held September 21-23, 2005 at the Mid-America Club in Chicago, IL. Approximately 130 pharmaceutical industry representatives from 62 companies participated in the meeting. SAC Sanders briefed the attendees on his background and career with the Drug Enforcement Administration (DEA) and discussed some of the problems the Chicago Field Division faces in fighting the war on drugs.

Denise Curry, Deputy Director, Office of Diversion Control (OD) stated that the purpose of the conference is to provide a mechanism to strengthen the communication ties and facilitate continued cooperation between the DEA and the pharmaceutical industry. Ms. Curry provided the latest statistics regarding the abuse of prescription drugs, the forms of diversion and an overview of what DEA is doing to investigate rogue internet pharmacies.

Elizabeth A. Willis, Ed.D. Chief, Pharmaceutical Investigations, Office of Enforcement Operations presented Drug Trends. Dr. Willis acknowledged the industry for continuing to maintain an excellent relationship with DEA. A historical account of the abuse patterns was given. As of 2003, 22 million Americans suffer from substance dependence or abuse. Abuse of non-medical use of prescription drugs ranks second only to marijuana as the most prevalent category of drug use. Historically abusers of prescription drugs use various methods to divert the drugs from legal channels; however the most current diversion trend is the internet. Beginning in the 2000’s, the internet has become the major source of diversion. Organized crime groups are becoming more involved in the diversion of controlled substances and are using the internet to facilitate diversion. The internet is presenting new investigative problems for DEA. With the advent of diversion via the internet it is even more vital to maintain a working partnership between DEA and the pharmaceutical industry.

Christine Sannerud, Ph.D., Chief, Drug and Chemical Evaluation Section discussed the Consolidated Appropriations Bill of 2005. The Consolidated Appropriations Bill of 2005 (Public Law No. 108-447, 118 Stat. 2809) explains DEA’s role in reviewing new pharmaceutical products for their abuse potential. The Bill was enacted on December 8, 2004 and became effective on June 6, 2005. Section 110 of the bill prohibits DEA from establishing a procurement quota prior to the approval of a new drug application (NDA) or an abbreviated new drug application (ANDA) for drug products containing a Schedule I or II controlled substance. Section 111 provides that the prohibition in Section 110 does not apply to a NDA or ANDA for which DEA has "reviewed and provided public comments on labeling, promotion, risk management plans, and any other documents. The Bill lists documents necessary for DEA to review drugs which include: Labeling, Promotional Material, Risk Management Plans (RMPs), Educational Material for Products without RMPs, Distribution Plans for Products without RMPs, Summary Documents submitted for the NDA or ANDA and covering: Abuse and Diversion, Pharmacology, Chemistry and Biopharmaceutics. Companies should keep in mind that the Bill did not specify how DEA should obtain documents from companies. Currently, DEA is working with the Food and Drug Administration (FDA) to try and get these documents; however because there is proprietary information involved DEA is facing some delays. DEA is now in the process of reaching out to companies directly to obtain the information. The Appropriations bill does not mandate companies to give the information to DEA, however to issue quotas DEA will require the same information. All information being requested by DEA is already compiled by companies. As with quota requests, DEA will continue to keep all information provided confidential. Companies should keep in mind that DEA needs the information as far in advance as possible to allow for an adequate review. The length of review will depend upon the amount of material received. It is important to remember DEA can only comment on final products not drafts meaning FDA must approve the drug before DEA can give a final opinion. Appropriations are included in the FY06 budget. DEA’s proposed implementation plan is to post comments only on the website. This plan is currently under review by the Department of Justice (DOJ) and DEA’s Office of Chief Counsel.

Elizabeth A. Willis, Ed.D. Chief, Pharmaceutical Investigations, Office of Enforcement Operations introduced Diversion Investigator (D/I) Charles Carpenter, DEA Greensboro. D/I Carpenter presented a closed Internet Investigation (Crown Drug) that DEA conducted. The Crown Drug case took place in Pittsburgh, PA, but originated out of the DEA Greensboro office with unusual orders reported to DEA by suspicious distributors. D/I Carpenter discussed with attendees the importance of their role in reporting suspicious orders to DEA and how DEA relies on industry to monitor orders and know their customers.

Mike Mapes, Chief, E-Commerce Section presented on Internet Pharmacies. DEA is encountering two types of Internet pharmacies: domestic and foreign. Domestic Internet pharmacies differ in type, some are related to existing pharmacies typically independent, however this does not mean they are illegitimate. Others are totally unrelated to real brick and mortar pharmacies. Issues registrants should consider with orders they are receiving include: frequency, size, locations, percent controlled vs. non-controlled and payment method. The requirements for a distributor registration were provided including maintaining effective controls to protect against diversion. Case examples were given. The American Medical Association (AMA) as well as the Federation of State Medical Boards (FSMB) have both provided guidance prescribing via the Internet. Mr. Mapes discussed the issue of suspicious orders and the requirements to report those to DEA when discovered. DEA can not define a suspicious order. It is in the registrants hands to determine and decide to report them to DEA. Examples of recent internet pharmacy takedowns by DEA were given.

Thursday, September 22, 2005

Christine Sannerud, Ph.D., Chief, Drug and Chemical Evaluation Section provided an update on the current scheduling actions. Hydrocodone products are being reviewed proposing to move the products from Schedule III into Schedule II. This initiative has been ongoing for 2 years and currently the proposal is at Health and Human Services (HHS) pending medical review. A petition to reschedule methylphenidate HCl (Concerta®) from Schedule II to CIII is being reviewed. Zopiclone, a sedative for insomnia, approved by the Food and Drug Administration (FDA) in January 2005 is currently on the market in Schedule IV. Pregabalin used for neuropathies pain, approved by FDA was placed in Schedule V in July 2005. On July 29, 2005, DEA published a Federal Register proposal to place Embutramide into Schedule III. Embutramide is a central nervous system depressant used primarily as an anesthetic. In conjunction with the Anabolic Steroid Control Act of 2004, about 36 new steroids were placed under control into Schedule III, making a total of 59 controlled steroids. Carisoprodol scheduling is on hold for control action awaiting concurrence from HHS. Ketamine, a Schedule III central nervous system depressant, is being considered for possible control under the 1971 Psychotropic Convention by the United Nations.

Susan Carr, Deputy Chief, Drug and Chemical Evaluation Section covered the differences between research and product development by explaining the Clarification of Coincident Activities for Manufacturers. When manufacturing moves beyond the scope of research and becomes product development, then those manufacturing activities are no longer considered to be coincident. The company must then meet requirements for registration as a manufacturer. Ms. Carr provided the purpose of quotas which are:

Provide for legitimate need of controlled substances, Restrict the manufacture and procurement to those manufacturers registered by DEA, Limit the quantity of drugs in Schedules I and II which may be manufactured or produced, Provide adequate inventories. As defined in 21 CFR, there are 3 types of quotas 1) Aggregate Production Quotas (21 CFR 1303.11 and 1303.13), 2) Individual Manufacturing Quotas (21 CFR 1303.21 through 1303.26) and 3) Procurement Quotas (21 CFR 1303.12). Descriptions of the quotas as well as the procedures for establishing and applying for the quotas can be found in the CFR.

Susan Carr, Deputy Chief, Drug and Chemical Evaluation Section provided an overview of the ARCOS year-end reports. Ms. Carr covered the status of the removal of reporting requirements to ARCOS. Changes to reporting requirements will be handled through "notice and comment" in the Federal Register (FR). A draft FR document entitled "Manufacturing Transaction Reporting for Controlled Substances" will streamline reporting requirements for manufacturers by: Eliminating manufacturing transaction codes from the ARCOS system, Replacing the removed ARCOS codes with YER and Reducing the quarterly reporting requirements for those registered to import opium, poppy straw concentrate, and coca leaves.

Frank Moreno, Chief, Business Process Modernization Unit provided an update to the modernization project undertaken by the DEA’s Registration Section in 2002. The goals of the modernization project include: Improving DEA’s monitoring and control systems, improving service to the registrants and a reduction in cost. The most recent improvements to the section include the availability of online applications, duplicate certificates and reporting forms, improved Call Center performance, improvements in printed forms (forms on demand), online electronic reporting (e.g. ARCOS EDI), and quicker response times (e.g. six weeks to six minutes for some renewal applications). Some of the new features to come in the modernization project include: Online Import Export Reporting, Online Quota Reporting, Online Customer Support (chat room), Portal for Registrants (one stop shopping), Integration of the registration database with telephone system for improved Call Center support.

Participants on the Industry panel included Anita Ducca (Healthcare Distribution Management Association), Kevin Nicholson (National Association of Chain Drug Stores), Kim Shaw (Abbott Laboratories), and Scott Danner (Strong Pharmaceuticals). Participants provided their associated industries concerns relating to DEA.

Scott Collier, Chief, Dangerous Drugs and Chemicals Section provided the current trends in methamphetamine manufacturing and abuse patterns. The abuse of methamphetamine is a worldwide problem, but the majority of abuse is concentrated in North America and Asia. Mr. Collier discussed the types of methamphetamine (crystal, powder, etc.) and the reasons for its abuse. Currently, every state except one in the Northeast has had a methamphetamine lab seized. The majority of labs seized in the country are small toxic labs, but the majority of methamphetamine is produced in superlabs. Mr. Collier provided examples of the common household products used to manufacture methamphetamine with the most common ingredient being over the counter drug products containing pseudoephedrine. Currently, the chemical control strategy makes it as difficult as possible to manufacture methamphetamine. In an effort to make it even more difficult to obtain the ingredients necessary many states have either scheduled or restricted sales of pseudoephedrine drug products. As of September 2005, 21 states have enacted legislation and another 28 have proposed legislation to restrict sales.

Mike Mapes, Chief, E-Commerce Section provided an update on the Controlled Substance Ordering System (CSOS). The final rule was published April 1, 2005 and became effective May 31, 005. It should be noted that using the CSOS system is optional and there is no separate registration fee to utilize the system. Companies wishing to enroll to participate in CSOS can do it on the web at www.DEAecom.gov. Background information on the project, all requirements and contact information for the help desk are also provided on the site.

Jenny Melton, McKesson Corporation discussed CSOS participation statistics; approximately 1,700 applications have been received by DEA and over 2,200 certificates have been issued. As of September 2005, no CSOS transactions have been processed. Ms. Melton provided the steps for a company to take if they wish to participate in CSOS. These steps as well as additional information on CSOS can be located at DEA’s e-commerce website (www.DEAecom.gov).

Acting Diversion Program Manager (DPM) Jim Portner, Diversion Investigators (D/Is) Tim Lenzi and Paul Galvin sat on the Inspections, Record Keeping and Security Panel. DEA conducts scheduled investigations for the purpose of: Verifying compliance with record keeping and security regulations of the CSA (Title 21, CFR, Part 1300), Verifying that corrective procedures have been put in place to correct past problems, and Maintaining integrity of the closed system for legitimate distribution of pharmaceutical controlled substances.

Friday, September 23, 2005

Patricia Good, Chief, Liaison and Policy Section provided the regulatory update.

Ms. Good discussed changes to the Diversion Control Fee Account. The change will require that chemical and drug distributors pay the same registration fee. DEA is currently in the process of determining security changes for List I chemicals. Effective January 14, 2005 the Chemical Mixtures rule established concentration limits for chemical mixtures containing any of 27 List I and List II chemicals. If a mixture is at or below the established concentration limit, then the mixture is exempt from regulation. Automatic exemptions to the rule are waste materials regulated by EPA, fully formulated paints and coatings and harvested plant material. Effective September 12, 2005, Theft and Loss regulation changed reporting to within 1 business day in writing to local DEA office. There are two ways to do these initial theft/loss reports; a DEA-106 electronically which satisfies initial requirement or if there are not enough details to complete the 106, simply submit the existing details in writing. DEA encourages electronic reporting as it makes simplifies reporting for registrants and makes DEA’s database more reliable and accurate.

Mark Via, Acting Chief, Import/Export Unit spoke on the Controlled Substances Export Reform Act of 2005. The Controlled Substances Reform Act of 2005 was signed into law on August 2, 2005. This law allows for the export of controlled substances from the United States to a country for subsequent export from that country to a second country. The promulgation of regulation is necessary to implement this new law, which is currently being drafted by DEA. The new regulations are expected to be published during 2006.

Patricia Good, Chief, Liaison and Policy Section thanked attendees for traveling to Chicago. Ms. Good encouraged attendees to continue to be cooperative in protecting the drugs they handle from getting into the wrong hands. The meeting concluded.