Strike Two: GAO Releases Statement About DEA’s Administration of the Quota Process and Lack of Coordination with FDA in Setting Quotas for Schedule II Controlled Substances

May 8, 2015

By Karla L. Palmer

Earlier this week, the GAO released the Testimony of Marcia Crosse, Director, Health Care, before the Senate Caucus on International Narcotics Control.  The statement, titled, “Controlled Substances: DEA Needs to Better Manage its Quota Process and Improve Coordination with FDA,” provides a summary of key portions of a relatively scathing and detailed GAO report on the DEA quota process dated February 2, 2015 (but  released on March 4, 2015), and blogged on here.  The statement also provides selected updates concerning steps that DEA and FDA have taken since the issuance of that February  2015 report.  The statement highlighted two significant issues discussed in the report:

(1) DEA’s failure to maintain appropriate staffing and timeliness in administration of the quota process: 

Ms. Crosse emphasized that, notwithstanding yearly quota applications, DEA has not responded to annual bulk manufacturing or procurement quotas within time frames required by regulations for any year from 2001 through 2014.  GAO further found that DEA does not have adequate protocols, policies, training, or internal controls to ensure reliability of data (in DEA’s YERS/QMS system) it uses to track applications and record decisions.  DEA attributed this shortfall to, among other things, inadequate staffing, stating specifically that the Agency has been unable to find qualified candidates who are able to pass the necessary background checks, and, in addition, qualified candidates have declined job offers.  DEA stated, however, that they “ensure consistency in their [quota] decision-making by having the Deputy Assistant Administrator in the Office of Diversion Control review and authorize every quota decision that is made.”  GAO noted that, given the volume of applications in a given year (i.e., 3000 in 2012), it is “unreasonable to assume that one senior manager can devote sufficient time to review these decisions…” DEA’s lack of written guidance also “poses a risk to the continuity” of quota operations should responsible DEA personnel leave or be reassigned. 

Manufacturers cited DEA’s late quota decisions as causing or exacerbating some shortages of their drugs.  GAO stated that, although (since 2012) FDASIA requires DEA to respond to supplemental quota applications within 30 days, DEA responded to only 21 percent of supplemental applications within 30 days, suggesting that this 30-day requirement could “pose a challenge during a drug shortage.”  DEA asserted to GAO that quotas cannot cause shortages because the Agency authorizes quota at the basic class level of a substances (e.g., amphetamine, morphine), and not by specific drug product.  GAO disagreed that actions DEA takes in setting quotas at the class level would have no bearing on the drug products manufactured with such substances.  Specifically, “while the manufacturers are ultimately responsible for what the manufacturer with the quota authorized by DEA, their decisions are made within the confines of the amount and timing of the quota granted by DEA.”  GAO noted that, “because of concerns with the reliability of DEA’s data, among other things, we could not confirm whether DEA’s lack of timeliness in establishing quotas has caused on exacerbated shortages.”  Ms. Crosse’s statement noted that DEA  indicated that it has already taken steps consistent with GAO recommendations in the February 2015 report, but no further information was provided.      

(2) Lack of Coordination of activities between DEA and FDA to prevent and mitigate shortages of drugs containing controlled substances.

The GAO report also cited several barriers that may hinder DEA and FDA from coordinating effectively on quota-related drug shortages.  For example, DEA and FDA’s definitions of a drug shortage differ.  FDA considers supply and demand for the drug, and whether there is enough supply to meet demand by evaluating potentially interchangeable substitutes for the particular drug.  DEA believes there is no shortage as long as there is quota available to manufacture a given controlled substance, regardless of manufacturer, strength or available formulation.  Although GAO notes there has not been a reported shortage of a controlled substance since passage of FDASIA in 2012, that law requires the agencies to coordinate on what exactly is a drug shortage.  GAO states it is unclear whether the two agencies will be able to do so successfully.  It also asserts that another barrier to collaboration is DEA’s lack of compatible policies and procedures should FDA notify DEA of a shortage.  Although FDA established such policies and procedures concerning coordination on shortages in 2014, DEA has not, and does not plan to address this issue.  Notwithstanding, on March 24, 2015, FDA and DEA finalized a Memorandum of Understanding to facilitate sharing of proprietary information between the agencies, which GAO recommended in its February 2015 report.  However, contrary to  its recommendation, GAO noted that the MOU failed to specifically outline what information they will share and the timeframes for sharing information in response to a real or potential shortage.