Drug Enforcement Administration: Additional Actions Needed to Address Prior GAO Recommendations
Published: 2016-06-22T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: DEA administers and enforces the CSA to help ensure the availability of controlled substances, including certain prescription drugs, for legitimate use while limiting their availability for abuse and diversion. The CSA requires DEA to set quotas that limit the amount of certain substances that are available in the United States. The CSA also requires those handling controlled substances to register with DEA. In addition, DEA works to disrupt and dismantle major drug trafficking organizations and uses confidential informants to help facilitate its investigative efforts.
This testimony addresses DEA's efforts to address prior GAO recommendations concerning: (1) administration of the quota process, (2) information provided to registrants on their roles and responsibilities under the CSA, and (3) compliance with guidelines regarding confidential informants. This statement is based on findings from three GAO reports issued during 2015, and selected status updates from DEA through June 2016. In its prior work, GAO analyzed quota data, surveyed DEA registrants, reviewed DEA policy documents and interviewed DEA officials. For selected updates, GAO reviewed DEA documentation and held discussions with agency officials.
section_title: What GAO Found
paragraphs: In three reports issued during 2015, GAO made eleven recommendations to the Drug Enforcement Administration (DEA) related to administering the quota process for controlled substances, providing information and guidance to registrants, and complying with guidelines for overseeing confidential informants. As of June 2016, DEA had taken some actions to address these recommendations but had fully implemented only two of them.
Administering the quota process. In February 2015, GAO found that DEA had not effectively administered the quota process that limits the amount of certain controlled substances available for use in the United States. For example, manufacturers apply to DEA for quotas needed to make drugs annually. GAO found that DEA did not respond within the time frames required by its regulations for any year from 2001 through 2014, which, according to some manufacturers, caused or exacerbated shortages of drugs. GAO recommended that DEA take seven actions to improve its management of the quota process and to address drug shortages. In March 2015, DEA implemented one recommendation to finalize an information sharing agreement with the Food and Drug Administration regarding drug shortages. In June 2016, DEA implemented a second recommendation strengthening internal controls in the quota system. DEA has not fully implemented the other five recommendations. In October 2015, DEA identified steps it planned to take, including developing performance standards for responsiveness to manufacturers, but has not yet completed these actions.
Providing information to registrants. In June 2015, based on four nationally representative surveys of DEA registrants, GAO reported that many registrants were not aware of various DEA resources, such as manuals for pharmacists and practitioners. In addition, some distributors, individual pharmacies, and chain pharmacy corporate offices wanted improved guidance from, and additional communication with, DEA about their roles and responsibilities under the Controlled Substances Act (CSA). GAO recommended that DEA take three actions to increase registrants' awareness of DEA resources and to improve the information DEA provides to registrants. In April 2016, DEA reported that it had taken some steps towards addressing these recommendations, such as developing web-based training and updating the Pharmacist's Manual to reflect new regulations. However, DEA did not mention plans to develop and distribute additional guidance for distributors or pharmacies and therefore has not yet fully implemented GAO's recommendations.
Compliance with confidential informant guidelines. In September 2015, GAO reported that DEA's confidential informant policies were not fully consistent with provisions in the Attorney General's Guidelines . For example, DEA did not fully address the requirements to provide the informant with written instructions about authorized illegal activity and require signed acknowledgment from the informant. GAO recommended that DEA update its policy and corresponding monitoring processes to explicitly address these particular provisions in the Guidelines. According to an April 2016 memo and subsequent follow up, DEA has revised its policy accordingly, and it is undergoing internal processing, which is expected to be completed in summer 2016. Until GAO can review the new policy and verify that it complies with the Guidelines, this recommendation remains open.
section_title: What GAO Recommends
paragraphs: GAO previously made eleven recommendations to DEA related to the quota process, guidance to registrants, and confidential informants. DEA generally agreed with and has begun taking actions to address the recommendations, and has so far fully implemented two.

section_title: Letter
paragraphs: I am pleased to be here today to discuss our past work examining specific  activities related to the Drug Enforcement Administration’s (DEA) efforts  to prevent abuse and diversion of controlled substances and the agency’s  use of confidential informants.
The Centers for Disease Control and Prevention (CDC) has declared that  the United States is in the midst of an epidemic of prescription drug  overdose deaths. In 2013, more than 22,000 Americans died from drug  overdoses attributable to prescription drugs, and most of those deaths— more than 16,000—were attributable to prescription opioid pain relievers.  While these prescription drugs have legitimate purposes and are safe  when taken as directed, they also can be misused, and pose a potential  for abuse and addiction as well as being diverted for illicit uses.
Multiple federal agencies have responsibility for addressing the misuse,  abuse, and diversion of prescription drugs through prevention, treatment,  and enforcement activities. In particular, DEA has a key role as it  enforces the Controlled Substances Act (CSA). The CSA was enacted in  1970 to regulate and facilitate the use of controlled substances, including  certain prescription drugs such as opioid pain relievers, for legitimate  medical, scientific, research, and industrial purposes while preventing  them from being diverted for illegal uses. The CSA requires DEA to  maintain a closed system of distribution, which includes limiting the  amount of certain controlled substances that are available by setting  quotas. Various CSA provisions also require persons who handle  controlled substances to register with the DEA, including businesses that  import, export, manufacture, or distribute controlled substances; health  care practitioners, such as physicians, licensed to dispense, administer,  or prescribe them; and pharmacies authorized to fill prescriptions. These  DEA registrants have certain responsibilities under the CSA and its  implementing regulations for preventing abuse and diversion of controlled  substances.
As the nation’s lead federal agency dedicated to drug law enforcement,  DEA also works to disrupt and dismantle the leadership, command,  control, and financial infrastructure of major drug-trafficking organizations.  DEA uses confidential informants to help facilitate its investigative efforts,  and the Attorney General has issued guidelines to help ensure  appropriate oversight of informants.
My testimony today summarizes DEA’s progress addressing  recommendations from our prior work on DEA’s efforts to prevent abuse  and diversion of prescription drugs and to ensure accountability of  confidential informants. Specifically, this testimony addresses key  findings, recommendations, and DEA’s efforts in three areas:  1.  DEA’s administration of the quota process for controlled substances,  and its efforts to address drug shortages;  2.  the extent to which DEA has provided information to its registrants  regarding their roles and responsibilities for preventing abuse and  diversion of controlled substances; and  3.  the extent to which DEA’s policies regarding the use of confidential  informants is consistent with the Attorney General guidelines.
This statement is based on three reports related to DEA that we issued  from February 2015 to September 2015, as well as information DEA  provided from March 2015 through June 2016 on its progress in  implementing recommendations from those reports. For our past work on  DEA’s administration of the quota process, we reviewed DEA’s  regulations and other agency documentation and analyzed data from a  stratified random sample of 2011 and 2012 source documents from  DEA’s Year-End Reporting and Quota Management System  (YERS/QMS), which is the official record for the quota process. We also  interviewed officials from DEA, the Food and Drug Administration (FDA),  organizations representing patients and providers, and drug  manufacturers. For our prior work on DEA registrants, we administered  nationally representative web-based surveys to DEA-registered  distributors, individual pharmacies, chain pharmacy corporate offices, and  practitioners. We also interviewed officials from DEA, 26 national  associations and other nonprofits, and 16 government agencies in four  states representing different geographic regions with varying overdose  death rates. For our work on confidential informants, we reviewed DEA’s  and other federal law enforcement agencies’ documented policies and  monitoring processes and interviewed agency officials about their  practices. We also visited agencies’ field offices in three locations chosen  based on the numbers of informants overseen, among other factors.  Further details on the scope and methodology for our previously issued  reports are available within each published product. To determine DEA’s  progress in implementing the recommendations from our prior work, we  reviewed DEA documentation and held follow up discussions with DEA  and Department of Justice (DOJ) officials. We conducted the work on  which this statement is based in accordance with generally accepted  government auditing standards. Those standards require that we plan  and perform the audit to obtain sufficient, appropriate evidence to provide  a reasonable basis for our findings and conclusions based on our audit  objectives. We believe that the evidence obtained provides a reasonable  basis for our findings and conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Quotas for Controlled Substances
paragraphs: DEA establishes quotas for the maximum amount of each basic class of  schedule I and II controlled substances—such as amphetamine or  morphine—that can be produced each year in the United States. DEA  also establishes quotas for individual manufacturers, who must apply to  DEA to obtain quotas for specific classes of controlled substances. The  CSA and DEA’s implementing regulations specify dates by which DEA  must propose and establish its quotas. The quotas that DEA establishes  each year are required to provide for the estimated medical, research,  and industrial needs of the United States. In setting quotas, DEA  considers information from many sources including manufacturers’  production history and anticipated needs from manufacturers’ quota  applications and past histories of quota granted for each substance from  YERS/QMS, which is DEA’s system for tracking and recording quota  applicants and decisions.
Both DEA and FDA have important responsibilities in preventing and  responding to shortages of drugs containing controlled substances  subject to quotas. In addition to preventing diversion, DEA works to  ensure that an adequate and uninterrupted supply of controlled  substances is available for legitimate medical and other needs. As part of  its mission, FDA works to prevent, alleviate, and resolve drug shortages.  The Food and Drug Administration Safety and Innovation Act (FDASIA),  enacted in 2012, contains provisions that require DEA and FDA to  coordinate their respective efforts during shortages of drugs containing  controlled substances subject to quotas. When FDA is notified of a supply  disruption of certain drugs that contain controlled substances subject to  quotas, FDASIA requires that FDA request that DEA increase quotas  applicable to that controlled substance, if FDA determines that it is  necessary. Similarly, when FDA has determined that a drug subject to  quotas is in shortage in the United States, manufacturers may submit  quota applications requesting that DEA authorize additional quota for that  substance. FDASIA requires that DEA respond to these requests from  manufacturers within 30 days.
section_title: DEA Registrants
paragraphs: The CSA requires businesses, entities, or individuals that import, export,  manufacture, distribute, dispense, conduct research with respect to, or  administer controlled substances to register with the DEA. As of  December 2014, there were over 1.5 million registered distributors,  pharmacies, and practitioners; more than 1.4 million of these registrants  were practitioners.
DEA registrants must comply with a variety of requirements imposed by  the CSA and its implementing regulations. For example, a registrant must  keep accurate records and maintain inventories of controlled substances,  among other requirements, in compliance with applicable federal and  state laws. Additionally, all registrants must provide effective controls and  procedures to guard against theft and diversion of controlled substances.  Examples of some of the specific regulatory requirements for distributors,  pharmacists, and practitioners include the following:
Distributors: Registrants must design and operate a system to  disclose suspicious orders of controlled substances, and must inform  the DEA field division office in the registrant’s area of suspicious  orders when the registrant discovers them.
Pharmacists: While the responsibility for proper prescribing and  dispensing of controlled substances rests with the prescribing  practitioner, the pharmacist who fills the prescription holds a  corresponding responsibility for ensuring that the prescription was  issued in the usual course of professional treatment for a legitimate  purpose.
Practitioners: Practitioners are responsible for the proper prescribing  and dispensing of controlled substances for legitimate medical uses.  A prescription for a controlled substance must be issued for a  legitimate medical purpose by an individual practitioner acting in the  usual course of that person’s professional practice.
It is important for registrants to adhere to their responsibilities under the  CSA because they play a critical role in the prescription drug supply  chain, which is the means through which prescription drugs are ultimately  delivered to patients with legitimate medical needs. Although prescription  drugs are intended for legitimate medical uses, as shown in figure 1, the  prescription drug supply chain may present opportunities for the drugs to  be abused and diverted. For example, an individual may visit multiple  practitioners posing as a legitimate patient, referred to as a doctor  shopper, to obtain prescriptions for drugs for themselves or others. In an  example of diversion, criminal enterprises may rob distributors and  pharmacies of prescription drugs to sell to others for a profit.
section_title: Confidential Informants
paragraphs: Confidential informants provide information and take action at the  direction of law enforcement agencies to further investigations. Agencies  may rely on confidential informants in situations in which it could be  difficult to use an undercover officer. To help ensure appropriate oversight  of informants, The Attorney General’s Guidelines Regarding the Use of  Confidential Informants (the Guidelines) set forth detailed procedures and  review mechanisms to ensure that law enforcement agencies exercise  their authorities appropriately and with adequate oversight. Adherence to  the Guidelines is mandatory for DOJ law enforcement agencies, including  DEA. The Guidelines require each DOJ law enforcement agency to  develop agency-specific policies regarding the use of informants, and the  DOJ Criminal Division is tasked with reviewing these agency-specific  policies to ensure that the policies comply with the Guidelines.
The Guidelines require that, prior to using a person as an informant,  agencies vet informants to assess their suitability for the work and that  agents conduct a continuing suitability review for the informant at least  annually thereafter. Additionally, the Guidelines permit agencies to  authorize informants to engage in activities that would otherwise  constitute crimes under federal, state, or local law if someone without  such authorization engaged in these same activities. For example, in the  appropriate circumstance, an agency could authorize an informant to  purchase illegal drugs from someone who is the target of a drug- trafficking investigation. Such conduct is termed “otherwise illegal  activity.” The Guidelines include certain requirements for authorizing  otherwise illegal activity and restrictions on the types of activities an  agency can authorize.
section_title: DEA Has Taken Some Actions but Has Not Yet Implemented Most of GAO’s Recommendations Regarding the Quota Process and Efforts to Address Drug Shortages
paragraphs: In our February 2015 report, we found that DEA had not effectively  administered the quota process, nor had DEA and FDA established a  sufficiently collaborative relationship to address shortages of drugs  containing controlled substances subject to quotas. Since then, DEA  has taken some actions to address the seven recommendations we made  in our February 2015 report with respect to the agency’s administration of  the quota process and efforts to address drug shortages, but DEA has  only fully implemented two of the seven recommendations.
subsections: section_title: DEA Had Not Effectively Administered the Quota Process Due to Missed Time Frames and a Lack of Internal Controls
paragraphs: As we reported in February 2015, DEA had not proposed or established  quotas within the time frames required by its regulations for any year from  2001 through 2014. DEA officials attributed this lack of compliance to  inadequate staffing and noted that the agency’s workload with respect to  quotas had increased substantially. Manufacturers who reported quota- related shortages cited late quota decisions as causing or exacerbating  shortages of their drugs. We could not confirm whether DEA’s lack of  timeliness in establishing quotas had caused or exacerbated shortages  because of concerns about the reliability of DEA’s data, among other  things. However, by not promptly responding to manufacturers’ quota  applications, we concluded that DEA may have hindered manufacturers’  ability to manufacture drugs that contain schedule II controlled  substances that may help prevent or resolve a shortage.
Additionally, our February 2015 report found that DEA had weak internal  controls, which jeopardized the agency’s ability to effectively manage the  quota process. Specifically:
DEA did not have adequate controls to ensure the reliability of  YERS/QMS, which it used to track manufacturers’ quota applications  and record its quota decisions. DEA officials described some data  checks of YERS/QMS, such as managers verifying that information  entered into the system was accurate. However, the agency did not  have systematic quality checks to ensure that the data were accurate  or the checks it had in place were sufficient. This lack of systematic  data checks was also concerning because we estimated that 44  percent of YERS/QMS records in 2011 and 10 percent in 2012 had  errors. DEA officials said that 2011 was the first year manufacturers  applied for quotas electronically and they expected data from 2012  and beyond to be more accurate.
DEA lacked critical management information because it did not have  performance measures related to setting quotas. In the absence of  such performance measures, we concluded that DEA was missing  important information for program managers to use when making  decisions about program resources, and the agency could not  effectively demonstrate program results.
DEA did not monitor or analyze YERS/QMS data to assess the  performance of the quota process. Absent such analysis, DEA was  unable to evaluate its responses to manufacturers’ quota applications  or to understand the nature of its workload.
DEA did not have reasonable assurance that the quotas it set were in  accordance with its requirements and could not ensure continuity of  its operations, as it did not have protocols, policies, training materials,  or other documentation to manage the quota process. Instead, the  agency said it relied on its regulations and the CSA to serve as  guidance on how to conduct these activities. However, the need for  detailed policies, procedures, and practices is particularly important  because the process of setting quotas is very complex, requiring staff  to weigh data from at least five different sources that may have  contradictory information.
To address these deficiencies, our February 2015 report recommended  that DEA take four actions to ensure it is best positioned to administer the  quota process. Specifically, we recommended that DEA (1) strengthen its  internal controls of YERS/QMS, (2) establish performance measures  related to quotas, (3) monitor and analyze YERS/QMS data, and (4)  develop internal policies for processing quota applications and setting  quotas. In commenting on our report, DEA did not explicitly agree or  disagree with these four recommendations.
As of June 2016, DEA has taken some actions to address these  recommendations. Specifically, in response to our first recommendation,  the agency stated that it implemented a series of system-generated flags  in YERS/QMS that verify the information manufacturers enter into their  quota applications and identify entries made by DEA staff that warrant  further review within the agency. Additionally, in October 2015, DEA said  that it would compare a random sample of manufacturers’ applications  and DEA’s responses in YERS/QMS on a quarterly basis starting in fiscal  year 2016. In June 2016, DEA provided the results of its review of 146  YERS/QMS records from March through May 2016, which identified a  nearly nonexistent error rate (.01 percent). Because of these actions, we  believe that DEA has implemented this recommendation.
In response to our second recommendation, DEA stated in October 2015  that it would develop performance standards that outline time frames for  when manufacturers should expect DEA to respond to their quota  applications, as well as develop web-based training to help manufacturers  improve the quality of the information submitted to the agency. However,  in June 2016, DEA stated that developing performance measures specific  to the quota process would not be feasible because actions affecting  quotas are outside of the agency’s control. Instead, DEA focused on  training manufacturers about the quota process to improve the accuracy  and quality of their quota applications by holding additional trainings in  April 2016 and developing web-based training. The agency plans to finish  developing the web-based training in fiscal year 2017. Although training is  an important step in improving the information being submitted to DEA, it  is also important that DEA establish measures to assess its performance  in achieving its mission of ensuring an adequate and uninterrupted supply  of controlled substances, as it does for its diversion-related mission. As a  result, we do not believe DEA’s actions are fully responsive to our  recommendation.
In response to our third recommendation, DEA stated that it streamlined  its process for reviewing manufacturers’ quota applications, which led to a  significant reduction in the agency’s response times. For example, DEA  said that it is now responding to manufacturers’ quota applications within  four weeks. As of June 2016, the agency plans to continue monitoring  and analyzing the quality of the YERS/QMS data and DEA’s timeliness in  responding to quota applications. We are currently awaiting  documentation about DEA’s analysis of YERS/QMS data in relation to the  agency’s timeliness in responding to manufacturers’ quota applications  and will update the status of this recommendation as applicable.
Lastly, in response to our fourth recommendation, in June 2016, DEA  said that it established internal policies for the quota process and is in the  process of updating its employee training materials for new staff to help  ensure that each staff member has the information needed to issue  quotas in accordance with the CSA and DEA’s regulations. DEA agreed  to provide the materials to us when they are completed, and we will  assess the status of this recommendation at that time.
section_title: Lack of Effective Coordination May Hinder the Ability of DEA and FDA to Address Future Shortages of Drugs Containing Controlled Substances
paragraphs: Our February 2015 report also identified several barriers that may hinder  DEA and FDA from effectively coordinating with each other during  shortages of drugs containing controlled substances subject to quotas.  For example:
We found that DEA and FDA sometimes disagreed about what  constitutes a shortage because the two agencies defined drug  shortages differently. FDA defined a drug shortage as a period of time  when the demand or projected demand for the drug within the United  States exceeds the supply of the drug. In contrast, DEA officials told  us that there is no shortage, from DEA’s perspective, as long as there  is quota available to manufacture a given controlled substance,  regardless of which particular manufacturers are producing the  product and which strengths or formulations are available. We  concluded that by not reaching agreement about what constitutes a  drug shortage, it was unclear whether the two agencies would be able  to successfully coordinate should a shortage of a drug containing a  controlled substance subject to a quota occur.
We also found that DEA lacked policies, procedures, or other means  to coordinate with FDA about shortages of a controlled substance  related to quotas. FDA established such policies and procedures in  September 2014, but DEA officials said the agency did not plan to  establish formal policies and procedures to coordinate the agency’s  response to FDA. While FDASIA directs DEA to respond within 30  days to manufacturers that request additional quota pertaining to a  shortage of a schedule II drug, the law does not specify how quickly  DEA must respond to a request from FDA. A time frame for DEA to  respond would be particularly important given that a request from FDA  means it has determined that there is a shortage of a life-sustaining  drug that an increase in quota is necessary to address.
Further, both agencies told us that they were subject to restrictions on  exchanging the proprietary information they receive from drug  manufacturers, which may be helpful to prevent or address shortages.  At the time our report was issued in February 2015, the agencies had  been working for more than 2 years to develop an updated  memorandum of understanding (MOU) to share such information.
To address these barriers to effective coordination, we made three  recommendations. First, we recommended that DEA and FDA promptly  update the MOU between the two agencies. Second, we recommended  that either in the MOU or a separate agreement, DEA and FDA  specifically outline what information they will share and the time frames  for sharing such information in response to a potential or existing drug  shortage. Third, we recommended that DEA expeditiously establish  formal policies and procedures to coordinate with FDA, as directed by  FDASIA, with respect to expediting shortage-related quota applications.  In commenting on a draft of our report, DEA did not explicitly agree or  disagree with these three recommendations. The Department of Health  and Human Services agreed with the two recommendations we made to  FDA.
In March 2015, FDA and DEA updated the MOU to establish procedures  regarding the exchange of proprietary and other sensitive information  between DEA and FDA, which fully addresses one of our three  recommendations. According to DEA, the two agencies have shared  information under the auspices of the MOU at least six times in fiscal year  2016. Although the MOU established procedures for sharing information,  it calls for the development of separate plans to specify precisely what  information is to be shared, and who it is to be shared with. In October  2015, DEA said that it had met with FDA to determine the specific  procedures by which information regarding drug shortages shall be  exchanged, and a draft of such a work plan has been circulated between  the two agencies for comment. As of June 2016, DEA expects the work  plan to be completed no later than December 2016. DEA also noted that  the work plan will contain formal policies and procedures to facilitate  coordination with FDA, as directed by FDASIA. As a result, the two  related recommendations remain open at this time.
section_title: DEA Has Provided More Information to Registrants about Their Controlled Substances Roles, but Additional Actions Are Needed to Fully Address Our Recommendations
paragraphs: In June 2015, we reported that DEA provided information to its registrants  regarding their roles and responsibilities for preventing abuse and  diversion through conferences, training, and other initiatives. We also  found that DEA provided additional resources, such as manuals for  specific registrant groups and DEA’s Know Your Customer guidance for  distributors. However, based on our generalizable survey of four DEA  registrant groups, we reported that many registrants were not aware of  these resources or they would like additional guidance, information, or  communication from DEA to better understand their roles under the  CSA. We recommended that DEA take three actions to address  registrants’ concerns. DEA has made some progress, but additional  actions are needed to fully address our recommendations.
subsections: section_title: Many Registrants Were Not Aware of DEA Conferences and Other Resources
paragraphs: In June 2015, we reported that DEA periodically hosted events such as  conferences or meetings for various components of its registrant  population during which the agency provided information about  registrants’ CSA roles and responsibilities for preventing abuse and  diversion. We found that DEA was also often a presenter at various  conferences at the national, state, or local level, which registrants could  attend. We asked distributors whether representatives of their facility  attended DEA’s 2013 Distributor Conference, and asked individual  pharmacies and chain pharmacy corporate offices whether they or other  representatives of their pharmacy (or pharmacy chain) had attended a  Pharmacy Diversion Awareness Conference (PDAC). Based on our  surveys, we estimated that 27 percent of distributors and 17 percent of  individual pharmacies had participated in the DEA-hosted events, while  63 percent (20 of 32) of chain pharmacy corporate offices we surveyed  had participated in a PDAC. Of the large percentages of distributors and  pharmacies that did not participate in these conferences, many cited lack  of awareness as the reason. For example, an estimated 76 percent of  individual pharmacies that had not attended a PDAC and 35 percent of  distributors that had not attended the 2013 Distributor Conference cited  lack of awareness as a reason for not participating.
Our June 2015 report also stated that DEA had created various  resources, such as guidance manuals and a registration validation tool,  which registrants could use to understand or meet their roles and  responsibilities under the CSA. However, based on our surveys, we found  that many registrants were not using these resources because they were  not aware that they existed. For example, DEA had created guidance  manuals for pharmacists and practitioners to help them understand how  the CSA and its implementing regulations pertain to these registrants’  professions. These documents were available on DEA’s website. In 2011,  DEA released guidance for distributors containing suggested questions a  distributor should ask customers prior to shipping controlled substances  (referred to as the Know Your Customer guidance). Additionally, DEA  offered a registration validation tool on its website so that registrants,  such as distributors and pharmacies, could determine if a pharmacy or  practitioner had a valid, current DEA registration. However, our survey  results suggested that many registrants were not using these resources  that could help them better understand and meet their CSA roles and  responsibilities because they were unfamiliar with them. For example, of  particular concern were the estimated 53 percent of individual pharmacies  that were not aware of either DEA’s Pharmacist’s Manual or the  registration validation tool, and the 70 percent of practitioners that were  not aware of DEA’s Practitioner’s Manual, and were therefore not using  these resources.
The lack of awareness among registrants of DEA resources and  conferences suggested that DEA may not have an adequate means of  communicating with its registrant populations. Further, with so many  registrants unaware of DEA’s conferences and resources, we reported  that DEA lacked assurance that registrants had sufficient information to  understand and meet their CSA responsibilities. Therefore, we  recommended that DEA identify and implement means of cost-effective,  regular communication with distributor, pharmacy, and practitioner  registrants, such as through listservs or web-based training. DEA agreed  that communication from DEA to the registrant population was necessary  and vital. As of April 2016, DEA reported that it had taken steps towards  addressing this recommendation. In particular, DEA reported that it was in  the process of developing web-based training modules for all of its  registrant population, and was considering the best way to implement a  listserv to disseminate information to its various registrant types. We plan  to continue to monitor the agency’s efforts in this area, and this  recommendation remains open.
section_title: Distributors and Pharmacies Wanted Additional Information and Communication from DEA Regarding Their Roles in Preventing Abuse and Diversion
paragraphs: As we reported in June 2015, some responses to our registrant survey  indicated that additional guidance for distributors regarding suspicious  orders monitoring and reporting, as well as more regular communication,  would be beneficial. In response to an open-ended question in our survey  about how DEA could improve its Know Your Customer document, the  guidance document DEA has provided to distributors, half of distributors  (28 of 55) that offered comments said that they wanted more guidance  from DEA. Additionally, just over one-third of distributors (28 of 77)  reported that DEA’s Know Your Customer document was slightly or not at  all helpful. Furthermore, in response to an open-ended question about  what additional interactions they would find helpful to have with DEA,  more than half of the distributors that offered comments (36 of 55) said  that they needed more communication or information from, or interactions  with, DEA. Some of the specific comments noted that distributors would  like more proactive communication from DEA that was collaborative in  nature, rather than being solely violation- or enforcement-oriented. Some  of the additional communication and interactions proposed by distributors  included quarterly meetings with the local field office and more training or  conferences related to their regulatory roles and responsibilities.
Also, while DEA had created guidance manuals for pharmacists and  practitioners, the agency had not developed a guidance manual or  comparable document for distributors. DEA officials told us that they  believed the information in agency regulations was sufficient for  distributors to understand their CSA responsibilities for suspicious orders  monitoring and reporting. DEA officials also said that they met routinely  with distributors and distributors had fewer requirements compared to  other registrant types and officials did not believe such guidance was  necessary. Additionally, DEA officials said that while distributors wanted  specific instructions on how to avoid enforcement actions, DEA could not  do that because circumstances that lead to enforcement actions (e.g.,  individual business practices) vary.
However, as we stated in our June 2015 report, a guidance document for  distributors similar to the one offered for pharmacies and practitioners  could help distributors further understand and meet their roles and  responsibilities under the CSA for preventing diversion, though the  document may not need to be as detailed. Specifically, we concluded that  although DEA may not be able to provide guidance that will definitively  answer the question of what constitutes a suspicious order or offer advice  about which customers to ship to, DEA could, for example, provide  guidance around best practices in developing suspicious orders  monitoring systems. DEA could also enhance its proactive  communication with distributors—which could be done, for example, via  electronic means if additional in-person outreach would be cost  prohibitive. Such steps are key to addressing distributors’ concerns,  because without sufficient guidance and communication from DEA,  distributors may not be fully understanding or meeting their roles and  responsibilities under the CSA for preventing diversion. Additionally, in  the absence of clear guidance from DEA, our survey data showed that  many distributors were setting thresholds on the amount of certain  controlled substances that can be ordered by their customers (i.e.,  pharmacies and practitioners), which could negatively impact pharmacies  and ultimately patients’ access. For example, we estimated that 62  percent of individual pharmacies did business with distributors that put  thresholds on the quantity of controlled substances they could order, and  we estimated that 25 percent of individual pharmacies have had orders  cancelled or suspended by distributors.
Responses to our surveys also showed that some pharmacies wanted  updated or clearer guidance, as well as more communication and  information, from DEA. For example, we found that DEA’s Pharmacist’s  Manual was last updated in 2010, and since that time DEA had levied  large civil fines against some pharmacies. Some pharmacy associations  reported these fines had caused confusion in the industry about  pharmacists’ CSA roles and responsibilities. In their responses to an  open-ended question in our survey about DEA’s Pharmacist’s Manual,  some chain pharmacy corporate offices (7 of 18) said that the manual  needed updates or more detail, some chain pharmacy corporate offices  (5 of 18) reported other concerns with the manual, and some individual  pharmacies (13 of 33) said that the manual needed improvement, such as  more specifics. For example, several chain pharmacy corporate offices  commented that the manual needed to be updated to reflect changes in  DEA enforcement practices or regulations (e.g., the rescheduling of  hydrocodone from a schedule III to a schedule II drug).
The need for clearer guidance for pharmacists was also suggested by  some chain pharmacy corporate offices’ responses to a question about  DEA field office consistency. Specifically, when asked how consistent the  responses of staff in different field offices had been to their inquiries about  pharmacists’ roles and responsibilities, nearly half of chain pharmacy  corporate offices (8 of 19) that had contact with multiple DEA field offices  said that staff responses were slightly or not at all consistent. In an open- ended response to this question, one chain pharmacy corporate office  noted that in its interactions with different DEA field offices throughout the  country it had received different, widely varying interpretations of DEA  requirements that affected the chain’s day-to-day operations, such as  requirements for theft/loss reporting of controlled substances and  requirements for prescribers to be reported when the prescriber fails to  provide a written prescription. These responses from chain pharmacy  corporate offices about field office inconsistencies suggested that the  existing pharmacy guidance may not be clear even to some DEA field  office officials.
Additionally, the desire for more or clearer guidance and more  communication from DEA was a common theme in the responses offered  from both individual pharmacies and chain pharmacy corporate offices to  the open-ended questions in our survey related to DEA interactions. For  example, in response to an open-ended question about what additional  interactions they would find helpful to have with DEA headquarters or field  office staff, nearly all of the chain pharmacy corporate offices that offered  comments (15 of 18) said that they wanted more guidance or clearer  interpretation of the guidance from DEA, more communication with DEA,  or a more proactive, collaborative relationship with DEA. In addition,  nearly a third of individual pharmacies (18 of 60) that offered open-ended  answers to a question about any new guidance, resources, or tools that  DEA should provide to help them understand their roles and  responsibilities said that they would like more proactive communication  from DEA through methods such as a newsletter or e-mail blast.
To help address the concerns raised by some distributor and pharmacy  registrants, we recommended that DEA solicit input from distributors, or  associations representing distributors, and develop additional guidance  for distributors regarding their roles and responsibilities for suspicious  orders monitoring and reporting. We also recommended that the office  solicit input from pharmacists, or associations representing pharmacists,  about updates and additions needed to existing guidance for pharmacists,  and revise or issue guidance accordingly.
In commenting on our report, DEA raised concerns about the  recommendation to solicit input from distributors and stated that short of  providing arbitrary thresholds to distributors, it cannot provide more  specific suspicious orders guidance because the variables that indicate a  suspicious order differ among distributors and their customers. In April  2016, DEA provided information about ongoing efforts to educate  distributors about their roles and responsibilities for monitoring and  reporting suspicious orders, such as their Distributors’ Conferences, and  noted that it plans to host yearly training for distributors. However, DEA  did not mention any plans to develop and distribute additional guidance  for distributors. We continue to believe that a guidance document similar  to the one offered for pharmacies and practitioners could help distributors  further understand and meet their role and responsibilities under the CSA.  Specifically, although DEA may not be able to provide guidance that will  definitively answer the question of what constitutes a suspicious order or  offer advice about which customers to ship to, DEA could, for example,  provide guidance around best practices in developing suspicious orders  monitoring systems. In the absence of clear guidance from DEA, our  survey data show that many distributors are setting thresholds on the  amount of certain controlled substances that can be ordered by their  customers (i.e., pharmacies and practitioners), which can negatively  impact pharmacies and ultimately patients’ access. We plan to continue  to monitor the agency’s efforts in this area, and this recommendation  remains open.
With respect to our recommendation that DEA solicit input from  pharmacists, in commenting on our report, DEA described actions it  would take to partially address the recommendation, including updating  the Pharmacist’s Manual to reflect two subject matter area changes  related to the rescheduling of hydrocodone and new drug disposal  regulations. However, at that time, DEA did not comment about providing  any additional guidance to pharmacists related to their roles and  responsibilities in preventing abuse and diversion under the CSA.
In April 2016, DEA reported that it continues to work with the National  Association of Boards of Pharmacy regarding issues raised during  stakeholder discussions, which resulted in a March 2015 consensus  document published by stakeholders entitled “Stakeholders’ Challenges  and Red Flag Warning Signs Related to Prescribing and Dispensing  Controlled Substances.” DEA also described other ways in which the  agency works with pharmacists or associations representing pharmacists,  such as during regional one-day Pharmacy Diversion Awareness  Conferences, and noted that it was still working to update the  Pharmacist’s Manual regarding changes related to the rescheduling of  hydrocodone and new drug disposal regulations. DEA also commented  that it would continue to update or issue guidance as warranted, but  again, did not indicate that it had updated, or planned to update, existing  guidance to pharmacists related to their roles and responsibilities in  preventing abuse and diversion under the CSA. We plan to continue to  monitor the agency’s efforts in this area, as well, and consequently this  recommendation remains open.
section_title: DEA Agreed to Update Its Confidential Informants Policy to Be More Consistent with Attorney General Guidelines
paragraphs: In September 2015, we reported that DEA’s confidential informants policy  required agents to consider most of the factors identified in the Attorney  General’s Guidelines for conducting initial suitability reviews prior to using  a person as an informant. Furthermore, in accordance with the  Guidelines, DEA’s policy required that a continuing suitability review be  conducted at least annually. However, we determined that DEA’s policy  was either partially consistent with or did not address some provisions in  the Guidelines regarding oversight of informants’ authorized illegal  activities. We recommended that DEA update its policy and  corresponding monitoring processes to address these provisions from the  Guidelines. As of June 2016, DEA had made progress, but had not fully  implemented our recommendation.
In September 2015, we reported that DEA’s policy was partially  consistent with the Guidelines’ requirements to provide written  instructions to an informant regarding the parameters of the authorized  otherwise illegal activity and to have the informant sign an  acknowledgment of these instructions. Additionally, regarding the  Guidelines’ provisions on the suspension or revocation of authorization  for an informant to engage in otherwise illegal activity, DEA’s policy was  consistent with the provision for revoking authorization in cases where  DEA has reason to believe that an informant is not in compliance with the  authorization. However, DEA’s policy did not address circumstances  unrelated to the informant’s conduct in which DEA may, for legitimate  reasons, be unable to comply with precautionary measures necessary for  overseeing otherwise illegal activity. At the time of our review, DEA  officials told us that they did not authorize informants to participate in  otherwise illegal activity without agent supervision, and, therefore, these  officials said they believe this requirement would not be applicable to  DEA. However, we found that DEA’s policy did not explicitly state that  direct supervision of an agent is required for all instances of an  informant’s participation in otherwise illegal activity. Additionally,  regardless of the circumstances for suspending or revoking an  authorization for otherwise illegal activity, DEA’s policy did not require the  informant to sign a written acknowledgment that the authorization had  been suspended or revoked.
As a result, we recommended that DEA, with assistance and oversight  from the DOJ Criminal Division, update its policy and corresponding  monitoring procedures to explicitly address the Guidelines’ provisions on  oversight of informants’ illegal activities. DOJ concurred with this  recommendation, and has coordinated with DEA on updating the  agency’s policy. According to an April 2016 memo, the Criminal Division  has reviewed a revised version of DEA’s agents manual, which contains  DEA’s policies and practices regarding confidential informants, and the  Criminal Division determined that the revised manual is fully consistent  with the Guidelines. Based on follow up discussions with DOJ, as of June  2016, DEA’s Office of the Chief Counsel was preparing the language  needed to incorporate the new policy and expects to complete this  process in summer 2016. At that time, we plan to review the updated  policy to determine whether DEA has fully implemented our  recommendation.
Chairman Grassley, Ranking Member Leahy, and Members of the  Committee, this completes my prepared statement. I would be pleased to  respond to any questions that you may have at this time.
section_title: GAO Contacts and Staff Acknowledgments
paragraphs: For questions about this statement, please contact Diana C. Maurer at  (202) 512-8777 or maurerd@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement. Individuals who made key contributions to this  statement include Kristy Love (Assistant Director), Karen Doran, Alana  Finley, Sally Gilley, Rebecca Hendrickson, Lisa Lusk, Geri Redican- Bigott, Christina Ritchie, Kelly Rolfes-Haase, and Sarah Turpin. Key  contributors for the previous work on which this testimony is based are  listed in each product.
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