DEA Registrants

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. 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. Confidential Informants

Confidential informants provide information and take action at the  direction of law enforcement agencies to further investigations. 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

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. DEA Had Not Effectively Administered the Quota Process Due to Missed Time Frames and a Lack of Internal Controls

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. 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. 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. 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 Has Provided More Information to Registrants about Their Controlled Substances Roles, but Additional Actions Are Needed to Fully Address Our Recommendations

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. 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. As of April 2016, DEA reported that it had taken steps towards  addressing this recommendation. However, DEA  did not mention any plans to develop and distribute additional guidance  for distributors. We plan to continue  to monitor the agency’s efforts in this area, and this recommendation  remains open. 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 Agreed to Update Its Confidential Informants Policy to Be More Consistent with Attorney General Guidelines

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. 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. 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.
Why GAO Did This Study

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.

What GAO Found

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.

What GAO Recommends

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.