Frequently Asked Questions

1. If I file to renew my DEA registration in advance of the expiration date and have not yet received a decision on my renewal application prior to the expiration date, may I continue to lawfully operate under my existing DEA registration. 

In general, yes. So long as you have filed your registration renewal in advance of the expiration date, you can continue to operate under your DEA registration until such time that there is a final decision issued by the DEA Deputy Administrator with respect to your renewal application.

Registrants often question whether a DEA registrant needs to submit a renewal application at least 45 days in advance of the registration’s expiration date in order to qualify for this provision.  However, 21 C.F.R § 1301.36 and 21 C.F.R. § 1309.45, which require submission of a registration-renewal application 45 days in advance of the expiration of that registration renewal in order to continue operations, only apply if the DEA registrant has been issued or received a Show Cause Order. If the registrant has not been issued a Show Cause Order, then the registration renewal is considered timely filed so long as it is filed in advance of the expiration date of the DEA registration.

2. What does the Show Cause Order hearing process involve?

The Show Cause Order hearing process is divided into three administrative levels.  Once the Show Cause Order has been issued, the registrant has 30 days within which time to file a written hearing request. The process is presided over by an Administrative Law Judge (“ALJ”) of the U.S. Department of Justice. The ALJ will issue an order for prehearing statements and hold a prehearing scheduling conference shortly thereafter.  At this conference, the ALJ will issue a date for each side to file their prehearing statements and a hearing date on the allegations in the Show Cause Order. The hearing is adversarial in nature, and each side is permitted to cross examine the other party’s witnesses. Parties may also subpoena witnesses, but there is no formal right to discovery, which is present in most other types of cases. The ALJ hearing is not a jury trial.  In most circumstances, hearsay is also admissible at hearing. 

Upon completion of the hearing, each side files their proposed Findings of Fact and Conclusions of Law for the ALJ’s consideration. Once the ALJ issues a decision, each party has the right of appeal the ALJ’s decision to the DEA Deputy Administrator. The DEA Deputy Administrator will then issue its decision, which becomes final absent an appeal to a Federal Circuit Court of Appeals. If an adverse decision is issued by the Deputy Administrator against the DEA registrant, the registrant has the opportunity to file an appeal to the Federal Circuit Court of Appeals in that registrant’s geographical district. This may include filing an action for preliminary injunction against the DEA Deputy Administrator in the Circuit Court of Appeals to stay the decision of the DEA Deputy Administrator. 

3. What factors are considered by the ALJ or Court in reviewing a Show Cause Order?

There are four general statutory factors which are considered in reviewing a Show Cause Order:  (1)  the registrant’s maintenance of physical security and controls to guard against diversion; (2)  whether the registrant has been convicted of a state or federal crime involving a Controlled Substance or Listed Chemical; (3) the registrant’s past experience with Controlled Substances or Listed Chemicals; and (4) any other consideration that is considered to be in “the public interest.” These factors may vary some degree depending upon whether the registrant is a manufacturer, distributor, or importer of Controlled Substances or Listed Chemicals.

4. Are there any sanctions other than DEA registration revocation, which can be imposed in a Show Cause Hearing?           

Yes. The ALJ and Courts generally consider DEA registration revocation the most severe sanction, which can be appropriate given egregious facts or repeat violations. Other sanctions include a registration term of probation; restrictions as to the type of Controlled Substances and Listed Chemicals that the registrant can manufacture, distribute, or import; imposition of additional record keeping and reporting requirements to the DEA; or increased audits and inspections of the registrant by its local DEA field office. 

5.  I have received a denial of my request for Controlled Substance or Listed Chemical quota. How do I appeal that decision?

If the DEA has denied your request for a Controlled Substance  or Listed Chemical quota, or has not awarded the quantity requested under the quota application, the registrant may appeal the decision. The appeal process is similar to that of the Show Cause Appeal process. The registrant must request a hearing within 30 days of receipt of the quota decision. In general, the burden is on the DEA to justify its denial of the quota application or the amount awarded under the quota if the amount awarded differs from that requested by the registrant.

6. If a Show Cause Order has been served on the DEA registrant, can it be resolved with the DEA without an administrative hearing?

In some cases, yes. If a Show Cause Order is issued and the registrant requests a hearing, the DEA may consider entering into a Memorandum of Agreement (“MOA”) with the registrant, if the DEA believes feels the registrant has remedied the allegations and deficiencies, identified in the Show Cause Order. The MOA will often contain a probationary term and restrictions outlined above.  If the registrant fails to comply with the terms of the MOA, the DEA reserves the right to reinstitute proceedings under the Show Cause Order.

7. What proactive steps can be taken to help guard against regulatory violations and the issuance of a Show Cause Order?

As a registrant, it is increasingly important to maintain an open and cooperative dialog with your local and regional DEA field office, as well as to be proactive in regulatory compliance.  Any agreement with the DEA to remedy any alleged regulatory deficiency must be satisfied.  Registrants should consider seeking various certifications and audits and review by controlled substance auditing firms. Various third-parties also offer accreditation programs.  If the DEA does issue a Show Cause Order, it is important to be able to establish that the registrant maintains a detailed and proactive regulatory compliance program.

8. If the Government initiates an action alleging civil violations of the Controlled Substance Act, what fine can I expect to pay?

The statutory maximum penalties for civil regulatory infractions are quite high.  The maximum statutory penalties for certain violations range from $10,000 - $25,000 per violation.  Some criminal and some civil violations also carry greater fines up to $250,000 per violation. However, simply because there is a regulatory infraction does not mean that the Government will be awarded the statutory maximum penalties.  In order to recover for a civil regulatory infraction, the Government must file a civil lawsuit in Federal District Court. The Government must prove that a violation occurred and must demonstrate the appropriate fine for that violation.  Courts consider four factors in determining what fines to impose (1) the willfulness of the violation; (2) the extent to which the registrant profited from the violation; (3) the registrant’s ability to pay a fine; and (4) the harm caused to the public by the violation. 

However, in recent months, the Government has entered into agreements with large pharmaceutical distributors and pharmacies where the entities have agreed to pay fines of several million dollars relating to allegations that they violated the statutes and regulations of the Controlled Substance Act.

9. If I want to sell or acquire a business that has a DEA registration, is that registration transferable?

As a general matter, DEA registrations are not transferable without prior approval by the DEA. Registration transfers are treated and reviewed as if they were applications for a new DEA registration and are held to the same burden of proof.

10. What is my obligation as a DEA Registrant to monitor and report suspicious sales of Controlled Substances or Listed Chemicals?

DEA registrants have an obligation to monitor their sales of Controlled Substances and Listed Chemicals to their customers for potential diversion. Registrants have an obligation to report orders involving extraordinary quantities of these substances, and facts or circumstances that would lead the registrant to conclude that customer’s order is suspicious. The DEA has published and revised guidelines over the past few years relating to factors to be considered in determining and evaluating “suspicious orders.” In recent years, the DEA has initiated immediate license revocation proceedings based upon the registrant’s failure to timely identify and file suspicious order reports with the DEA.