On May 26, 2023, the Drug Enforcement Administration (DEA) published a final decision and order (the “Final Order”) affirming an Administrative Law Judge's (ALJ) August 29, 2019 recommendation (the “ALJ Order”) to revoke DEA registrations held by the United States’ fourth largest wholesale drug distributor — Morris & Dickson Co., LLC (“Morris & Dickson”). See 88 FR 34523 (DEA Docket No. 18-31). Remarkably, the Final Order comes over five (5) years since DEA first issued the underlying May 2, 2018 Order to Show Cause (“OSC”) and Immediate Suspension of Registration (“ISO”). DEA’s 68-page Final Order concentrated on Morris & Dickson’s distribution of oxycodone and hydrocodone from 2014-2018. During this four-year period, DEA found that the wholesaler failed to design and operate a suspicious order monitoring system (“SOM System”), it failed to investigate or report suspicious orders to DEA as required by 21 CFR 1301.74(b), and it failed to maintain effective controls against diversion by distributing controlled substances without performing adequate customer due diligence. Specifically, DEA referenced 12,000 “unusually large” and potentially reportable oxycodone and hydrocodone orders that Morris & Dickson fulfilled during those four years, yet it only reported three orders as suspicious during that time.
The Final Decision only briefly discussed Morris & Dickson’s remedial measures and compliance efforts after DEA’s issuance of the OSC and ISO. In acknowledging those efforts, DEA referenced 3,915 suspicious orders that Morris & Dickson reported to DEA in a two-month span of time immediately following the May 2, 2018 orders. Id. at 34532. Yet, notably, none of the remedial measures implemented by Morris & Dickson since May 2018 influenced DEA’s ultimate decision on revocation. DEA refused to allow any of Morris & Dickson’s efforts to come into compliance over the last five years to mitigate its 2014-2018 misconduct. Id. at 34539. Instead, DEA based its decision to revoke on its finding that Morris & Dickson: (1) has not “unequivocally accepted responsibility for its past misconduct”; (2) has tried to minimize its scope of misconduct and to mischaracterized DEA’s regulations as “best practices” instead of “legal requirements”; and (3) cannot be “entrusted with a registration” due to its lack of appreciation for the scope of its misconduct. Id. at 34537-34539. Based on these findings, DEA refused to consider Morris & Dickson’s post-May 2, 2018 remedial measures, despite the ALJ finding such measures to be “impressive” and DEA giving “similar credit” in the Final Order because: “when a registrant fails to make the threshold showing of acceptance of responsibility, the [DEA] has stated that it need not address the registrant's remedial measures.” Id. at 34539.
DEA faced immediate scrutiny and intense criticism in the hours following publication of the Final Order as the press took issue with DEA’s dilatory administrative handling of the case. While an ALJ issued a recommendation in just over a year following issuance of the OSC and ISO, DEA’s Final Order comes nearly four years after that recommendation, during which time Morris & Dickson continued to distribute controlled substances. To many across the industry and even to the general public, DEA’s strong conviction that Morris & Dickson’s “continued registration is inconsistent with the public interest” and it cannot be “entrusted with a registration” (so strong that DEA felt it could not even take remedial measures into consideration) simply cannot be reconciled with DEA decision to wait five years before taking final action on an ISO, during which time it permitted Morris & Dickson to continue distributing controlled substances. To clarify, an ISO is reserved for those registrants who present an “imminent danger to the public health or safety.” 21 U.S.C. § 824(d). The Final Order in the Morris & Dickson matter calls into question just how “imminent” such a danger must be for DEA to act.