DEA Inspection and Audits: An Introductory Guide

by admin on November 7, 2017 No comments

By: Matt Fischer

The Drug Enforcement Administration (DEA) is responsible for monitoring the supply and distribution of all controlled substances.  All medical providers, pharmacies, manufacturers of pharmaceuticals, and distributors of pharmaceuticals must be registered with the DEA.  DEA registrants are governed by an ever-growing web of federal laws and regulations which if violated may result in revocation of registration, fines, and/or criminal prosecution.  Therefore, it is important when starting a business or purchasing an existing business requiring DEA registration to be proactive and prepared for periodic administrative inspections or audits.

The Diversion Control Unit is tasked with monitoring compliance and empowered to conduct inspections by the Controlled Substances Act (CSA).  Under the CSA, diversion investigators have the authority to (1) inspect, copy, and verify records required to be kept (e.g., prescription and inventory records); (2) inspect equipment; (3) make a physical inventory of controlled substances; (4) collect samples of controlled substances; and/or (5) inspect any other records appropriate for verification under the CSA.  However, there are limits to what can be inspected (unless an owner or agent of the owner consents).  Inspections do not extend to financial data, sales data (other than shipping data), or pricing data.

Under the regulations, inspections can only be carried out at “reasonable times and in a reasonable manner.”  Upon arrival of a DEA diversion investigator, they will present their official credentials and identify the purpose of the visit.  Normally, the investigator will present a Notice of Inspection (DEA Form 82) for the owner or agent to sign.  Review this notice carefully.  A valid notice must contain specific information such as the name and title of the owner, operator, or agent in charge, the premises name, address to be inspected, the date and time of the inspection, a statement that a notice of inspection is given pursuant to the CSA, and the signature of the inspector.  A registrant has the right to refuse consent.  However, if consent is declined, the DEA will apply for an administrative warrant with a federal court (which is almost always granted).

During the inspection, it is advised to take notes of all recommendations and observations made by the DEA investigators and ask any questions you might have regarding their findings so corrective action can be taken.  It is also good practice to copy any records obtained by the investigator and ask for a receipt if original records are taken from the premises.

Healthcare business owners are charged with knowing the entire network of federal regulations.  If these regulations are not followed, administrative action (or even criminal charges) may result for failing to comply.  Involving an experienced healthcare attorney in the early stages prior to an inspection is highly advised.  An internal audit can be conducted to identify and address potential issues and additionally, an inspection plan can be implemented for use during an inspection.


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