Debunking the Myths of Controlled Substance Quotas

JUNE 01, 2018
Erin Albert, PharmD, JD, MBA, PAHM
Confusion and misunderstanding often surround the processes and procedures employed by the Drug Enforcement Administration (DEA) to establish production quotas for schedule I and II controlled substances in the United States. I asked Joseph T. Rannazzisi, JD, RPh, a former deputy assistant administrator of the DEA Diversion Control Division, to provide insight into the process of establishing controlled substance quotas and whether quotas can play a role in stopping the opioid crisis.

Q: There seems to be some confusion regarding controlled substance quotas. Where did these quotas come from, and what is their history?
A: The authority and procedures to establish controlled substance quotas are found in the Federal Controlled Substances Act (CSA) (21 US Code [USC] § 801, et seq) and implementing regulations (21 Code of Federal Regulations [CFR] § 1300 et seq). The US attorney general (AG) is charged with the statutory authority to establish production quotas, and that responsibility has been delegated to the DEA. The authority to establish quotas has been in place since the beginning of the CSA.

Specifically, 21 USC § 826 requires the AG to set a production quota for each basic class of controlled substance in schedule I and schedule II to provide for the estimated medical scientific, research, and industrial needs of the United States in addition to lawful export and the maintenance of reserve stocks. The CSA limits the amount of CI and CII controlled substances that may be produced while ensuring that there is enough basic class to meet the needs of the country. It is a balancing act that is accomplished through a scientific and mathematical exercise conducted by DEA scientists. The procedures and requirements employed to establish quota are found in 21 CFR §1303.

Unlike the early days of the CSA, today there are more than 400 DEA registered manufacturers applying for quota and DEA processes in excess of 4000 quotas annually. The statute and regulations have not evolved with the increase in the use of controlled substances, particularly pharmaceutical opioids, and the subsequent increase in quota requests.

Q: At a high level, how does the DEA go through the quota process?
A: Controlled substance quotas are established annually and updated once during the year. An aggregate production quota is established for each basic class of drug; an example of a basic class would be hydrocodone, oxycodone, or oxymorphone. The manufacture and procurement of controlled substance active pharmaceutical ingredients (APIs) are limited to DEA registrants.

The CSA specifically prohibits the DEA from establishing production quotas in terms of individual pharmaceutical dosage forms, and once a quota is issued, the DEA has no authority to require a manufacturer to manufacture a specific drug, dosage, or product. The proposed annual quotas are reported in the Federal Register, and the public is provided an opportunity to comment. Once comments are reviewed and analyzed, the final aggregate production quota is published in the Federal Register. Quota requests are now submitted electronically to the DEA.

There are 3 types of quotas: Aggregate Production Quotas, Individual Manufacturing Quotas, and Procurement Quotas. They all rely on one another.

First, think of the Aggregate Production Quota as a pie representing the total amount of a basic class of drug authorized to be manufactured in the United States. The total amount of drug manufactured cannot exceed the Aggregate Production Quota for each basic class. Each manufacturer must remove a slice of that pie (its Individual Manufacturing Quota) to manufacture its authorized quota amount of APIs within the basic class.

The APIs will be supplied downstream to dosage form manufacturers through a Procurement Quota, or the maximum amount that the registrant can acquire during the year. The dosage forms manufactured will ultimately be sent downstream to pharmacies, clinics, and hospitals for dispensing to patients.

All manufacturing levels of the supply chain apply for their individual quotas during the year. Individual quotas for each registrant are calculated based on their business activities and the justification that they provide to the DEA. Additionally, the DEA seeks input from the FDA and analyzes information obtained from the Automation of Reports and Consolidated Orders System, as well as information procured from data aggregators concerning prescriptions dispensed.

The DEA reviews current and previous years’ manufacturing activity related to the basic class of drug, how much drug was destroyed, and current rate of disposal. Manufacturing waste, yield, exports, product development, validation studies, stability studies, and inventory are also taken into account when evaluating and calculating individual quotas. But in the end, a large amount of the quota is determined by prescriptions dispensed to patients.

Q: If demand drives supply for quotas, could the DEA simply limit supply via the quota system to curb the opioid epidemic?
A: The simple answer is no. The only way that quota can be decreased is by a decrease in actual prescriptions dispensed or, to a much lesser extent, the amount of product development and research conducted on controlled substances. However, since quota is driven by prescriptions dispensed, the only true means of decreasing quota is to change prescribing behavior, which will ultimately lower the number of prescriptions written and dispensed. Prescribing behavior drives quota.

I have read the numerous articles and editorials that preach the gospel of quota reduction as a silver bullet to fight the opioid epidemic. I believe that these ideas are based on misinformation, misunderstanding, and a thirst for an immediate solution to a problem that has risen to epidemic proportions over a 20-year period. You will not fix the problem overnight, and quota reduction is not a panacea to remedy the epidemic.

To illustrate, if quota is reduced by 20% for a specific basic class, there will be 20% fewer drugs of that class in the marketplace. That seems to be a good thing, until you look at who is trying to access that particular drug. You still have the same number of legitimate patients, overprescribed patients, and illegitimate patients accessing the drug from the same prescribers. If prescribing behavior does not change, the same number of individuals will be attempting to access the drug, but now there is 20% less drug to be shared.

Since the majority of quota is based on prescriptions dispensed, and there are now fewer drugs in the marketplace, a shortage will occur. I don’t believe that prescribers are going to say, “The DEA decreased the quota by 20%, so I am going to decrease my prescriptions written.” If you cut quota and do not cut the number of illegitimate drug seekers or overprescribed patients in the population, you will have a situation in which legitimate patients will be competing for a smaller amount of drug.

A shortage may not sound like a problem, but under 21 USC § 826, the DEA is required to provide quota for enough drug to meet the medical, scientific, industrial, and research needs of the country. If there are legitimate patients who cannot access medication because of shortage, then the DEA has not met its statutory responsibility. But it goes deeper than that: As medical professionals, do we really want to have a patient with a legitimate medical need go without their medication? The DEA cannot just cut quotas by 20% to 30% to “see what happens.” This ultimately involves patient care, and nobody at the DEA wants to see any patient or family suffer because of a quota-related shortage.

Q: What is an example of a natural quota decrease?
A: Quota will decrease when prescribing habits change and the number of prescriptions dispensed decreases. The best illustration of a “natural decrease” in quota occurred after the 2014 up-scheduling of hydrocodone combination products from schedule III to schedule II. The up-scheduling of hydrocodone brought with it a set of rules that changed prescriber behavior; prescribers could no longer telephone an oral prescription to a pharmacy, and no refills could be granted. This action resulted in a 22% decrease in prescriptions after the first year, and within 2 years, there was a corresponding drop in issued quota.1 Simply put, quota naturally decreased after rescheduling because of the change in prescribing behavior.

Q: What else can states do to decrease demand for opioids and abuse?
A: There are several medical practice provisions that states have employed to change prescriber behavior. For instance, some states have mandated the use of prescription drug monitoring programs (PDMPs) by physicians before they can dispense a controlled substance prescription to a patient. Prescribers who access PDMPs are better informed about the activities of their patients and will be less inclined to authorize a controlled substance prescription when they have information indicating that their patients are being treated by several doctors, receiving multiple controlled substance prescriptions, or receiving duplicative therapy.

Some states have established chronic pain treatment guidelines that establish limits on opioid prescribing and when a patient needs to be referred to a specialist; this is another way of ensuring the patient is getting the best possible care while potentially changing prescribing behavior. The CDC also has its Guideline for Prescribing Opioids for Chronic Pain.2 Some states require chronic pain management contracts between prescribers and patients and strict guidelines on morphine equivalents.

States are also requiring quantity limits and shorter duration of therapy for controlled substance pain medications, as well, in addition to time limits on prescriptions.

Q: What would you like pharmacists and pharmacy students to know about quotas and the opioid crisis?
A: There are people who want to believe that quota can be used as an enforcement tool, but it simply cannot. Quota is a regulatory function that limits the amount of drug to be manufactured or procured. Quotas have nothing to do with the actual amount of drugs going to individuals who are seeking drugs for nonmedical use. If quota is reduced without a reduction in the demand, shortage will occur. The only way we will decrease the amount of drug in the market for illicit use is to get back to the basics of regulatory control at the state and federal levels. That means that the states need to continue to evaluate practice guidelines and provide updated guidance concerning the prescribing of opioids and other controlled substances.

At the federal level, everyone in the controlled substance supply chain, including medical care providers, must comply with the CSA. DEA regulations require that every registrant maintain effective controls against diversion. That means that physicians must prescribe controlled substances for a legitimate medical purpose in the usual course of professional practice.

Pharmacists must evaluate controlled substance prescriptions upon presentation and conduct a corresponding responsibility (or “red flag”) analysis before dispensing a medication to ensure that prescriptions are valid, effective, and issued for a legitimate medical purpose.

Manufacturers, wholesalers, and distributors must ensure, through a due diligence analysis of their customers, that the drugs being sold downstream are not being diverted. Manufacturers, wholesalers, and distributors must have a system in place to identify suspicious orders from customers and must report suspicious orders to the DEA when found. They must not ship drugs to customers suspected of diversion.

In short, controlled substance distribution and dispensing is a system of checks and balances, with all levels analyzing and evaluating the potential for diversion. If all registrants within the controlled substance closed system of distribution comply with their specific legal responsibilities and obligations, there will be a decrease in demand, a decrease in quotas, and a decrease in opioid abuse.
Erin Albert, PharmD, JD, MBA, PAHM, is a health outcomes pharmacist, writer, entrepreneur, attorney, podcaster, preceptor, career coach, and STEM advocate. Her latest book is Single Women Entrepreneurs: 5 Years Later. You can learn more about Dr. Albert on her blog ( and follow her on Twitter (@ErinLAlbert).

  1. Jones, CM, Lurie PG, Throckmorton, DC. Effect of US Drug Enforcement Administration’s rescheduling of hydrocodone combination analgesic products on opioid analgesic prescribing. JAMA Intern Med. 2016;176(3):399-402. Accessed February 25, 2018.
  2. Guideline for prescribing opioids for chronic pain. CDC website. Accessed February 25, 2018.