CHAPTER § 2.06 State-Law Issues

• Jurisdiction: United States

§ 2.06 State-Law Issues

[1] State Regulation of Controlled Substance Activities

State-level regulators involve themselves in controlled substance activity,¹⁰⁶ and state laws are additive to federal requirements. Common state requirements include:

• Registration/licensing (this regime is supplemental to federal registration by DEA; some states have imposed substantial fees by company and product);
• Theft and significant-loss reporting (parallel submissions may be required to both federal and state regulators);
• Limits on the quantity of controlled drug products that may be dispensed pursuant to a prescription at one time (e.g., a 30-day supply) or the manner in which certain products containing listed chemicals may be sold (e.g., behind-the-counter requirements for products containing ephedrine and/or pseudoephed-rine);
• Restriction of promotional activities (e.g., limitation on distribution of controlled drug samples, limitation on direct-t o-consumer advertisement of Schedule II controlled substances); and
• Required reporting on shipments of controlled substances into individual states and prescription-monitoring programs (which collect and analyze state-focused distribution, prescribing, and dispensing data in an attempt to identify patterns of inappropriate use, doctor-shopping, or other diversion of controlled substances).

The federal Controlled Substances Act includes an anti-preemption provision that expressly disavows Congressional intent to occupy the field of controlled-substance regulation (including with respect to criminal penalties). State regulators therefore retain and exercise their traditional public-health and police authority unless a positive conflict exists between state and federal laws and the two cannot consistently be implemented.¹⁰⁷

[2] Increasing State-Level Enforcement

State-level regulators have had noteworthy activities in recent years. This includes increased enforcement efforts, particularly in the opioid context. As one example, the State of West Virginia sued a major pharmaceutical distributor in state court, alleging the distributor failed to adequately monitor, report, and remedy purportedly suspicious shipments of pharmaceuticals into that state. The state claimed violations of the West Virginia Uniform Controlled Substances Act, the West Virginia Consumer Credit and Protection Act, public nuisance, negligence, and unjust enrichment, among its legal theories. After two and a half years of preliminary litigation—including multiple federal-versus-state jurisdictional arguments—the...