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/ Wednesday, January 14, 2009
[Federal Register: January 14, 2009 (Volume 74, Number 9)]
[Notices]
[Page 2101-2133]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14ja09-98]
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DEPARMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 05-16]
Lyle E. Craker; Denial of Application
On December 10, 2004, the Deputy Assistant Administrator, Office of
Diversion Control, issued an Order to Show Cause to Lyle E. Craker,
Ph.D. (Respondent), of Amherst, Massachusetts. The Show Cause Order
proposed the denial of Respondent's pending application for a
registration as a bulk manufacturer of marijuana on two grounds. Show
Cause Order at 1.
First, the Show Cause Order alleged that Respondent's
``registration would not be consistent with the public interest as that
term is used in 21 U.S.C. 823(a).'' Show Cause Order at 1. Second, the
Show Cause Order alleged that the Respondent's registration would be
inconsistent ``with the United States'
[[Page 2102]]
obligations under the Single Convention on Narcotic Drugs (Single
Convention), March 30, 1961, 18 U.S.T. 1407.'' Id.
With respect to both of these contentions, noting that Respondent
sought registration ``to supply analytical, pre-clinical and clinical
researchers with marijuana,'' the Show Cause Order emphasized that the
``National Institute on Drug Abuse (NIDA), a component [of] the
National Institutes of Health (NIH)'' and ``the United States
Department of Health and Human Services [HHS], oversees the
cultivation, production and distribution of research-grade marijuana on
behalf of the United States Government.'' Id. at 2.
With respect to the contention that Respondent's proposed
registration is inconsistent with the public interest, the Show Cause
Order stated that, under 21 U.S.C. 823(a), ``DEA must limit the number
of producers of research-grade marijuana to that which can provide an
adequate and uninterrupted supply under adequately competitive
conditions.'' Id. at 4. The Show Cause Order then stated: ``For the
past 36 years, the University of Mississippi has provided such supply
under the foregoing criteria, and there is no indication that this
registrant will fail to do so throughout the duration of its current
registration. While the University of Massachusetts is free to compete
with the University of Mississippi to obtain the next NIDA contract to
produce research-grade marijuana, there is no basis under Section
823(a) to add an additional producer.'' Id.
With respect to the contention of Respondent's sponsor, the
Multidisciplinary Association for Psychedelic Studies (MAPS), that
marijuana provided by NIDA to researchers was both qualitatively and
quantitatively inadequate, the Show Cause Order alleged that marijuana
provided by NIDA was ``of sufficient quantity and quality to meet'' the
needs of ``legitimate and authorized research[ers].'' Id. at 3.
The Show Cause Order also noted MAPS's contentions that ``NIDA is
limited to supplying marijuana for research purposes and cannot supply
marijuana on a prescription basis,'' that ``this limitation effectively
prohibits a sponsor * * * from expending the necessary large amounts of
funds to conduct drug development studies resulting in [a] marijuana
prescription product,'' and that granting Respondent a registration
would resolve this problem. Id. In response to these contentions, the
Show Cause Order alleged that to obtain approval for the marketing of a
new drug under the Food, Drug, and Cosmetic Act (FDCA), the safety and
effectiveness of the drug must be demonstrated through three phases of
clinical trials, and that clinical trials involving marijuana had not
progressed beyond the first phase (phase 1). Id. at 2-4.
The Show Cause Order further noted that the policy of HHS for
approving the distribution of marijuana to researchers ``has not unduly
limited clinical research with marijuana.'' Id. at 5. More
specifically, the Show Cause Order alleged that ``[s]ince the year
2000, there have been or are eleven approved clinical trials utilizing
smoked marijuana,'' and that approved ``marijuana researchers
administer marijuana to almost 500 human subjects.'' Id. The Show Cause
Order also alleged that since 2000, there were ``four approved pre-
clinical trials in laboratory and animal modes.'' Id. at 5. Relatedly,
the Show Cause Order also asserted that ``DEA has no statutory
authority to overturn HHS' policy.'' Id.
With respect to the contention that Respondent's registration would
be inconsistent with the United States' obligations under the Single
Convention, the Show Cause Order again referenced that HHS, through
NIDA, oversees the cultivation, production and distribution of
research-grade marijuana on behalf of the United States Government and
alleged that ``[i]n accordance with the Single Convention, the Federal
Government [is required] to limit marijuana available for clinical
research to [this] source.'' Id. at 4.
Respondent timely requested a hearing. The matter was assigned to
Administrative Law Judge (ALJ) Mary Ellen Bittner, who conducted a
hearing on August 22-26 and December 12-14 and 16, 2005. At the
hearing, the parties put on testimonial evidence and introduced
documentary evidence. Following the hearing, the parties submitted
briefs containing their proposed findings of fact, conclusions of law,
and argument.
On February 12, 2007, the ALJ issued her recommended decision.
Therein, the ALJ rejected the Government's contention that the Single
Convention precluded Respondent's registration. In so holding, the ALJ
acknowledged that the Convention requires that its signatories maintain
a ``government monopoly on importing, exporting, wholesale trading, and
maintaining stocks.'' ALJ at 82. The ALJ reasoned, however, that ``[i]t
also appears, although it is not entirely clear, that the marijuana
grown by the National Center \1\ or by any other registrant for
utilization in research would qualify as either `medicinal' * * * or as
`special stocks' within the meaning of'' the Convention. Id. at 82
(citing Single Convention, art. 1, para. (1)(o) & (x)).
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\1\ The National Center is an entity of the University of
Mississippi which currently holds the contract with NIDA for growing
marijuana to supply United States researchers.
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The ALJ then turned to whether Respondent had established that his
registration would be consistent with the public interest when
considering the six enumerated factors of 21 U.S.C. 823(a). With
respect to the first factor, 21 U.S.C. 823(a)(1), the ALJ first recited
the relevant text of this provision, which requires DEA to consider
maintenance of effective controls against diversion by limiting the
manufacturing of schedule I or II controlled substances ``to a number
of establishments which can produce an adequate and uninterrupted
supply of these substances under adequately competitive conditions for
legitimate medical, scientific, research, and industrial purposes.''
ALJ at 82 (quoting Sec. 823(a)(1)). Noting that there is precedent for
the agency to interpret this provision in two distinct ways regarding
the issue of adequacy of competition (either by considering or not
considering the issue),\2\ the ALJ stated that she would evaluate the
issue in both ways. Id. at 83.
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\2\ The meaning of 21 U.S.C. 823(a)(1) and the competition issue
are discussed in detail in part C of the discussion section of this
final order.
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Under the first approach of interpreting 21 U.S.C. 823(a)(1) to
allow DEA to disregard the issue of adequacy of competition as long as
the agency finds that the applicant for registration would provide
effective controls against diversion, the ALJ concluded that ``there is
no evidence or contention that either Respondent or anyone working with
him would be likely to divert the marijuana from the growing or drying
or storage areas.'' Id.
The ALJ next rejected the Government's contention that there was a
risk of diversion because Mr. Rick Doblin, the Director of MAPS, would
determine who was to receive the marijuana. In so holding, the ALJ
reasoned that Mr. Doblin would not have physical possession of the
marijuana and that Respondent would only send marijuana to researchers
with DEA registrations and the requisite approval of HHS. ALJ at 84.
The ALJ thus concluded that ``the research project has procedures in
place to adequately protect against diversion of the marijuana'' and
that ``there is minimal risk of diversion.'' Id.
[[Page 2103]]
Under the second approach of interpreting 21 U.S.C. 823(a)(1) to
require DEA to consider whether competition is inadequate, the ALJ
first turned to whether the supply of marijuana currently available to
researchers through HHS is adequate. In this regard, the ALJ found that
while ``there have been some problems with the marijuana that the
National Center produces, * * * a preponderance of the evidence
establishes that the quality is generally adequate.'' Id. The ALJ
further found, however, that ``NIDA's system for evaluating requests
for marijuana for research has resulted in some researchers who hold
DEA registrations and requisite approval from [HHS] being unable to
conduct their research because NIDA has refused to provide them with
marijuana.'' Id. The ALJ thus concluded ``that the existing supply of
marijuana is not adequate.'' Id. The ALJ also concluded that
competition is inadequate within the meaning of 21 U.S.C. 823(a)(1).
Id. \3\ The ALJ thus held that the first public interest factor, 21
U.S.C. 823(a)(1), supported granting Respondent's application.
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\3\ In so finding, the ALJ rejected the Government's contention
that because the NIDA contract is open to competitive bidding,
adequate competition exists. According to the ALJ, ``[t]he question
is not * * * whether the NIDA process addresses that agency's needs,
but whether marijuana is made available to all researchers who have
a legitimate need for it in their research. As discussed above, I
answer that question in the negative.'' Id. at 85.
As further support for her conclusion, the ALJ reasoned that
``the NIDA contract requires the contractor to analyze'' marijuana
seized by law enforcement agencies, and that ``a qualified
cultivator may not be able to fulfill'' this requirement.''Id.
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Under the second public interest factor, 21 U.S.C. 823(a)(2), the
ALJ found that there was ``neither evidence nor contention that
Respondent has not complied with applicable laws'' and thus concluded
that this factor supported the granting of Respondent's application.
See id.
Under the third public interest factor, 21 U.S.C. 823(a)(3), as to
whether granting Respondent's application would promote technical
advances in the art of manufacturing controlled substances, the ALJ
found that Respondent has ``considerable experience in cultivating
medicinal plants, which might promote technical advances in the
cultivation of marijuana or developing new medications from it.'' ALJ
at 85-86. The ALJ nonetheless found that ``there is not sufficient
evidence in the record on which to base a finding as to whether
granting Respondent's registration would promote technical advances.''
Id. at 86.
Under the fourth public interest factor, 21 U.S.C. 823(a)(4), the
ALJ found that it was ``undisputed that Respondent has never been
convicted of any violation of any law pertaining to controlled
substances'' and therefore this factor weighed in favor of granting the
application. Id.
Under the fifth public interest factor, 21 U.S.C. 823(a)(5), the
ALJ considered Respondent's ``past experience in manufacturing
controlled substances and the existence of effective controls against
diversion.'' Id. The ALJ acknowledged that ``Respondent has no
experience in manufacturing controlled substances.'' Id. Noting that
Respondent ``does have experience in growing medicinal plants'' and
that ``the risk of diversion is minimal,'' the ALJ concluded that this
factor supported granted the application. Id.
Finally, under the sixth public interest factor, 21 U.S.C.
823(a)(6), in analyzing such other factors as are relevant to and
consistent with public health and safety, the ALJ rejected the
Government's contention that granting the application would
``circumvent[]'' HHS's policy with respect to the provision of
marijuana to researchers. Id. Reasoning that ``the NIH Guidance by its
own terms applies to marijuana that [HHS] makes available, [and] not
[to] marijuana that might be available from some other legitimate
source[,]'' the ALJ concluded that ``the NIH Guidance is not a factor
in determining whether Respondent's application should be granted.''
Id. The ALJ thus concluded that granting Respondent's application
``would be in the public interest,'' and recommended that I grant his
application. Id. at 87.
The Government excepted to the ALJ's decision on numerous grounds,
and Respondent filed a response to the Government's exceptions.
Thereafter, the record was forwarded to me for final agency action.
Having considered the record as a whole, I hereby issue this
Decision and Final Order. For reasons explained more fully below, I
reject the ALJ's legal conclusion ``that the Single Convention does not
preclude registering Respondent.'' Id. at 82. Moreover, I reject the
ALJ's finding that the proposed registration is consistent with the
public interest when considering the six factors enumerated in 21
U.S.C. 823(a). Id. at 82-86. I therefore reject the ALJ's
recommendation that the application be granted. See id. at 87.
Findings
Under Federal Law, marijuana and tetrahydrocannabinols (THC) are
schedule I controlled substances. 21 U.S.C. 812(c), Schedule I(c)(10) &
(17). Congress placed marijuana and THC in schedule I because the
substances have ``a high potential for abuse,'' ``no current accepted
medical use in treatment in the United States,'' and ``a lack of
accepted safety for use * * * under medical supervision.'' 21 U.S.C.
812(b)(1). See also 66 FR 20038 (2001) (denying petition to reschedule
marijuana from schedule I), petition for review dismissed, Gettman v.
DEA, 290 F.3d 430 (D.C. Cir. 2002).\4\
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\4\ As related in the Notice, the FDA recommended that marijuana
be maintained in schedule I of the CSA. The FDA based its finding
on, inter alia, the extensive evidence that marijuana has a history
and pattern of abuse, that it is ``[t]he most frequently used
illicit drug,'' and that it ``has a high potential for abuse.'' 66
FR at 20047 & 20051. The FDA also found that ``[t]here are not FDA-
approved medical products,'' ``marijuana does not have a currently
accepted medical use in treatment in the United States or a
currently accepted medical use with severe restrictions,'' and
``that, even under medical supervision, marijuana has not been shown
to have an acceptable level of safety.'' 66 FR at 20052.
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Marijuana is cultivated from the cannabis plant, which is
recognized as ``a very adaptive plant [whose] characteristics are even
more variable than most plants.'' GX 25, at 7. Marijuana, which
consists primarily of the dried flowering tops and leaves of the
cannabis plant,\5\ ``is a variable and complex mixture of biologically
active compounds.'' Id. As of 2001, 483 different chemical constituents
had been identified in marijuana, including approximately 66
cannabinoids.\6\ 66 FR at 20041; Tr. 1142, 1147. ``THC \7\ is the main
psychoactive cannabinoid in marijuana''; the plant, however, also
contains ``[v]arying proportions of other cannabinoids, mainly
cannabidiol (CBD) and cannabinol (CBN),'' which ``sometimes [exist] in
quantities that might modify the pharmacology of THC or cause effects
of their own.'' Id. at 7-8.
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\5\ The legal definition of marijuana, as set forth in the CSA,
21 U.S.C. 802(16), is as follows: The term ``marihuana'' means all
parts of the plant Cannabis sativa L., whether growing or not; the
seeds thereof; the resin extracted from any part of such plant; and
every compound, manufacture, salt, derivative, mixture, or
preparation of such plant, its seeds or resin. Such term does not
include the mature stalks of such plant, fiber produced from such
stalks, oil or cake made from the seeds of such plant, any other
compound, manufacture, salt, derivative, mixture, or preparation of
such mature stalks (except the resin extracted therefrom), fiber,
oil, or cake, or the sterilized seed of such plant which is
incapable of germination.
\6\ Cannabinoids are chemical compounds that are unique to the
cannabis plant (not found in any other plant). Tr. 1140-41.
\7\ While there are numerous isomers of THC (all of which fall
within the listing of ``Tetrahydrocannabinols'' in schedule I of the
CSA and many of which are found in the cannabis plant), delta-9-THC
is the isomer that is recognized as the primary psychoactive
component in marijuana and, for this reason the term ``THC'' is
often used to refer to delta-9-THC. See 66 FR at 20045; Tr. 1146-47.
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[[Page 2104]]
The National Center and NIDA's Drug Supply Program
Since 1968, the National Center for Natural Products Research
(National Center), a division of the University of Mississippi, has
held a contract with the Federal Government to grow marijuana for
research purposes and held the requisite registrations under the
Controlled Substances Act (CSA), as well as the federal law that
preceded the CSA, authorizing the University to conduct such
activity.\8\ Tr. 1152-53, 1350-51. See also 21 CFR 1301.13. The
contract, which is open for competitive bidding at periodic intervals,
see GX 15, is administered by NIDA, a component of NIH (which is part
of HHS), pursuant to its Drug Supply Program. RX 1, at 231. Since 1999,
the term of the contract has been five years. See GXs 13 & 15; Tr.
1156.
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\8\ Initially, the National Center obtained a researcher's
registration; it now also holds a manufacturer's registration.
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Under the NIDA contract, the National Center ``[g]row[s],
harvest[s], store[s], ship[s] and analyze[s] cannabis of different
varieties, as required.'' GX 13, at 6. The contract requires that the
National Center ``shall serve as NIDA's cannabis drug repository,'' as
well as ``develop and produce standardized marijuana cigarettes within
a range of specified THC content, and placebos for use in pre-clinical
and clinical research programs,'' and maintain minimum stocks of both
bulk marijuana and marijuana cigarettes of various THC contents, and
store them in a DEA approved facility. Id. at 6-7.
Marijuana potency is primarily based on the concentration
(percentage by weight) of THC in the plant material. Tr. 1148-49. As of
August 25, 2005, the National Center held on behalf of NIDA
approximately 1055 kilograms (kg) of marijuana with THC contents
ranging up to 12.26 percent. See RX 53. This inventory includes six
batches of marijuana with THC contents ranging from 9.02 to 9.89
percent,\9\ one batch (of nearly 19 kg) with a THC content of 10
percent, nearly 25 kg with a THC content of 11.34 percent, and
approximately 27 kg with a THC content of 12.26 percent.\10\ See id. In
his testimony, Mahmoud ElSohly, Ph.D., who is the Principal
Investigator under the NIDA contract, and who has overseen the National
Center's work with marijuana since 1980, stated that the Center is
capable of producing marijuana with a THC content of 20 percent or
more.\11\ Tr. 1130-31, 1152, 1203, 1254-55.
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\9\ These batches range from approximately 12 to 15 kg in size.
\10\ As of the date of the hearing, more than 920,000 marijuana
cigarettes of various THC concentrations including placebo had been
manufactured pursuant to the NIDA contracts between 1974 and 2003.
GX 27.
\11\ 11 As Dr. ElSohly explained, he has grown numerous strains
of marijuana from seeds that have been obtained from a variety of
countries and has used them to do ``genetic selection to have
genetic material of high potency.'' Tr. 1255.
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The contract also requires the National Center to ``ship to
research investigators as authorized by the [NIDA] Project Officer upon
receipt of a shipment order.'' GX 13, at 7. While the NIDA ``Project
Officer may pre-authorize any normal recurring requests that the
contractor will then fill once it has received'' various
assurances,\12\ the contract further states that ``[a]ll other requests
should be submitted to the NIDA Project Officer for approval.'' Id. at
8. Moreover, ``[i]f there is a reason to question a particular request,
the Contractor shall inform the NIDA Project Officer who will make a
final decision on providing the material and quantity requested.'' Id.
As these provisions make clear, the National Center has no authority to
distribute any of the marijuana it produces pursuant to the NIDA
contract without NIDA's approval.\13\
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\12\ These include that the researcher have the appropriate DEA
registration and FDA/IND approvals, provide assurance that the
marijuana ``will not be resold'' and ``will be used only for
research or patient purposes,'' that the use of the marijuana will
adhere to the appropriate Safety Standards for research,'' and that
the researcher agree ``to comply with all Federal, State and Local
Safety requirements for use of the materials.'' See GX 13, at 8.
\13\ Independent of its contract with NIDA, the National Center
holds an additional registration to manufacture marijuana and THC.
GXs 75 & 78. The National Center was granted this registration under
the terms of a Memorandum of Agreement (MOA) entered into with DEA
in 1999. GX 78. As set forth in the MOA, the purpose of the
registration was ``to allow the Center to develop a new product
formulation for effecting delivery of [THC] in a pharmaceutically
acceptable dosage form suppository * * * and to provide crude THC
extract to a DEA-registered manufacturer of THC for further
purification.'' Id. at 2. The MOA further stated that, under the
terms thereof, the Center would ``manufacture marijuana for the
purpose of extracting THC therefrom.'' Id. Subsequently, the Center
submitted a new application for a registration to bulk manufacture
marijuana and THC ``to prepare marihuana extract for further
purification into bulk active [THC] for use in launching FDA-
approved pharmaceutical products.'' 70 FR 47232 (2005). DEA has not
yet issued a final order as to this application. (DEA publishes in
the Federal Register all final orders on applications for
registration to bulk manufacture schedule I and II controlled
substances.)
The MOA further provided that ``[i]n accordance with articles 23
and 28 of the Single Convention on Narcotic Drugs * * * private
trade in `cannabis' is strictly prohibited. Therefore, the Center
shall not distribute any quantity of marijuana to any person other
than an authorized DEA employee.'' GX 78, at 2. Continuing, the MOA
explained that ``[t]he Single Convention does not prohibit private
trade in `cannabis preparations,' '' and noted that this term,
``within the meaning of the Single Convention, is a mixture, solid
or liquid containing cannabis, cannabis resin, or extracts or
tinctures of cannabis.'' Id. Because ``[t]he THC that the Center
will extract from marijuana [is] considered such a `cannabis
preparation[,]' * * * the Center may, in accordance with the Single
Convention, distribute the crude THC extract to private entities''
provided the Center otherwise complies with the CSA and DEA
regulations. Id. at 2-3. The MOA also set forth a detailed series of
controls to maintain accountability of the marijuana from
acquisition of the seeds through the extraction of THC from the
harvested material. Id. at 3-7.
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In 1997, the White House Office of National Drug Control Policy
asked the Institute of Medicine (IOM), a component of the National
Academy of Sciences, to conduct a review of the scientific evidence
regarding the potential health benefits and risks of marijuana and its
constituent cannabinoids. RX 1, at 7. In 1999, the IOM published its
report. The IOM found, among other things, that ``[d]efined substances,
such as purified cannabinoid compounds, are preferable to plant
products, which are of variable and uncertain composition. Use of
defined cannabinoids permits a more precise evaluation of their
effects, whether in combination or alone.'' RX 1, at 22. With respect
to this issue, the IOM reached the following conclusion: ``Scientific
data indicate the potential therapeutic value of cannabinoid drugs,
primarily THC, for pain relief, control of nausea and vomiting, and
appetite stimulation; smoked marijuana, however, is a crude THC
delivery system that also delivers harmful substances.'' Id. The report
further stated:
The therapeutic effects of cannabinoids are most well
established for THC, which is the primary psychoactive ingredient of
marijuana. But it does not follow from this that smoking marijuana
is good medicine.
Although marijuana smoke delivers THC and other cannabinoids to
the body, it also delivers harmful substances, including most of
those found in tobacco smoke. In addition, plants contain a variable
mixture of biologically active compounds and cannot be expected to
provide a precisely defined drug effect. For those reasons there is
little future in smoked marijuana as a medically approved
medication. If there is any future in cannabinoid drugs, it lies
with agents of more certain, not less certain, composition.'' \14\
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\14\ To similar effect, an ad hoc group of experts, who were
selected by NIH and convened in 1997 as part of a workshop to assess
the potential medical uses of marijuana, issued a report to the
Director of NIH, which noted:
As with any smoked drug (e.g., nicotine or cocaine),
characterizing the pharmacokinetics of THC and other cannabinoids
from smoked marijuana is a challenge. A person's smoking behavior
during an experiment is difficult for a researcher to control.
People differ. Smoking behavior is not easily quantified. An
experienced marijuana smoker can titrate and regulate doses to
obtain the desired acute psychological effects and to avoid overdose
and/or minimize undesired effects. Each puff delivers a discrete
dose of THC to the body. Puff and inhalation volume changes with
phase of smoking, tending to be highest at the beginning and lowest
at the end of smoking a cigarette. * * * During smoking, as the
cigarette length shortens, the concentration of THC in the remaining
marijuana increases; thus, each successive puff contains an
increasing concentration of THC.
One consequence of this complicated process is that an
experienced marijuana smoker can regulate almost on a puff-by-puff
basis the dose of THC delivered to lungs and thence to brain. A less
experienced smoker is more likely to overdose or underdose. Thus a
marijuana researcher attempting to control or specify dose in a
pharmacologic experiment with smoked marijuana has only partial
control over the drug dose actually delivered.
See GX 25, at 9-10 (Workshop on the Medical Utility of
Marijuana).
[[Page 2105]]
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Id. at 195-96. See also GX 53 (letter from Alice P. Mead, GW
Pharmaceuticals, P.L.C., to Christine V. Beato, Acting Asst. Sec. for
Health, HHS (Apr. 12, 2005)) (``[H]erbal cannabis should comprise only
the starting material from which a bona fide medical product is
ultimately derived. * * * [S]tandardizing herbal starting material
represents only the first of many steps necessary to create a modern
medicine that is safe and effective for use in specific medical
conditions. * * * [A] final medical product * * * must also be
delivered in a dosage form that is consistent in composition and that
allows the patient to obtain an identifiable and reliable amount of
medication.'') (emphasis in original).
Accordingly, the IOM recommended that clinical trials using
cannabinoid drugs should be conducted with ``the goal of developing
rapid-onset, reliable, and safe delivery systems.'' Id. at 197. The IOM
also advised that clinical trials involving smoked marijuana ``should
involve only short-term marijuana use (less than six months), should be
conducted in patients with conditions for which there is a reasonable
expectation of efficacy, should be approved by institutional review
boards, and should collect data about efficacy.'' Id.
Also in 1999, due in part to an increased interest in marijuana
research and taking into account the IOM report, HHS decided to change
the procedures by which it would supply marijuana to researchers. Tr.
1632-33; GX 24. The new procedures were announced in a document
released by NIH on May 21, 1999. GX 24, at 1. In the announcement,
``HHS recognize[d] the need for objective evaluations of the potential
merits of cannabinoids for medical uses[,]'' and that ``[i]f a positive
benefit is found, * * * the need to stimulate development of
alternative, safer dosage forms.'' Id. at 2. Toward this end, NIH
explained that the new procedures were designed to increase the
availability of marijuana for research purposes by, among other things,
making such marijuana ``available on a cost-reimbursable basis.'' Id.
This new procedure allowed researchers who were privately funded to
obtain marijuana from HHS by reimbursing the NIDA contractor for the
cost of the marijuana. Tr. 1633; see also GX 31, at 3. This was a
departure from the prior practice (pre-1999), whereby HHS only made
marijuana available to persons who received NIH funding. Id. The new
procedures implemented by HHS in 1999 remain in effect today. Tr. 1629.
HHS further stated in 1999 that it intended through the new
procedures ``to make available a sufficient amount of research-grade
marijuana to support those studies that are the most likely to yield
usable, essential data.'' GX 24, at 2. With respect to those
researchers who do not have NIH funding, HHS explained that ``the
scientific merits of each protocol will be evaluated through a Public
Health Service interdisciplinary review process [which] will take into
consideration a number of factors, including the scientific quality of
the proposed study, the quality of the organization's peer-review
process, and the objective of the proposed research.'' Id.
HHS then identified the criteria it would apply in evaluating
requests for marijuana:
The extent to which the protocol incorporates the elements of
good clinical and laboratory research;
The extent to which the protocol describes an adequate and well-
controlled clinical study to evaluate the safety and effectiveness
of marijuana and its constituent cannabinoids in the treatment of a
serious or life threatening condition;
The extent to which the protocol describes an adequate and well-
controlled clinical study to evaluate the safety and effectiveness
of marijuana and its constituent cannabinoids for a use for which
there are no alternative therapies;
The extent to which the protocol describes a biopharmaceutical
study designed to support the development of a dosage form
alternative to smoking; [and]
The extent to which the protocol describes high-quality research
designed to address basic, unanswered scientific questions about the
effects of marijuana and its constituent cannabinoids or about the
safety or toxicity of smoked marijuana.
Id. at 3.
HHS further noted that ``[a] clinical study involving marijuana
should include certain core elements,'' and that ``[a] study that
incorporates the [1997] NIH Workshop recommendations will be expected
to yield useful data and therefore, will be more likely to receive
marijuana under the HHS program.'' Id.
Finally, HHS explained that the ``proposed protocols must be
determined to be acceptable under FDA's standards for authorizing the
clinical study of investigational new drugs.'' Id. Relatedly, HHS
stated that ``although FDA's review of Phase 1 submissions will focus
on assessing the safety of Phase 1 investigations, FDA's review of
Phases 2 & 3 submissions will also include an assessment of the
scientific quality of the clinical investigations and the likelihood
that the investigations will yield data capable of meeting statutory
standards for marketing approval.'' Id. HHS further made clear that if
a protocol is approved, ``NIDA will provide the researcher with
authorization to reference NIDA's marijuana Drug Master File.'' Id. at
4.
At the administrative hearing in this case, Steven Gust, Ph.D.,
Special Assistant to the Director of NIDA, explained that, in addition
to seeking to facilitate research into the possible medical utility of
marijuana, the new procedures implemented by HHS in 1999 were intended
``to make the process more standardized, and to * * * provide some
expertise that did not really exist at NIDA in terms of reviewing
applications that involved * * * the use of marijuana * * * for
treatment of diseases.'' Tr. 1632-33. Accordingly, HHS ``established a
separate peer review process that * * * moved the review into the
Public Health Service [a component of HHS] * * * where additional
expertise from other NIH Institutes and other Federal agencies'' could
be utilized in reviewing the scientific merit of the applications. Id.
at 1633-34. Dr. Gust further explained that the members of the review
committee are drawn from the various specialty institutes of NIH, and
the Substance Abuse and Mental Health Services Administration (SAMHSA).
Id. at 1692; 1713-15.\15\ Dr. Gust also testified that the ``scientific
bar has been set very low, [so] that any project that has scientific
merit is approved,'' and that ``anything that gets approved gets NIDA
marijuana.'' Id. at 1700-01. As of April 2004, HHS had approved at
least seventeen pre-clinical or clinical studies of marijuana, which
were sponsored by the California Center for Medical Cannabis Research
(CMCR).\16\ GX 31, at
[[Page 2106]]
3. According to one witness who testified on behalf of Respondent, all
of the CMCR-sponsored researchers who applied to NIDA for marijuana did
in fact receive marijuana from NIDA. Tr. 694-95.
---------------------------------------------------------------------------
\15\ Dr. Gust initially testified that someone from FDA sits on
the committee but later stated that he was not exactly sure if this
was so. Tr. 1712.
\16\ The California research studies were conducted pursuant to
a law enacted by California in 1999 known as the Marijuana Research
Act of 1999. Cal. Health & Safety Code Sec. 11362.9. This state law
established the ``California Marijuana Research Program'' to develop
and conduct studies on the potential medical utility of marijuana.
Id. (The program is also referred to as the ``Center for Medicinal
Cannabis Research'' (CMCR). Tr. 396.) The state legislature
appropriated a total of $9 million for the marijuana research
studies. Tr. 397. The state law was enacted following the passage of
Proposition 215, a ballot initiative otherwise known as the
Compassionate Use Act of 1996. Tr. 395-96; see also United States v.
Oakland Cannabis Buyers' Cooperative (``OCBC''), 532 U.S. 483, 486
(2001).
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Respondent's Application and Contentions
Respondent is a Professor in the Department of Plant, Soil and
Insect Sciences at the University of Massachusetts Amherst. Tr. 13. On
June 28, 2001, Respondent submitted an application to bulk manufacture
the schedule I controlled substances marijuana and
tetrahydrocannabinols.\17\ GXs 1 & 3; 21 CFR 1308.11(d). Respondent's
application is sponsored by the Multidisciplinary Associations for
Psychedelic Studies (MAPS). GX 3, at 1.
Because Respondent seeks a registration to manufacture a schedule I
controlled substance, DEA required that he complete a
questionnaire.\18\ In response to the question regarding the purpose
for which he sought registration, Respondent stated that ``[t]he plant
material will be grown for federally-approved uses only, including
analytical, pre-clinical, and clinical research,'' and that ``no
material is intended for illegal use or for medical marijuana patients
whose use may be legal under state, but not federal law.'' GX 3, at
1.\19\
---------------------------------------------------------------------------
\17\ On his application for registration (GX 1), Respondent
incorrectly checked the box for ``dosage form'' manufacturing when,
in fact (based on the activity in which he proposes to engage), he
is seeking to become registered as a ``bulk'' manufacturer. In
written questions DEA submitted to Respondent as a follow-up to the
application, DEA properly characterized the activity as ``bulk
manufacture,'' and Respondent, in his written answers to these
questions, gave no indication that he disagreed. See GX 3. Also, in
his testimony at the hearing, Respondent acknowledged that his plan
was to send marijuana ``in bulk'' to others, who would roll it into
cigarettes. Tr. at 243. Respondent also testified that MAPS
President Rick Doblin ``assisted in the response to the bulk
manufacturer's questions.'' Tr. 352 (emphasis added). Cf. 32 CFR
1300.02(b)(32) (defining ``drug product'' as ``an active ingredient
in dosage form that has been approved or otherwise may be lawfully
marketed under the Food, Drug, and Cosmetic Act for distribution in
the United States''); 21 CFR 1301.72(a) & 1304.22(a) (listing ``bulk
materials awaiting further processing'' separately from ``finished
products'').
\18\ As set forth in 21 CFR 1301.15: ``The Administrator may
require an applicant to submit such documents or written statements
of fact relevant to the application as he/she deems necessary to
determine whether the application should be granted.''
\19\ Respondent further testified that it was his intention to
simply send bulk marijuana to researchers who would then roll their
own cigarettes. Tr. at 243.
---------------------------------------------------------------------------
Respondent added that ``[t]he production costs * * * would be
underwritten by a grant'' from MAPS. Id. According to Respondent,
``MAPS is seeking to develop the marijuana plant into an FDA-approved
prescription medicine,'' and that ``[t]he growth of plants at [UMASS]
is a necessary step for supplying quality marijuana for use in MAPS'
drug development process.'' Id. Respondent also advised that ``MAPS
will sponsor research at other institutions using smoked marijuana and
marijuana delivered through a vaporizer device that heats, but does not
burn the plant material, thus reducing the products of combustion
normally found in smoked marijuana.'' Id.
Respondent further stated that his ``[c]ustomers would include both
MAPS-sponsored research and research sponsored by other
organizations.'' Id. at 3. Relatedly, Respondent explained that
``[r]esearchers conducting MAPS sponsored research would receive
supplies of the plant material free, while other researchers would
either receive the marijuana free or through a donation to MAPS.'' Id.
at 1. See also Tr. 225 (``I may very well be approached by other people
with approved studies who need a source also.'').
At the hearing, Mr. Rick Doblin, the President of MAPS,\20\ also
testified regarding the purpose of Respondent's application. Mr.
Doblin, who admitted that he engages in recreational use of marijuana
on a weekly basis, explained that ``[t]he reason we need a supply from
Dr. Craker is that we are engaged in trying to make marijuana into an
FDA-approved prescription medicine, and * * * we need to establish a
drug master file for a particular product, and * * * we need to conduct
research with that product, and have that product available to us for
potential marketing should we get FDA approval.'' Tr. 603, 718-19. Mr.
Doblin testified as to his ``belie[f] that smoked marijuana or
vaporized marijuana in plant form will successfully compete with
marijuana extracts on price.'' Id. at 605. He also testified as to his
belief that the ``efficacy and safety'' of vaporized plant-form
marijuana ``will be similar'' to drugs containing cannabinoid extracts
and that ``the efficacy will be similar and safety slightly different
with smoked'' marijuana than with drugs containing cannabinoid
extracts. Id.
Mr. Doblin further testified that he ``disagree[d]'' with the
Institute of Medicine's conclusion that defined and purified
cannabinoid compounds ``are preferable to plant products, which are of
variable and uncertain composition.'' Id. at 654. Mr. Doblin also
testified that ``what we're trying to do is get the Public Health
Service and NIDA out of the picture; they're only in the picture just
for marijuana only because they have a monopoly. And that is what is so
obstructing the system.'' Id. at 666.
---------------------------------------------------------------------------
\20\ When asked during the hearing about the title of his
organization (Multidisciplinary Association for Psychedelic Studies)
and, in particular the term ``Psychedelic,'' Mr. Doblin explained,
in part, ``it's about tools and procedures that bring to the surface
people's subconscious and unconscious and, you know, deeper
emotions.'' Tr. 474.
---------------------------------------------------------------------------
Finally, Mr. Doblin testified that MAPS would only need between $5
to $10 million ``to make marijuana into a medicine'' through the
various stages of the FDA new drug approval (NDA) process.\21\ Id. at
701; see also id. at 703. In his testimony, Mr. Doblin did not,
however, identify a single instance in which an entity (whether for-
profit or nonprofit) had taken a drug--let alone a botanical substance
with known safety issues, See, e.g., GX 43, at 9--through the multi-
faceted NDA process for a similar cost.\22\ Moreover, while Mr.
[[Page 2107]]
Doblin testified that ``the mission statement [of MAPS] is to develop
psychedelics and marijuana into FDA-approved medicines and then to
educate the public about that'' (Tr. 478), the vagaries of his
testimony prevent a clear determination of how far along in that goal
he envisions MAPS to be.\23\
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\21\ In a recent Supreme Court decision, Justice Ginsberg, in a
dissenting opinion, summarized the process by which FDA approves new
drugs for marketing as follows:
The process for approving a new drug begins with preclinical
laboratory and animal testing. The sponsor of the new drug then
submits an investigational new drug application seeking FDA approval
to test the drug on humans. See 21 U.S.C. 355(i); 21 CFR 312.1 et
seq. (2007). Clinical trials generally proceed in three phases
involving successively larger groups of patients: 20 to 80 subjects
in phase I; no more than several hundred subjects in phase II; and
several hundred to several thousand subjects in phase III. 21 CFR
312.21. After completing the clinical trials, the sponsor files a
new drug application containing, inter alia, ``full reports of
investigations'' showing whether the ``drug is safe for use and * *
* effective''; the drug's composition; a description of the drug's
manufacturing, processing, and packaging; and the proposed labeling
for the drug. 21 U.S.C. 355(b)(1).
Riegel v. Medtronic, Inc., 128 S.Ct. 999, 1018-19 n.15 (2008)
(Ginsburg, J., dissenting).
\22\ While Respondent produced evidence establishing that the
$800-880 million costs of bringing a new drug to market includes
research and development costs incurred for drugs that are not
approved, as well as opportunity costs (the cost of investing in
research rather than something else), see Tr. 161, 734-36,
Respondent has not shown a single instance in which an entity has
obtained FDA approval of a drug through the NDA process for the cost
range which Mr. Doblin claimed would be sufficient to obtain
approval of plant-form marijuana.
Moreover, the IOM Report states that the average cost of a
Supplemental New Drug Application (SNDA), which is used when a
company seeks to obtain FDA approval to market a drug (which has
already gone through the three phases of clinical trials and been
approved for marketing) for a new indication, was $10 to 40 million.
RX 1, at 214. It should be noted, however, that in taking a drug
through the three phases, its sponsor will have obtained extensive
data regarding the drug's safety including ``adverse effects of the
drug [and] clinically significant drug/drug interactions.'' 21 CFR
314.50(d)(5)(vi).
In support of his assertion that MAPS could obtain FDA approval
for only $5 to $10 million, Mr. Doblin testified that marijuana is
different than other drugs that go through the FDA approval process.
Mr. Doblin based this assertion on his contentions that: marijuana
has been used by ``tens of millions of people'' while others drugs
going though the NDA process are only used by a few thousand; there
is ``an enormous body of evidence about [marijuana's] safety * * *
that we don't need to replicate;'' and sufficient data to satisfy
the FDA as to marijuana's safety and efficacy could be obtained by
testing only 500 to 600 people. Id. at 737-38.
The FDA's guidance document for botanical drug products makes
plain that ``[a] botanical drug product that is not generally
recognized as safe and effective for its therapeutic claims is
considered a new drug under Sec. 201(p) of the [Food, Drug, and
Cosmetic] Act,[]'' and that ``any person wishing to market a
botanical drug product that is a new drug is required to obtain FDA
approval of an NDA * * * for that product.'' GX 92A, at 7. Moreover,
``an NDA must contain substantial evidence of effectiveness derived
from adequate and well-controlled clinical studies, evidence of
safety, and adequate CMC [chemistry, manufacturing, and controls]
information.'' Id. See also GX 92A, at 27-38 (specifying the
information that must be provided to FDA for phase 3 clinical
studies of a botanical product to meet the requirements of the FDA
regulations governing the contents of INDs). Finally, with respect
to the nonclinical safety assessment required to support phase 3
clinical trials, the FDA guidance states:
To support safety for expanded clinical studies or to support
marketing approval of a botanical drug product, toxicity data from
standard toxicology studies in animals may be needed * * * . A
botanical product submitted for marketing approval as a drug will be
treated like any other new drug under development. Safety data from
previous clinical trials conducted in foreign countries will be
considered in determining the need for nonclinical studies. However,
previous human experience may be insufficient to demonstrate the
safety of a botanical product, especially when it is indicated for
chronic therapy. Systematic toxicological evaluations could be
needed to supplement available knowledge on the general toxicity,
teratogenicity, mutagenecity, and carcinogenicity of the final drug
product.
Id. at 34. While Mr. Doblin asserted that MAPS would not ``need
to replicate all those studies about the genetics, * * * the effect
on reproduction, the effect in all sorts of bodily systems,'' Tr.
737, he did not identify any specific studies performed in other
countries that establish the safety of marijuana for testing in
phase 3 clinical studies. While millions of people have undoubtedly
used marijuana, few have done so subject to the scientific rigor of
a controlled clinical trial. Nor did Respondent produce any credible
evidence establishing that the various types of animal studies which
FDA usually requires to support phase 3 clinical trials would not
have to be performed. GX 92A, at 35-37.
\23\ As indicated above, based on the record, no clinical trials
involving marijuana have advanced beyond phase 1. Moreover, each
sponsor must submit to FDA his/her own IND to be authorized to
conduct clinical investigation with a new drug (such as marijuana).
See 21 CFR 312.20, 312.23. Again, given the vagaries of Mr. Doblin's
testimony, it cannot be determined whether there is sufficient
existing preclinical laboratory and animal studies data to support a
submission of an IND for whatever proposed indications that Mr.
Doblin has in mind for his envisioned FDA-approved marijuana
medicine. But even assuming, arguendo, that MAPS could successfully
submit an IND based on existing data, it would still have to proceed
through extensive clinical trials (see 21 CFR 312.21), and then--
assuming that such trials are fully successful at demonstrating the
basis for safety and efficacy (which often is not the case with
clinical trials)--MAPS would still have to submit and obtain
approval of an NDA. All of these steps, and the uncertainties as to
the outcomes of each step, further call into question Mr. Doblin's
estimate of being able to obtain FDA approval of marijuana for only
$5 to $10 million.
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Correspondence Pertaining to the Application
Subsequent to Respondent's submission of his application for a DEA
registration, on March 4, 2003, the Chief of DEA's Drug and Chemical
Evaluation Section wrote to Respondent noting that ``it appears that
the basis for your application is the purported need for a higher
potency and higher 'quality' marijuana product than that currently
available from the National Institute on Drug Abuse.'' GX 29, at 1. The
DEA letter further explained that the Agency had ``contacted NIDA, the
Department of Health and Human Services * * * and some current
researchers'' and had ``determined that * * * the quality of marijuana
available from NIDA is acceptable,'' that a high potency product with a
THC content of 7 to 8 percent was currently ``available to bona fide
research protocols,'' and that if ``[i]n the future, should federally
approved research protocols require a higher potency marijuana (i.e. 15
percent THC), all believe that it could be supplied by NIDA.'' Id.
Thereafter, on June 2, 2003, Respondent wrote to DEA acknowledging
that during a visit with several agency Diversion Investigators, the
discussion had ``primarily focused[ed] on the need for an alternative
source of plant material to that grown at the University of Mississippi
under contract to the National Institute of Drug Abuse (NIDA).'' GX 30.
Continuing, Respondent stated that ``[a] second source of plant
material is needed to facilitate privately-funded, FDA-approved
research into medical uses of marijuana, ensuring a choice of sources
and an adequate supply of quality, research-grade marijuana for
medicinal applications.'' Id. Consistent with these statements,
Respondent has declined to bid on the NIDA contract. Tr. 252-53.
Respondent further asserted that while ``the primary researchers
now receiving plant material may openly state to you that they are
satisfied with the current source, * * * in private conversations these
same researchers indicate a fear of having the current supply
eliminated if they complain about the available source material.'' GX
30. As support for his contention regarding the level of researcher's
satisfaction with NIDA's marijuana, Respondent attached two items: a
reprint of a newspaper article and a letter from a Dr. Ethan Russo to
the then-Chief of DEA's Drug and Chemical Evaluation Section. See GX
30a & 30b.
At the hearing, Respondent testified that at the time he filed his
application, he had become concerned, based on conversations he had
with ``other people,'' that the marijuana provided by the National
Center ``may have been of relatively low quality, and that [it] was not
readily available to run the clinical trials which some people wanted
to run.'' Tr. 215. When asked to provide the names of these ``other
people'' who had told him this, Respondent said he did not recall. Id.
Respondent's Contentions Regarding the Inadequacy of NIDA Marijuana
Respondent makes three principal claims in support of his
contention that the supply of marijuana currently available through
NIDA is inadequate. First, he claims that ``NIDA does not provide
medical marijuana to all legitimate researchers'' and that ``NIDA has
refused to provide marijuana to at least three legitimate
researchers.'' Resp. Prop. Findings at 12. Second, he claims that ``the
quality of the NIDA marijuana raises concerns for researchers and
patients.'' Id. at 16. Third, he claims that ``the NIDA supply was
inadequate because a pharmaceutical developer could not reasonably rely
on NIDA marijuana to take marijuana through the FDA new drug approval
process.'' Respondent's Response to Govt.'s Exceptions (hereafter,
``Respondent's Resp.'') at 16.
HHS's Denials of Researcher's Requests for NIDA Marijuana
Respondent's first claim is based on three incidents over a decade-
long time period in which he alleges that researchers were improperly
denied access to NIDA's marijuana. The first incident, which occurred
in 1995, involved an application submitted by Donald Abrams, M.D., who
sought
[[Page 2108]]
marijuana from NIDA to study its effects on persons with HIV-related
wasting syndrome. RX 15, at 1. NIDA rejected Dr. Abrams's application
``based upon issues of design, scientific merit and rationale.'' \24\
Dr. Abrams subsequently submitted a revised research protocol that NIDA
found to be scientifically meritorious and for which NIDA supplied
marijuana in 1997.\25\ See GX 21, at 1. NIDA also supplied Dr. Abrams
with marijuana for subsequent studies. Id.; Tr. 689. In any event, for
purposes of determining the relevance of the 1995 incident in which Dr.
Abrams' original protocol was rejected by NIDA, it is notable that this
occurred before HHS adopted its new guidelines for the provision of
marijuana for research purposes. As Dr. Gust testified, in 1995, HHS's
practice was to provide marijuana only to researchers who obtained NIH
funding--a practice that was abandoned by HHS in 1999 when the agency
adopted its new procedures for facilitating marijuana research
(allowing privately funded researchers to also obtain marijuana). Tr.
1749.
---------------------------------------------------------------------------
\24\ That the above-quoted grounds were the bases upon which
NIDA denied Dr. Abrams' original application is implicit from the
letter that Dr. Abrams submitted to NIDA in response to the denial
(RX 15). These bases are explicitly stated in NIDA's April 19, 1995,
letter to Dr. Abrams, which appears on MAPS' Web site (at http://
www.maps.org/mmj/leshner.html) and of which I take official notice.
This letter from NIDA stated, among other things, the following:
Our decision here is based upon issues of design, scientific
merit and rationale. We believe that your study will not adequately
answer the question posed.
Although the study propose[d] seeks to make a dose-effect
comparison of smoked marijuana to delta-9-tetrahydrocannabinol
(THC), there is no real dosing control. The marijuana is to be taken
home and there is no requirement and way to ensure that the subjects
smoke all available materials on any fixed schedule. Additionally,
that they are given a two-week supply of marijuana at one time
further confounds the study design. Thus, we believe the dose-effect
component is confounded since the study cannot correlate variability
in weight gain with dosage.
We also believe the study lacks adequate sample size to make any
inferences regarding the dose-effect relationship. . . . Another
confounding variable not adequately controlled for in your proposed
study is diet. Neither the total daily caloric intake nor the
percentages of the composition of the foodstuffs is assessed.
In accordance with the Administrative Procedure Act (APA), an
agency ``may take official notice of facts at any stage in a
proceeding--even in the final decision.'' U.S. Dept. of Justice,
Attorney General's Manual on the Administrative Procedure Act 80
(1947) (Wm. W. Gaunt & Sons, Inc., Reprint 1979). In accordance with
the APA and DEA's regulations, Respondent is ``entitled on timely
request to an opportunity to show to the contrary.'' 5 U.S.C.
556(e); see also 21 CFR 1316.59(e). To allow Respondent the
opportunity to refute the facts of which I take official notice,
Respondent may file a motion for reconsideration within fifteen days
of service of this order which shall commence with the mailing of
the order.
\25\ Following the 1996 passage of proposition 215, NIDA
contacted Dr. Abrams and asked him if he would redesign his study to
determine whether marijuana usage by persons who were HIV-positive
(but who did not have AIDS-wasting syndrome) increased viral load as
well as the interaction of marijuana with protease inhibitors. Tr.
523-24. Dr. Abrams agreed to do so and NIDA provided him with a $1
million grant to fund the study.
---------------------------------------------------------------------------
The second incident involved an application by Dr. Ethan Russo, a
neurologist, who sought funding from NIDA to study the use of marijuana
to treat migraine headaches beginning around 1996. Tr. 527-28. The
precise dates of the events related to Dr. Russo are somewhat unclear
as Respondent presented these events through the testimony of Mr.
Doblin. (Dr. Russo did not testify.) Id. Based on Mr. Doblin's
testimony, it appears that during 1996-97, NIDA twice rejected Dr.
Russo's protocol for reasons which are not clearly established by the
record. Id. at 527, 691-92. However, according to Mr. Doblin, Dr. Russo
conceded that, on both of these two occasions when NIDA rejected his
protocol, NIDA's bases for doing so did include ``some valid
critiques.'' Tr. 692. Mr. Doblin testified that Dr. Russo subsequently
attempted for a third time to obtain marijuana from NIDA, but on this
third occasion he decided not to seek government funding but to seek
private funding to purchase the marijuana from NIDA. Id. at 692.
According to Mr. Doblin, this third protocol submitted by Dr. Russo was
approved by both the FDA and Dr. Russo's institutional review board,
but NIDA again refused to supply marijuana. Id. at 692-93. When asked
when this last denial by NIDA occurred, Mr. Doblin testified: ``I think
it was 1999.'' Id. at 693.
As noted above, NIH announced on May 21, 1999, HHS's new procedures
for making marijuana available to researchers. Bearing in mind that
Respondent had the burden of proving any proposition of fact that he
asserted in the hearing, 21 CFR 1301.44(a), nothing in Mr. Doblin's
testimony, or any other evidence presented by Respondent, established
that HHS denied Dr. Russo's request for marijuana under the new
procedures implemented by the agency in 1999. Indeed, Respondent
produced no evidence showing that HHS has denied marijuana to any
clinical researcher with an FDA-approved protocol subsequent to the
adoption of the 1999 guidelines.
The third incident involved an application by Chemic Laboratories
(Chemic), which--at the request of Mr. Doblin--sought marijuana from
NIDA in 2004 \26\ for a proposed study involving a device known as the
``Volcano Vaporizer'' (hereafter ``Volcano''). RX 49 & 52B. To
understand the nature and purpose of this proposed study, some earlier
facts that were disclosed at the hearing need to be considered.
According to Mr. Doblin's testimony, prior to this incident (i.e.,
before Chemic applied to NIDA for marijuana in 2004), Mr. Doblin had
devised an elaborate arrangement whereby Chemic received marijuana to
conduct an earlier study with the Volcano using marijuana obtained
outside of the HHS process and without the knowledge or approval of HHS
or DEA. Specifically, Mr. Doblin admitted that he encouraged persons
who obtained marijuana from ``buyers' clubs'' in California as well as
persons who obtained their marijuana from NIDA under HHS's
``compassionate use program'' \27\ to anonymously send their marijuana
to a DEA-registered drug testing laboratory so that MAPS could compare
the potency of the ``buyers' clubs'' marijuana with that supplied by
NIDA.\28\ Tr. 668-82. Acting at the behest of Mr. Doblin, once the drug
testing laboratory completed its analysis of the marijuana it received
through these sources, it delivered the ``extra'' marijuana to Chemic,
so that Chemic could conduct testing on the Volcano. Id. Chemic did
conduct such testing,\29\
[[Page 2109]]
which was funded by MAPS and the California National Organization for
the Reform of Marijuana Laws (CaNORML), and Chemic published its
results in two reports, one of which was co-authored by CaNORML.\30\
See id.
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\26\ It appears from the record that Chemic initially applied to
HHS for marijuana in 2003 but, at HHS's request, Chemic submitted a
revised protocol, which HHS considered to be submitted in 2004. See
GXs 49 & 52B.
\27\ See Kuromiya v. United States, 78 F.Supp.2d 367 (E.D. Pa.
1999) (describing compassionate use program under which less than 10
persons currently receive marijuana from HHS).
\28\ Because marijuana is a schedule I controlled substance,
human use is limited to ``Government-approved research'' in
accordance with 21 U.S.C. 823(f). See OCBC, 532 U.S. at 491-492 and
n.5. In accordance with Sec. 823(f) and the DEA regulations, where
a schedule I controlled substance is used in research--including the
HHS compassionate use program--the activities involving the
substance must be limited to those authorized in the research
protocol. See 21 CFR 1301.13(e)(1)(v), 1301.18. Research activities
beyond those specified in the protocol are prohibited absent the
submission and approval of a supplemental protocol. 21 CFR
1301.18(d). Respondent made no attempt to assert that any of the
research protocols associated with the compassionate use program
allow for the distribution of marijuana to a drug testing
laboratory, as there is no basis for such an assertion. The CSA
prohibits the distribution of any controlled substance except as
authorized by the Act, 21 U.S.C. 841(a)(1), and the Act makes no
allowance for ultimate users (including research subjects) to
distribute their controlled substances to others.
\29\ Chemic was not registered with DEA under 21 U.S.C. 823(f)
to conduct research with marijuana and when DEA later learned that
Chemic was seeking to conduct a second marijuana study (when Chemic
subsequently sought to obtain marijuana directly from NIDA and
sought DEA's authorization for doing so), the agency so advised
Chemic that this activity required a research registration. See RX
49, at 2. DEA registrants are only authorized to conduct activities
with controlled substances ``to the extent authorized by their
registration and in conformity with other provisions of [the CSA].''
21 U.S.C. 822(b).
\30\ The first report, which was submitted by Chemic in 2003 to
MAPS and CaNORML, is titled ``Evaluation of Volcano(r) Vaporizer for
the Efficient Emission of THC, CBD, CBN and the Significant
Reduction and/or Elimination of Polynuclear-Aromatic (PNA) Analytes
Resultant of Pyrolisis,'' and is available on MAPS' Web site at
http://www.maps.org/mmj/vaporizerstudy4.15.03. The second report,
titled ``Cannabis Vaporizer Combines Efficient Delivery of THC with
Effective Suppression of Pyrolitic Compounds,'' also appears on
MAPS' Web site at http://www.maps.org/mmj/Gieringer-vaporizer.pdf. I
take official notice of both documents. See also http://
www.maps.org/news-letters/v13n1/13111gie.pdf (2003 MAPS news letter
discussing Vaporizer studies sponsored by MAPS and NORML and the
Marijuana Policy Project), of which I take official notice.
---------------------------------------------------------------------------
Thus, this ``third incident'' to which Respondent points involved
an effort by MAPS to expand upon the research that Chemic had conducted
on the Volcano--this time using marijuana directly obtained from NIDA
rather than using marijuana obtained without the knowledge or approval
of HHS or DEA. Id. Under MAPS sponsorship and oversight, Chemic so
applied to NIDA in 2004. Id.; RX 52B. The protocol submitted by Chemic
proposed to heat marijuana obtained from NIDA and from a Dutch
``medical marijuana'' program to three different temperature levels
below its combustion temperature and to then ``compare the quality and
relative percentage of available cannabinoids'' in the material
obtained from each source. RX 52B, at 2-3.
By letter dated July 27, 2005, a U.S. Public Health Service (PHS)
committee of scientists, which evaluated Chemic's protocol pursuant to
the 1999 Guidance, rejected it on the grounds that the ``project does
not add to the scientific knowledge base in a significant way.'' \31\
Id. at 4. With respect to the protocol's purpose of comparing the
cannibinoid content of NIDA and Dutch marijuana, the PHS committee
found that ``[m]arijuana varies in THC content and [that] simply
demonstrating that this device can measure those differences is of
little scientific value.'' Id. at 3. The PHS committee also found that
the protocol's other purposes (``to conduct a reliability study of the
device by analyzing multiple vapor collections'' and to ``determine the
`precision, accuracy, robustness and efficacy' of the vaporizing
device'') did ``not appear to be a hypothesis driven research
project,'' but rather, ``analogous to a process that is used to
`validate' an analytical method.'' Id. The PHS committee thus concluded
that the ``overall aims of the project appear to be descriptions of
work that would need to be conducted as part of good standard
laboratory procedure prior to a clinical study.'' Id.
---------------------------------------------------------------------------
\31\ HHS also noted that there were ``a number of technical
concerns'' with Chemic's proposal. RX 52B, at 4.
---------------------------------------------------------------------------
The PHS Committee further noted that, at that time (2005), a
separate, HHS-approved clinical trial involving marijuana and the
Volcano was already underway. Id. This then-ongoing clinical trial was
being conducted by Dr. Abrams and was sponsored by the CMCR, using
NIDA-supplied marijuana. Id.; Tr. 689. Moreover, as the letter from the
PHS Committee indicates, one of the documents that Dr. Abrams had
previously submitted in support of his then-ongoing clinical trial was
a report that Chemic itself had prepared regarding its prior study of
marijuana and the Volcano.\32\ GX 52B, at 3. Given that Dr. Abrams'
clinical trial was ``underway and is examining the pharmacodynamics and
pharmacokinetics of several different potencies of marijuana in human
volunteers using the Volcano(c) device,'' the Committee concluded that
``[i]t is difficult to see what additional scientific knowledge will be
provided by the current protocol, considering the prior work done by
the applicant, as described in the above report, and the ongoing
clinical trial at CMCR.'' Id.
---------------------------------------------------------------------------
\32\ The report, titled ``Evaluation of Volcano[reg] Vaporizer
for the efficient emission of THC, CBD, CBN and the significant
reduction and/or elimination of polynuclear-aromatic (PNA) analytes
resultant of pyrolysis,'' appears on MAPS Web site as discussed in
note 30.
---------------------------------------------------------------------------
Respondent also introduced into evidence a letter from the
President of Chemic to HHS responding to several points raised by the
PHS Committee in denying Chemic's application. See RX 55. Respondent's
letter does not, however, establish that HHS impermissibly denied
Chemic's application for marijuana.\33\ To the contrary, the evidence
supports the conclusion that HHS (acting through the PHS Committee)
made its determination not to supply marijuana on this occasion based
on scientific considerations, finding that Chemic's then-latest
proposed study was duplicative of prior and ongoing research and not
likely to provide useful data.
---------------------------------------------------------------------------
\33\ If Chemic had a valid basis to challenge HHS's denial of
its request for marijuana, it presumably had remedies available to
challenge that agency action either within HHS or in the courts.
See, e.g., 5 U.S.C. 702 (``A person suffering legal wrong because of
agency action * * * is entitled to judicial review thereof.'').
Respondent produced no evidence showing that Chemic has pursued any
such remedies.
---------------------------------------------------------------------------
Respondent's Contention That NIDA's Marijuana Is of Poor Quality
Respondent also contends that ``[t]he quality of the NIDA marijuana
raises concerns for researchers and patients.'' Resp. Prop. Findings at
16. In this regard, Respondent asserts that various researchers have
complained that NIDA's marijuana is of inconsistent potency, that
NIDA's marijuana is harsh, that NIDA's marijuana is frequently several
years old and not fresh, that the available product is of low potency,
and that NIDA's product includes stems and seeds. See id. at 16-27.
Contrary to Respondent's view, the evidence does not ``demonstrate[]
serious concerns about the quality of NIDA's'' marijuana products. Id.
at 27. As explained below, Respondent's contentions are largely based
on snippets from questionnaires in which the researchers generally
indicated their overall satisfaction with the quality of NIDA's
marijuana. As the ALJ found, ``a preponderance of the record
establishes that the quality is generally adequate.'' ALJ at 84.
With respect to the contention that NIDA's marijuana is of
inconsistent potency or inadequate potency, Respondent relies on
comments contained on three questionnaires that were completed by
researchers at DEA's request. Resp. Prop. Findings at 17-18. One of the
questions asked: ``Have you ever had any difficulty obtaining marijuana
from NIDA for all strengths of cigarettes to meet research
requirements?'' GX 16, at 8. While Dr. Grant of the CMCR answered
affirmatively and added that ``having consistency of 6% -8% [THC]
content have been difficult,'' he further stated that NIDA ``ha[s] been
accommodating by trying to produce the high % products in a timely
manner.'' Id. at 9 (emphasis in original). In response to another
question regarding the adequacy of NIDA's products, Dr. Grant noted
that ``NIDA has been reliable[,]'' and ``they have been easy to work
with and amenable to accommodating for the requirements of the study.''
Id. at 6.
It is true that Dr. Grant, in answering this question, noted the
problems with the range of potency in the higher potency material. Dr.
Grant explained, however, that the problems he found regarding the
range of potency were attributable to the cigarettes being ``handrolled
and thus difficult to prepare.'' Id. Moreover, Dr. Grant answered
``yes'' to the question of whether NIDA's current products were
``adequate for your research purposes
[[Page 2110]]
with regard to potency?'' Id. at 15. Also, in response to the question
of whether ``these problems [have] ever compromised the study?,'' Dr.
Grant indicated: ``N/A.'' Id. at 6.
Dr. Grant further indicated that he had ``no'' information that
``would lead [him] to believe that the future supply of marihuana
required for research would be insufficient or unavailable through
NIDA,'' id. at 8, and that he had ``no'' concerns regarding ``the
availability of research-grade marijuana from NIDA'' to meet CMCR's
future needs. Id. at 9. While Dr. Grant also indicated that it would be
clinically important to evaluate a higher potency product than the 7-8
percent THC content marijuana CMCR was currently using, he also
indicated that CMCR had not sought a higher potency product but had
only discussed with NIDA the feasibility of such a product. Id. at 16.
On his questionnaire, Ronald Ellis, M.D., of the University of
California, San Diego, noted that in ``[a]t least two shipments,
[there] was some variability on stated THC content and the actual
[content] measured.'' GX 17, at 6. Dr. Ellis further noted, however,
that NIDA personnel ``have been very responsive.'' Id. Apparently, Dr.
Ellis's clinical trial received some marijuana which was supposed to
have a THC content of 8 percent, but only had a content of
approximately 7 percent. Id. at 9. Dr. Ellis indicated, however, that
the potency of NIDA's current product was adequate for research
purposes. Id.
Respondent also relies on Dr. Donald Abrams' ``no'' answer
regarding the consistency of the potency of NIDA's product. Resp. Prop.
Findings at 18 (citing GX 21, at 6). Dr. Abrams further noted that
``[o]riginally approved for 3.9% THC content, midway through the
`Short-term effects * * *' protocol, NIDA informed [us] that the
potency had been downgraded to 3.5%. Everything since is said to be at
3.5%.'' GX 21, at 6. Notably, the ``Short-term effects'' study occurred
more than a decade ago, and Dr. Abrams did not indicate that there had
been further problems with the consistency of the potency of the
marijuana supplied by NIDA for several later studies he conducted.
Nor does the evidence support Respondent's contention that the
marijuana available through NIDA is of insufficient potency to satisfy
the needs of legitimate researchers. In his brief, Respondent relies on
the statements of Drs. Grant and Abrams that it would be beneficial to
evaluate the efficacy of marijuana cigarettes with a higher THC content
than what was currently being supplied by NIDA. Resp. Prop. Findings at
22-23 (citing GX 16 & 21). Respondent, however, produced no evidence
establishing that any researcher has obtained approval of FDA and other
reviewing authorities to conduct clinical trials using higher THC
content marijuana. As Dr. Abrams explained, he ``wanted to use a higher
potency product but there were questions from the [scientific review
board] and the funding agency [CMCR].'' GX 21, at 9.
Moreover, as Dr. ElSohly testified, the National Center has in
inventory substantial quantities of bulk marijuana material with THC
contents of ten to eleven percent and has some material with a THC
content of fourteen percent.\34\ Tr. 1203. Dr. ElSohly also testified
that the National Center could produce marijuana with a THC content of
up to 20 percent. Id. He further testified that he had informed ``some
of the investigators that if they want to, they can order material of a
certain potency'' and ``roll their own cigarettes.'' Id. at 1204-05.
---------------------------------------------------------------------------
\34\ Respondent also cites the questionnaire of Prof. Aron
Lichtman, of the Department of Pharmacology, Virginia Commonwealth
University, who conducted research in animals. Resp. Proposed
Findings at 23 (citing GX 28). On his questionnaire, Prof. Lichtman
indicated that he ``would [have] prefer[red] something at a higher
potency, but at the time, 3-4% was the highest potency available.''
GX 28, at 9. Prof. Lichtman's questionnaire indicated, however, that
his study had last obtained marijuana in 1999. Prof. Lichtman's
answer is thus not probative of whether NIDA is currently capable of
providing marijuana of adequate potency to support legitimate
research needs.
Respondent's evidence regarding the potency of marijuana
distributed by NIDA for patients in the former Compassionate
Investigational New Drug program likewise dates back to 1999. See
Resp. Prop. Findings at 24 (citing RX 19, at 47-48). As such, the
evidence is not probative of whether NIDA is currently capable of
supplying marijuana of adequate potency.
---------------------------------------------------------------------------
Respondent also maintains that NIDA's marijuana is harsh and that
some patients have complained that it was ``inferior in sensory
qualities (taste, harshness) [to] the marijuana they smoke outside the
laboratory,'' and that ``it was the worst marijuana they had ever
sampled.'' Resp. Prop. Findings at 19-21. Yet, as the questionnaires
completed by the researchers indicate, only a small percentage of study
subjects have complained about the harshness of NIDA's marijuana. See
GX 18, at 7 (one of ten patients complained); GX 21, at 8 (four out of
fifty dropped out because of quality); GX 22, at 7 (``Out of 100 plus
subjects, no more than [three] may have commented that the product was
harsh.'').\35\ Moreover, as one of the researchers noted, it was
unclear whether the harshness was related to the actual marijuana
cigarettes or the placebo material.\36\ As for Respondent's further
contention that some patients complained that NIDA's marijuana ``was
the worst they had ever sampled,'' this evidence does not establish
that the taste of the products rendered them unsuitable for their
intended use.\37\ Furthermore, Respondent provides no scientific basis
for his suggestion that the research subjects' description of the
degree of their subjective satisfaction with the experience of smoking
marijuana in a research setting should be a criterion for judging the
adequacy of the quality of marijuana for research purposes.\38\
---------------------------------------------------------------------------
\35\ Dr. ElSohly testified: ``I think you had like 50 subjects,
and only three or four complained of the harshness. That's a very
small percentage. You are going to get that regardless of what you
administer.'' Tr. at 1589.
\36\ As Dr. Cory-Bloom noted, it was unclear whether the
harshness was attributable to actual marijuana cigarettes or placebo
cigarettes. GX 18, at 7. Relatedly, Dr. ElSohly testified that the
complaints of harshness were likely attributable to the placebo
because ``all of the components have been extracted out . . . [s]o
this will be just like smoking * * * grass or * * * hay or something
like that or just paper that might have this harshness, and there's
no soothing effect of the other components in the plant material.''
Tr. 1289-90.
\37\ Respondent also cites to hearsay evidence regarding the
experience of a single patient who had previously used non-NIDA
marijuana (illegally obtained from California ``buyers'' clubs'')
without problems but then purportedly developed bronchitis upon
smoking NIDA marijuana. Resp. Prop. Findings at 21; Tr. 570. Even if
I were to credit this testimony, the record as a whole establishes
that NIDA's marijuana was well tolerated in the great majority of
the various studies' subjects.
\38\ Marijuana is known to cause, among other things, ``a
distortion in the sense of time associated with deficits in short-
term memory and learning,'' ``difficulty carrying on an intelligible
conversation,'' anxiety, paranoia, panic, depression, dysphoria,
delusions, illusions, and hallucinations. RX 1 (IOM report), at 101-
102. These effects impact the determination of what, if any, weight
to attach to research subjects' descriptions of their satisfaction
with the marijuana they have smoked.
---------------------------------------------------------------------------
Finally, Respondent contends that NIDA's marijuana is frequently
``not fresh'' and that it includes stems and seeds. Resp. Prop.
Findings at 21-22; 25-27. While the record contains some evidence that
older marijuana loses some if its potency, all but one of the
researchers indicated that neither the lack of freshness nor the
existence of plant parts (stems and seeds) had adversely impacted their
research. See GX 16, at 13 (CMCR); GX 17, at 7 (Dr. Ellis); GX 18, at 7
(Dr. Corey-Bloom); GX 19, at 7 (Dr. Israelski); \39\ GX 20, at 7 (Dr.
Wallace); GX 22, at 7 (Dr. Polich); GX 28, at 7 (Prof. Lichtman); but
see GX 21, at 7-8 (Dr. Abrams) (indicating that four
[[Page 2111]]
out of fifty patients had ``dropped out due to quality'').
---------------------------------------------------------------------------
\39\ Dr. Israelski did not recall any complaints about the
``freshness'' of NIDA's marijuana.
---------------------------------------------------------------------------
Moreover, with respect to the existence of stems and seeds in
NIDA's marijuana, Dr. ElSohly acknowledged that prior to 2001, there
may have some stems and seeds in the marijuana it sent to the Research
Triangle Institute (the contractor for the manufacture of the
cigarettes). Tr. 1300-01. Dr. ElSohly further testified, however, that
in 2001, the National Center acquired a special de-seeding machine
which removes all the seeds and stems from the marijuana that is used
to manufacture cigarettes. Id. at 1301. Respondent produced no evidence
showing that the marijuana which the National Center has since supplied
has contained stems and seeds.\40\
---------------------------------------------------------------------------
\40\ In support of its contention that NIDA marijuana contains
stems and seeds which renders the product's quality inadequate,
Respondent also cites an article, ``Chronic Cannabis Use in the
Compassionate Investigational New Drug Program.'' Resp. Prop.
Findings at 26 (citing RX 19, at 49-50). Respondent particularly
notes two photographs of marijuana that was manufactured in April
1999. See id. This evidence thus predates the National Center's 2001
acquisition of a de-seeding machine.
---------------------------------------------------------------------------
Respondent's Contention That NIDA's Marijuana Is Inadequate To Support
The Development of Plant-Form Marijuana Into an FDA-Approved
Prescription Drug
Respondent further contends that the existing supply of NIDA
marijuana is inadequate because ``MAPS seeks to develop botanical
marijuana as an FDA-approved prescription drug.'' Resp. Prop. Findings
at 8. In support of this contention, Respondent makes two primary
factual assertions. First, he claims that ``to develop a pharmaceutical
product, a developer must have assured access to a reliable, dependable
source of the particular formulation of the product the developer
needs, both for research, and for distribution if the product is
approved,'' and that ``[w]ithout such a source, there is no
development.'' Id. at 9. Second, he claims that ``even before the Phase
[1] and Phase [2] studies on a product, the developer must generally
submit a Drug Master File,''\41\ and that the Drug Master File (DMF)
for NIDA's marijuana contains proprietary information which NIDA
controls. Id.
---------------------------------------------------------------------------
\41\ I also take official notice of the FDA's Guideline For Drug
Master Files (Sept. 1989) (available at http://www.fda.gov/cder/
guidance/dmf.htm/).
According to this FDA guideline (at 2), ``[a] Drug Master File
(DMF) is a submission to the [FDA] that may be used to provide
confidential detailed information about facilities, processes, or
articles used in the manufacturing, processing, packaging, and
storing of one or more human drugs.''
---------------------------------------------------------------------------
As for Respondent's contentions regarding the need to submit a DMF,
Respondent asserts that ``there is no procedure to force [the DMF's]
owner to make a Drug Master File, or the information in it, available
to a drug developer.'' Resp. Prop. Findings at 10 (citing Tr. 447-49;
testimony of Dale Gieringer). While Respondent concedes that NIDA ``has
allowed the researchers whom it chooses to supply with marijuana to
rely on that file,'' and that FDA has approved several Phase 1 studies
using NIDA marijuana and the information contained in the DMF, id. at
10, it contends that because NIDA's mission is to study drug abuse, it
is not likely that ``NIDA would authorize MAPS to rely on the NIDA
marijuana [DMF] currently on file with the FDA.'' Id. at 45.
The 1999 HHS Guidance makes clear, however, that if a proposed
research project meets the Department's criteria for the provision of
research-grade marijuana, ``NIDA will provide the researcher with
authorization to reference NIDA's marijuana Drug Master File.'' GX 24,
at 4. Moreover, as the FDA has explained, ``the submission of a DMF is
not required by law or regulation,'' but rather, ``is submitted solely
at the discretion of the holder.'' Guideline For Master Drug Files, at
2. The FDA regulations provide: ``FDA ordinarily neither independently
reviews drug master files nor approves or disapproves submissions to a
drug master file. Instead, the agency customarily reviews the
information only in the context of an application under part 312 or
part [314].'' 21 CFR 314.420(a). Accordingly, as the FDA Guidelines
explain, while ``the information contained in [a] DMF may be used to
support an Investigational New Drug Application (IND), [or] a New Drug
application (NDA) * * * [a] DMF is NOT a substitute for an IND [or]
NDA.'' Guideline For Master Drug Files, at 3.
Relatedly, David Auslander, M.D., the Government's expert witness
in pharmaceutical development, testified that ``not all companies do
Drug Master Files'' and that ``FDA does not necessarily require a Drug
Master File to do a Phase [1] and Phase [2] study in all cases if the
Drug Master File * * * comes from a producer that's different from the
sponsor itself.'' Tr. 2024. Dr. Auslander also explained that a drug
developer may not even have a Drug Master File at the time it applies
to conduct Phase 1 or Phase 2 studies. Id. As Dr. Auslander further
testified, the necessary information can be submitted in an IND or an
NDA. Id. at 2024-25.
As for the contention that NIDA is not a reliable source of supply,
it is undisputed that a for-profit drug developer would be unlikely to
take a drug through the FDA approval process unless it was ``assured
that they would have a drug supply that is unchanging and reliable.''
Tr. 117 (testimony of Irwin Martin, Ph.D.). Dr. Martin also testified
that ``[o]ne of the biggest problems in drug development is the
unfortunate need sometimes to repeat studies. If you have a new
formulation or your drug source has changed, you many need to repeat
years worth of data because you can no longer assure that the data you
developed with this earlier version of [the] drug will actually be the
same drug as you now have.'' Id. at 118. Dr. Martin further testified
that while ``no reasonably business-oriented company would ever develop
a product'' if it did not have a reliable and consistent supply source,
he also noted that if a company had to change its supply source, a
company could try to show that the new product was pharmcokinetically
equivalent to the old product. Tr. 120-21; see also Tr. 2027.
Also on this issue, Dr. Auslander testified further on behalf of
the Government that if the developer's source changed, it ``would not
necessarily repeat the Phase [1] and [2] clinical studies over again,
but * * * would do additional chemical studies, stability [studies] * *
* to show that the quality of material from source A and the quality of
material acquired from source B are equivalent.'' Tr. 2027-28. Both
Respondent's and the Government's experts agreed, however, that if the
developer could not establish equivalence between the two products,
``it would not be a trivial experience'' for the developer. Id. at
2029; see also id. at 121 (testimony of Dr. Martin that developer would
have to start over).
Relatedly, Respondent further asserts that there is
``overwhelming'' evidence that NIDA ``would not be likely to choose to
serve as the supplier to a medical marijuana pharmaceutical product
developer even if it were authorized to so.'' Resp. Prop. Findings at
10. In support of this assertion, Respondent extracts two sentences
from a letter in which Nora Volkow, M.D., NIDA's director, responded to
Mr. Doblin's letter accusing NIDA/HHS of ``seriously obstructing''
Chemic's research involving the Volcano which MAPS was sponsoring (and
whose application HHS ultimately denied).\42\ See id. (quoting RX 13;
``It is
[[Page 2112]]
not NIDA's role to set policy in this area or to contribute to the DEA
licensing procedures. Moreover, it is also not NIDA's mission to study
the medicinal use of marijuana or to advocate for the establishment of
facilities to support this research.''). See also RX 14 (letter of Mr.
Doblin; ``NIDA/HHS is seriously obstructing a privately-funded drug
development program aimed at evaluating marijuana's potential use as an
FDA-approved medication.'').
---------------------------------------------------------------------------
\42\ In that letter, Mr. Doblin also mentioned that DEA had
indicated that it would not review Chemic's application to import
ten grams of Dutch marijuana until NIDA/HHS completed its review of
Chemic's protocol. RX 14. Mr. Doblin also referenced DEA's handling
of Respondent's application.
---------------------------------------------------------------------------
In that letter, Dr. Volkow declined to intervene explaining that:
* * * NIDA is just one of the participants on the HHS review
panel and continues, on behalf of the U.S. Government, to provide
supplies of well-characterized cannabis for both NIH and non-NIH-
funded research. The latter is conducted according to the procedure
established in 1999 by HHS for obtaining access to marijuana for
research purposes. It is not NIDA's role to set policy in this area
or to contribute to the DEA licensing procedures. Moreover, it is
not NIDA's mission to study the medicinal uses of marijuana or to
advocate for the establishment of facilities to support this
research. Therefore, I am sorry but I do not believe that we can be
of help to you in resolving these concerns.
RX 13. As both this letter and the 1999 Guidance make plain, HHS--and
not NIDA--is the policymaker regarding the criteria for determining who
can obtain research-grade marijuana from NIDA. As NIDA does not
independently control to whom it may supply marijuana for legitimate
research, the letter is not indicative of whether NIDA would be a
reliable source of marijuana for an entity which sought to develop
plant-form marijuana into an FDA-approved prescription medicine.
Respondent also points to the 1999 Guidance document's statement
that ``[t]he goal of this program must be to determine whether
cannabinoid components of marijuana administered through an alternative
delivery system can meet the standards enumerated under the Federal
Food, Drug, and Cosmetic Act for commercial marketing of a medical
product. As the IOM report stated, 'Therefore, the purpose of clinical
trials of smoked marijuana would not be to develop marijuana as a
licensed drug, but such trials could be a first step towards the
development of rapid-onset, nonsmoked cannabinoid delivery systems.' ''
\43\ GX 24, at 2.
---------------------------------------------------------------------------
\43\ In discussing the content of the HHS Guidance, Respondent
asserts: ``And it expressly states that `the purpose of clinical
trials of smoked marijuana would not be to develop marijuana as a
licensed drug.' '' Resp. Proposed Findings at 11 (quoting GX 24, at
2). Notably, Respondent's quotation edits out the Guideline's
reference to the IOM Report. The complete text of the Guidance
shows, however, HHS did not come to this conclusion without
evidentiary support, but rather, relied on the extensive findings of
the IOM.
---------------------------------------------------------------------------
As found above, the IOM's recommendation was based on its
conclusion that ``[a]lthough marijuana smoke delivers THC and other
cannabinoids to the body, it also delivers harmful substances,
including most of those found in tobacco smoke. In addition, plants
contain a variable mixture of biologically active compounds and cannot
be expected to provide a precisely defined drug effect. For those
reasons there is little future in smoked marijuana as a medically
approved medication.'' RX 1, at 195-96.
Moreover, the HHS Guidance does not address what the Secretary's
response would be were the current clinical trials to show that the
efficacy/safety profile of smoked marijuana supported FDA approval of
it as a prescription medicine for particular indications or patient
populations. Nor does it address what the Secretary's response would be
if clinical trials were to show that the efficacy/safety of vaporized
plant form marijuana for particular indications supported its approval
as a prescription drug.
Dr. Gust testified that notwithstanding the stated goal of the 1999
Guidance, a researcher who ``had an IND from FDA * * * would not have a
problem getting marijuana.'' Tr. 1718. Further, in response to the
ALJ's question as to whether a researcher whose goal was to obtain FDA
approval of plant-form marijuana would have more difficulty obtaining
marijuana from HHS than a researcher who sought to produce an extract-
based product, Dr. Gust testified: ``I don't believe so.'' Id. at 1719-
20.
Dr. Gust also explained that whether plant-form marijuana should be
approved as a prescription medicine is ``not a question for the'' PHS
committee that reviews requests for NIDA marijuana. Id. at 1720.
Rather, ``it's a question for the regulation and approval process that
goes on through FDA.'' Id. Finally, while Dr. Gust acknowledged that
``HHS would strongly endorse'' the IOM's view that ``if there's going
to be an approved medication, it's going to be a purified constituent
of marijuana that will be delivered in a non-smokable form,'' he
further testified that in his experience, there was no bias against
``the concept of approving marijuana as a medication'' at the level of
PHS review. Id. at 1722.\44\
---------------------------------------------------------------------------
\44\ In discussing this testimony, the ALJ noted that Dr. Gust
had acknowledged that a researcher with an FDA-approved protocol
might nonetheless be denied marijuana by the PHS committee under the
criteria set forth in the guidance. ALJ at 51 (citing Tr. 1694).
There is, of course, no evidence that any researcher with an FDA-
approved protocol has been denied marijuana subsequent to the 1999
guidelines. Dr. Gust's answer was based on a hypothetical question.
Accordingly, this portion of Dr. Gust's testimony provides no basis
to question his credibility as to whether in his experience, HHS
(and the PHS review committees) are biased against researchers who
seek to obtain FDA approval for plant-form marijuana.
---------------------------------------------------------------------------
Respondent further asserts that ``it is not at all clear that NIDA
could serve as a source for a pharmaceutical product.'' Resp. Prop.
Findings at 11 (emphasis in original). Notwithstanding Mr. Doblin's
beliefs regarding the likely safety/efficacy profiles of smoked and
vaporized marijuana, see Tr. at 605, it is highly speculative whether
clinical trials will ultimately support FDA approval of plant-form
marijuana through either delivery system.\45\
---------------------------------------------------------------------------
\45\ Given that, as indicated above, marijuana has been found to
contain hundreds of different chemicals, including a variable
mixture of biologically active compounds that cannot be expected to
provide a precisely defined drug effect, IOM has expressed the view
that, ``if there is any future in cannabinoid drugs, it lies with
agents of more certain, not less certain, composition.'' RX 1, at
195-96.
---------------------------------------------------------------------------
As further support for this contention, Respondent references that
Dr. ElSohly answered ``That's correct'' when asked the following
question by Respondent's counsel: ``So if somebody wants to develop a
commercial product with marijuana, they could not use the NIDA
marijuana; is that fair?'' Resp. Prop. Findings at 11 (quoting Tr.
1463). It is not clear exactly what to make of Dr. ElSohly's answer to
this question.\46\ In
[[Page 2113]]
any event, no provision of the National Center's contract with NIDA
imposes any prohibition on the use of the marijuana produced under the
contract for the purposes of the development of a commercial product.
Indeed, the language of the contract with NIDA suggests otherwise.
While Article H.13 states that ``contract funds shall not be used to
support activities that promote the legalization of any drug or other
substance included in schedule I'' of the CSA, it further provides that
``[t]his limitation shall not apply when the contractor makes known to
the contracting officer that there is significant medical evidence of a
therapeutic advantage to the use of such drug or other substance or
that federally sponsored clinical trials are being conducted to
determine therapeutic advantage.'' GX 13, at 20 (citing Pub. L. 108-
447, Sec. 510, 108 Stat. 2809 (2005)). Likewise, the new procedures
that HHS announced in 1999 for providing marijuana for medical research
contain no restriction on using NIDA-supplied marijuana for the
development of commercial products. GX 24. To the contrary, by adopting
a new procedure whereby privately funded researchers could obtain
marijuana from NIDA at cost, HHS made it possible starting in 1999 for
a commercially sponsored researcher to develop a drug product using
NIDA-supplied marijuana. See id. at 2. Finally, Respondent cites no
provision of law that prohibits NIDA from serving as a supply source
for a prescription drug approval process.\47\
---------------------------------------------------------------------------
\46\ Based on the questions that led up to the above-quoted
question, it appears that, in answering ``That's correct,'' Dr.
ElSohly was confirming that the marijuana he grows pursuant to the
NIDA contract may not be taken by the University of Mississippi
(without prior authorization from NIDA) for use in the commercial
development of a THC extract product where such commercial activity
was not authorized by NIDA. See Tr. at 1462-63. Indeed, the
following subsequent exchange between Respondent's counsel and Dr.
ElSohly suggests that Dr. ElSohly correctly understood that there
was no prohibition on the use of NIDA marijuana for the development
of commercial products:
Q: Dr. ElSohly, if an organization like MAPS, for example, a
nonprofit or pharmaceutical organization, wanted to try to develop
smoked marijuana into an FDA-approved medicine, could it use the
marijuana that you grow to the preclinical and clinical testing if
NIDA agreed?
A: I would say yes.
Tr. 1562-63. Moreover, even if Dr. ElSohly was of the mistaken
view that the marijuana he grew for NIDA could never be used by
anyone for commercial product development, such a misunderstanding
on Dr. ElSohly's part would not be controlling for purposes of this
proceeding. The record is clear that it is HHS--not Dr. ElSohly--
that determines the terms of his contract, including to whom and
under what circumstances he may supply marijuana; and the record is
also clear that Dr. ElSohly follows the instructions he receives
from NIDA as to whom to deliver the marijuana. Further, as explained
above, the record reveals that HHS's policy contains no prohibition
on the use of the marijuana grown pursuant to the NIDA contract for
commercial development purposes.
\47\ As for Respondent's contention that the Government did not
``introduce any evidence that NIDA could or would [serve as a supply
source] to support its claim that NIDA's supply is adequate to meet
all legitimate medical and scientific purposes,'' Resp. Prop.
Findings at 11, Respondent, and not the Government, has the burden
of proof on the issue of whether supply is inadequate within the
meaning of 21 U.S.C. 823(a)(1). See 21 CFR 1301.44(a).
---------------------------------------------------------------------------
Evidence Regarding the Remaining Statutory Factors
There is no evidence that Respondent has not complied with
applicable state or local laws. See Gov. Proposed Findings at 139
(discussing 21 U.S.C. 823(a)(2)). Moreover, Respondent has never been
convicted of any controlled-substance related offense. Tr. 78; see 21
U.S.C. 823(a)(4).
As for factor five, on the questionnaire, Respondent acknowledged
that he ``has no current or previous registrations and is unaware of
any registration [having] previously [been] granted to the
university.'' GX 3, at 3. While Respondent testified that he would meet
all ``appropriate security conditions,'' he also acknowledged that
``I've never grown marijuana or any other controlled substance.'' Tr.
79. He further testified that ``We have not--I have no experience in
the control against diversion.'' Id. Relatedly, Respondent testified
that he had no personal experience in providing security for plants,
id. at 255, and that both graduate students and technicians would be
used to perform the various tasks associated with the project. Id. at
254 (``I usually don't go down and water the plants in the greenhouse;
I usually have a technician that does that.''); id. at 254-55 (``They
[the graduate students and technicians] would probably do the
transplanting[,]'' and ``a daily check on any environmental controls we
have.''). Respondent presented no evidence that any person who would be
involved in the daily operation of the project would have experience in
the lawful manufacture or distribution of schedule I and II controlled
substances.\48\
---------------------------------------------------------------------------
\48\ Respondent testified that he had performed classified work
on plants for the U.S. Army and that ``there were security systems
in place similar to the security systems you have in this building''
(referring to DEA Headquarters, where the hearing took place), and
he answered ``Yes'' when asked by his counsel whether he recognized
``the importance of that sort of security in a situation like this
registration application.'' Tr. 367. It is unclear what Respondent
meant by ``the security systems you have in this building,'' since
the only security to which he would have been exposed in entering
DEA Headquarters to testify were the requirements of passing through
a metal detector, being accompanied by a DEA employee, and wearing a
visitor's badge. These DEA Headquarters security measures have
nothing to do with the security measures required of DEA registrants
who handle controlled substances, which are set forth in 21 CFR
1301.71 through 1301.76. Thus, this portion of Respondent's
testimony was ambiguous and did not establish, for purposes of 21
U.S.C. 823(a)(5) that, if his application were granted, there would
exist in his establishment effective controls against diversion.
---------------------------------------------------------------------------
Finally, Respondent testified that he believed that granting his
application would promote technical advances in the art of
manufacturing controlled substances and the development of new
substances. Id. at 74-76. More specifically, Respondent asserted that
granting his application would advance ``the understanding [of] any
possible clinical use of marijuana if we were able to supply this to
investigators to run trials.'' Id. at 75-76. Respondent also testified
that ``we would learn more about how the environment affects the
constituents in the plant material which would enable'' a potential
manufacturer, were marijuana to become approved by the FDA as a drug,
to ``know the environment it needs to be grown under to produce a
clinical marijuana.'' Id. at 76. Respondent further opined that
granting his registration would promote technical advances because part
of the purpose of growing the marijuana was to allow MAPS to test its
vaporizer. Id. at 77-78. Respondent acknowledged, however, that he
would not personally be working on MAPS's vaporizer device or on any
other delivery device. Id. at 230. He also acknowledged that he has no
patents regarding the growing of any medicinal plants. Id. at 238.
Discussion
Pursuant to 21 U.S.C. 823(a), ``[t]he Attorney General shall
register an applicant to manufacture controlled substances in schedule
I or II if he determines that such registration is consistent with the
public interest and with the United States obligations under
international treaties, conventions, or protocols in effect on May 1,
1971.'' 21 U.S.C. 823(a). ``In determining the public interest,'' Sec.
823(a) directs the Attorney General to consider the following factors:
(1) Maintenance of effective controls against diversion of
particular controlled substances and any controlled substances in
schedule I or II compounded therefrom into other than legitimate
medical, scientific, research, or industrial channels, by limiting
the importation and bulk manufacture of such controlled substances
to a number of establishments which can produce an adequate and
uninterrupted supply of these substances under adequately
competitive conditions for legitimate medical, scientific, research,
and industrial purposes;
(2) Compliance with applicable State and local law;
(3) Promotion of technical advances in the art of manufacturing
these substances and the development of new substances;
(4) Prior conviction record of applicant under Federal and State
laws relating to the manufacture, distribution, or dispensing of
such substances;
(5) Past experience in the manufacture of controlled substances,
and the existence in the establishment of effective controls against
diversion; and
(6) Such other factors as may be relevant to and consistent with
public health and safety.
Id. This Agency's regulations further provide that ``[a]t any
hearing on an application to manufacture any controlled substance
listed in Schedule I or II, the applicant shall have the burden of
proving that the requirements for such registration pursuant to [Sec.
823(a)] are satisfied.'' 21 CFR 1301.44(a).
As Sec. 823(a) makes plain, even if an applicant satisfies its
burden of proof with respect to the public interest inquiry, it cannot
be granted a registration unless its proposed activities are consistent
with the United States' obligations under international treaties. The
United States is a party to
[[Page 2114]]
the Single Convention. Accordingly, whether Respondent's proposed
activities are consistent with this Nation's obligations under the
Convention is a threshold question.
A. Whether Respondent's Proposed Registration Is Consistent With the
Single Convention
The Single Convention imposes a comprehensive series of measures to
control narcotic drugs and other substances including marijuana (which
is referred to in the Single Convention as ``cannabis'').\49\ Under the
Convention, cannabis is both a Schedule I and Schedule IV \50\ drug and
is subject to the control measures applicable to each schedule. Single
Convention, art. 2, para. 5; see also Secretary-General of the United
Nations, Commentary on the Single Convention on Narcotic Drugs, 1961,
65 (1973) (hereinafter, Commentary). Moreover, under article 28, ``[i]f
a Party permits the cultivation of the cannabis plant for the
production of cannabis or cannabis resin, it shall apply thereto the
system of controls as provided in article 23 respecting the opium
poppy.'' Single Convention, art. 28, Para. 1. As the Commentary further
explains:
---------------------------------------------------------------------------
\49\ Under the Single Convention, `` `cannabis plant' means any
plant of the genus Cannabis.'' Article 1(c). The Single Convention
defines ``cannabis'' to include ``the flowering or fruiting tops of
the cannabis plant (excluding the seeds and leaves when not
accompanied by the tops) from which the resin has not been
extracted, by whatever name they may be designated.'' Article 1(b).
This definition of ``cannabis'' under the Single Convention is less
inclusive than the CSA definition of ``marihuana.'' See 21 U.S.C.
802(16). However, this distinction in inconsequential for purposes
of the matters at issue in this proceeding.
\50\ The Single Convention's use of the term ``Schedule IV'' is
not to be confused with the CSA's use of the same term. Under the
Convention, the terms ``Schedule I, Schedule II, Schedule III and
Schedule IV mean the correspondingly numbered list of drugs or
preparations annexed to this Convention.'' Single Convention, art.
1, para. 1(u). As the Convention further explains, ``[t]he drugs in
Schedule IV shall also be included in Schedule I and subject to all
measures of control applicable to drugs in the latter Schedule'' as
well as the additional measures contained in article 2, paragraph 5.
Id. art. 2, para. 5.
Under Article 2, paragraph 5, the Convention requires that [a]
Party shall adopt any special measures of control which in its
opinion are necessary having regard to the particularly dangerous
properties of a drug so included. Id. art. 2, para. 5(a). The
Convention further directs that:
A Party shall, if in its opinion the prevailing conditions in
its country render it the most appropriate means of protecting the
public health and welfare, prohibit the production, manufacture,
export and import of, trade in, possession or use of any such drug
except for amounts which may be necessary for medical and scientific
research only, including clinical trials therewith to be conducted
under or subject to the direct supervision and control of the Party.
Id. art. 2, para. 5(b).
The system of control over all stages of the drug economy which
the Single Convention provides has two basic features: limitation of
narcotic supplies of each country * * * to the quantities that it
needs for medical and scientific purposes, and authorization of each
form of participation in the drug economy, that is, licensing of
producers, manufacturers and traders. * * * In the case of the
production of opium, coca leaves, cannabis and cannabis resin, this
regime is supplemented by the requirement of maintaining government
monopolies for the wholesale and international trade in these drugs
---------------------------------------------------------------------------
in countries which produce them. * * *
Commentary at 263.
Among these controls is the requirement that ``[t]he Agency shall *
* * have the exclusive right of importing, exporting, wholesale trading
and maintaining stocks other than those held by manufacturers of opium
alkaloids, medicinal opium or opium preparations.'' Single Convention
art. 23, para. 2(e). The Convention further provides, however, that the
``Parties need not extend this exclusive right to medicinal opium and
opium preparations.'' \51\ Id.
---------------------------------------------------------------------------
\51\ Article 23 of the Convention further provides that ``[a]
Party that permits the cultivation of the opium poppy for the
production of opium shall establish, if it has not already done so,
and maintain, one or more government agencies * * * to carry out the
functions required under this article.'' Single Convention art. 23,
para. 1. Moreover, ``[a]ll cultivators of the opium poppy shall be
required to deliver their total crops of opium to the Agency. The
Agency shall purchase and take physical possession of such crops as
soon as possible, but not later than four months after the end of
the harvest.'' Id. para. 2(d).
---------------------------------------------------------------------------
The Commentary to article 28 thus explains that ``[a] Party
permitting the cultivation of the cannabis plant for cannabis and
cannabis resin must, pursuant to article 23, paragraph [2(e)(2)] in
connexion with article 28, paragraph 1, grant its national cannabis
agency the exclusive right of wholesale * * * trade in these drugs.''
Commentary at 314 (emphasis added). The Commentary further explains
that the Government ``need not extend this exclusive right to extracts
and tinctures of cannabis.'' Id.
Respondent raises several arguments as to why his registration
would be consistent with the Single Convention. First, he argues that
``the Convention clearly contemplates that more than one cultivator or
bulk manufacturer may be licensed by the member nation's licensing
agency.'' Resp. Prop. Findings at 66. Second, he argues that because
his ``crop would be medical marijuana, grown and processed to be
adapted for medicinal use, it is not subject to the agency's `exclusive
right' for `maintaining stocks.' '' Id. at 67.
Relatedly, Respondent argues that because DEA has granted Dr.
ElSohly a registration to ``grow marijuana for private purposes'' and
does not require him to ``turn[] over those stocks to any government
agency,'' granting his application will likewise conform with the
Single Convention. Respondent further contends that Dr. ElSohly has
been able to grow marijuana outside of the NIDA contract and that ``DEA
would not have issued those licenses had they violated the Single
Convention.'' Id. at 68. Respondent also argues that the United
Kingdom, which is also Party to the Convention, has allowed marijuana
to be grown by a private entity (GW Pharmaceuticals) without its
government taking physical possession. Id. Likewise, in his Response to
the Government's exceptions to the ALJ's recommended decision,
Respondent argues that the ALJ ``correctly held that Article 23 [para.]
2(d) does not require the government to take physical possession of
[his] crop.'' Respondent's Resp. at 9.
In concluding that the ``Single Convention does not preclude
registering Respondent,'' the ALJ offered three reasons. First, based
on the United Kingdom's regulatory scheme, she reasoned that ``it
appears * * * that the parties to the Single Convention are free to
construe the term `physical possession' as they see fit.'' ALJ 82. As
for the remaining two reasons, the ALJ explained that ``[i]t also
appears, although it is not entirely clear, that the marijuana grown by
the National Center or by any other registrant for utilization in
research would qualify as either `medicinal' within the meaning of
article 1, paragraph (1)(o), or a `special stocks' within the meaning
of article 1, paragraph (1)(x), and that therefore the government
monopoly on importing, exporting, wholesale trading, and maintain
stocks would not apply.'' Id.
Neither the ALJ's rationales nor Respondent's arguments are
persuasive. As for the argument that the Single Convention does not
require that the Government take physical possession, the argument
provides no comfort to Respondent for two reasons. First, the argument
ignores that taking possession and engaging in wholesale distribution
are two separate activities under the Convention. Notably, in his
briefs, Respondent does not even acknowledge the distinction. See Resp.
Proposed Findings and Conclusion of Law at 64-70; Respondent's Resp. at
9-12.
Second, as Respondent's evidence makes clear, his purpose for
seeking a registration is not simply to grow marijuana, but to
distribute it outside of the HHS system. Mr. Doblin's testimony
[[Page 2115]]
that ``what we're trying to do is get the [PHS] and NIDA out of the
picture,'' Tr. 666, makes this plain. See also Tr. 225 (testimony of
Respondent; ``I may very well be approached by other people with
approved studies who need a source also.''). Thus, Respondent's
contention that the Single Convention does not prohibit multiple
cultivators is beside the point, since his proposed purpose for gaining
authorization to grow marijuana (so that MAPS--rather than HHS/NIDA--
can control distribution of the marijuana) would defy one of the
central control provisions of the Single Convention with respect to
cannabis cultivation. As the Commentary to the Single Convention
states:
Countries * * * which produce * * * cannabis * * * , [i]n so far
as they permit private farmers to cultivate the plants * * *, cannot
establish with sufficient exactitude the quantities harvested by
individual producers. If they allowed the sale of the crops to
private traders, they would not be in a position to ascertain with
reasonable exactitude the amounts which enter their controlled
trade. The effectiveness of their control r[eacute]gime would thus
be considerably weakened. In fact, experience has shown that
permitting licensed private traders to purchase the crops results in
diversion of large quantities of drugs into illicit channels. * * *
[T]he acquisition of the crops and the wholesale and international
trade in these agricultural products cannot be entrusted to private
traders, but must be undertaken by governmental authorities in the
producing countries. Article 23 * * * and article 28 * * * therefore
require a government monopoly of the wholesale and international
trade in the agricultural product in question in the country which
authorizes its production.
Commentary at 278. Indeed, the central theme of Respondent's argument--
starting with the opening sentence of his Proposed Findings and
Conclusion of Law and repeated throughout the document--is that the
very Government monopoly over the wholesale distribution of marijuana
that the Single Convention demands is the primary evil that Respondent
seeks to defeat through obtaining a DEA registration. Thus, from the
outset of the analysis, Respondent's proposed registration cannot be
reconciled with United States obligations under the treaty.
Respondent offers no argument that his proposed distributions would
not constitute wholesale trading under the Convention. See, e.g., GX 3,
at 3 (``customers would include both MAPS-sponsored research and
research sponsored by other organizations.''). Respondent's proposed
activity in distributing to researchers does not constitute retail
trading because his customers are not the ultimate users of the
marijuana, but rather researchers, who would then dispense the drugs to
ultimate users. See Commentary at 329 (A manufacturer's ``license does
not in any event * * * include the retail trade in drugs.'').\52\
---------------------------------------------------------------------------
\52\ Under the CSA and DEA regulations, wholesale distribution
and dispensing (retail distribution) are independent activities and
require separate registrations. See 21 U.S.C. 802(11) (definition of
``distribute'' excludes dispensing); compare 21 U.S.C. 823(b) with
823(f) (separate registration required for distributor versus
dispenser); see also 21 CFR 1301.13(e) (listing categories of
registration and authorized activities). Only a practitioner (and
not a manufacturer or distributor) can dispense a controlled
substance to a patient. See id. at 1301.13(e)(1).
Moreover, the Single Convention is a drug-control regime. The
precise economic arrangements between Respondent, MAPS, and any
other potential customers, are therefore irrelevant in determining
whether his proposed activity would constitute wholesale trading.
---------------------------------------------------------------------------
In construing the meaning of ``United States obligations under [the
Single Convention]'' in the context of 21 U.S.C. 823(a), any reliance
by the ALJ or Respondent on the United Kingdom's practice is
misplaced.\53\ For one, as set forth in Sec. 823(a), Congress assigned
to the Attorney General sole authority to determine whether a proposed
registration under this provision is consistent with United States
obligations under the Single Convention. Nowhere in the CSA does
Congress call upon the Attorney General to rely on--or even consider--
how other nations interpret the Single Convention as a basis for the
Attorney General's determination of what are the United States
obligations under the treaty.\54\ Second, the Single Convention
contains provisions that call upon each nation that is a party to the
treaty to determine, in its own opinion, whether and how to tailor its
control measures commensurate with the circumstances particularized to
that country. For example, article 2, paragraph 5, of the Single
Convention states the following with respect to drugs included in
Schedule IV (including cannabis):
---------------------------------------------------------------------------
\53\ There was a dispute between the parties as to the
admissibility of the document Respondent submitted (attached to RX
26) purporting to set forth the United Kingdom's explanation of how
it carried out its obligation under the Single Convention to
establish a national cannabis agency. Tr. 1812. After having the
parties brief the issue, the ALJ noted, in a ``Memorandum to Counsel
and Ruling,'' that one of the Government's objections was that
Respondent did ``not explain how exhibit 26 was issued or under what
authority.'' The ALJ concluded that ``although the circumstances
under which exhibit 26 came to be promulgated are not clear, it
appears that the document is in effect in the United Kingdom.'' Id.
The ALJ did not explain her basis for this conclusion. See id. It is
unnecessary to determine whether this ruling by the ALJ was proper
because, even assuming, arguendo, that the document accurately
represented the official position of the United Kingdom and was
issued by the appropriate representative of the British Government,
for the reasons explained above, reliance on this document for
determining how to interpret the Single Convention for purposes of
21 U.S.C. 823(a) is inappropriate.
\54\ For this reason, it is unnecessary to expressly reject the
interpretation contained in the document submitted by Respondent
(attached to RX 26) titled ``United Kingdom National Cannabis
Agency: Protocol.''
(a) A Party shall adopt any special measures of control which in
its opinion are necessary having regard to the particularly
dangerous properties of a drug so included; and
(b) A Party shall, if in its opinion the prevailing conditions
in its country render it the most appropriate means of protecting
the public health and welfare, prohibit the production, manufacture,
export and import of, trade in, possession or use of any such drug
except for amounts which may be necessary for medical and scientific
research only, including clinical trials therewith to be conducted
under or subject to the direct supervision and control of the Party.
Thus, what the United Kingdom might, in its opinion, deem to be
appropriate control measures to meet its obligations under the Single
Convention given the circumstances involving cannabis in Britain might
be distinct from what the United States finds, in its opinion, to be
the appropriate control measures to fit the circumstances involving
cannabis in the United States.\55\
---------------------------------------------------------------------------
\55\ In any event, there is no evidence that the British
Government has allowed GW to engage in the type of activity for
which Respondent seeks to become registered--the wholesale
distribution of plant-form marijuana. Rather, as DEA has done with
respect to the National Center and its project to supply THC extract
to Mallinckrodt (GX 78), the British Government has granted GW a
license to grow marijuana for the limited purpose of producing
extract for a pharmaceutical product. Rx 26, Ex. A at 2.
---------------------------------------------------------------------------
If the United States were to look to any outside entity for
guidance on compliance with the Single Convention, that entity would be
the International Narcotics Control Board (INCB), which is the United
Nations organ created by the Single Convention to implement, and
monitor compliance with, the Convention. See Single Convention,
articles 5, 9-15, 19-20. In its 2005 Annual Report, the INCB
reiterated: ``Articles 23 and 28 of the [Single] Convention provide for
a national cannabis agency to be established in countries where the
cannabis plant is cultivated licitly for the production of cannabis,
even if the cannabis produced is used for research purposes only.''
\56\ Similarly, the INCB issued a statement in 2008 stating, with
respect to the standards under the Single Convention
[[Page 2116]]
relating to the control of cannabis, that ``[s]uch standards require,
inter alia, the control of cultivation and production of cannabis by a
national cannabis agency.'' \57\ As explained above, it is this control
of the cultivation and production of cannabis by a national agency of
the United States to which Respondent is fundamentally opposed, thereby
demonstrating the inconsistency between his application and the Single
Convention.
---------------------------------------------------------------------------
\56\ The above-quoted statement appears on page 16, in paragraph
81, of the 2005 INCB Annual Report, which is available at http://
www.incb.org/pdf/e/ar/2005/incb_report_2005_2.pdf. I take
official notice of the report.
\57\ This statement was made in an INCB press release issued on
February 8, 2008, which is available at http://
www.unis.unisvienna.org/unis/pressrles/2008/usinar1023.html, and of
which I take official notice.
---------------------------------------------------------------------------
The ALJ further reasoned that ``although it is not entirely
clear,'' the marijuana Respondent seeks to grow would be exempt from
the Government's exclusive right to engage in wholesale trading because
it would qualify as either ``medicinal'' or ``special stocks.'' ALJ at
82. As explained below, the ALJ erred on both counts.
In his response to the Government's exceptions, Respondent contends
that the ``[t]he Single Convention defines `medicinal' marijuana as
that `which has undergone the process necessary to adapt it for
medicinal use.' '' Respondent Resp. at 10 (quoting art I. para 1 (o)).
The Single Convention, however, contains no such term.
Rather, the Convention defines only the term ``[m]edicinal opium.''
Single Convention art 1, para.1(o) (defining ``medicinal opium'' as
``opium which has undergone the processes necessary to adapt it for
medicinal use.''). Accordingly, Respondent's argument rests solely on
an analogy to the term ``medicinal opium.'' Respondent's reliance is
misplaced as it ignores several critical distinctions between what was
formerly known as ``medicinal opium'' and what it contends is
``medicinal marijuana.''
As the Commentary explains: ``The Single Convention follows earlier
narcotics treaties in defining `medicinal opium' as a special form of
opium in which that drug is used in medical treatment.'' Commentary at
21-22. The Commentary goes on to state that ``medicinal opium'' is a
form of opium powder to which lactose has been added ``to reduce its
morphine content to the standard of about 10 percent prescribed for
`medicinal opium.' '' Id. (emphasis added).
In a footnote, the Commentary further explains that ``[t]he fifth
edition of the Pharmacop[oelig]a Helvetica (1949) * * * defines
`medicinal opium' as opium powder reduced to a content of 9.2 to 10.2
per cent of anhydrous morphine by the addition of lactose. This
pharmacop[oelig]a calls `medicinal opium' also `powdered opium.' ''
Commentary at 22 n.8. The Commentary then notes that ``[t]he term
`medicinal opium' ha[d] been abandoned in'' in favor of the terms
``powdered opium'' and ``standardized powered opium'' in several
pharmacop[oelig]as which had been published in the late 1960s. Id.
(citing British Pharmacop[oelig]a 686 (1968), and Pharmacop[oelig]a
Internationalis 403 (2d ed. 1967)). Of further note, the term is not
used at all in more recent pharmacop[oelig]as.\58\ See, e.g., The
United States Pharmacopeia 2008, at 2860-61 (31st Rev. 2007); British
Pharmacopoeia 2008, at 1599-1601 (2007).
---------------------------------------------------------------------------
\58\ There is also no listing of any opium-containing product in
the latest edition (2008) of FDA's ``Orange Book,'' which lists each
drug product currently approved for marketing under the FDCA based
on a determination by the FDA that the drug is safe and effective.
See http://www.fda.gov/cder/orange/obannual.pdf.
---------------------------------------------------------------------------
Thus, the term ``medicinal opium'' is now obsolete. The term's
obsolescence itself provides ample reason to disregard it in
determining the scope of the United States' obligations with respect to
marijuana. But even if the term is still relevant, Respondent ignores
that the term referred to a product which had not only been extracted
from the opium poppy but had also undergone several further processes
(including the addition of another substance, lactose) to prepare it
for use in other drugs and to obtain a specific and standardized
content of morphine, its primary active ingredient. See British
Pharmacopoeia 2008, at 1599 (``Raw opium is intended only as a starting
material for the manufacture of galenical preparations. It is not
dispensed as such.''); GX 53, at 3 (letter of GW Pharmaceuticals)
(``[O]pium is a Schedule II substance, but it merely provides the
starting material for a number of pharmaceutical dosage forms that are
lawfully marketed in the U.S. Herbal opium is not itself used directly
by patients.'').
Indeed, the inclusion of ``medicinal opium'' in the various older
Pharmacop[oelig]as indicates that there were recognized standards for
the substance's manufacture and composition and that the drug had an
accepted medical use in humans. See, e.g., The United States
Pharmacopeia (17th Rev. ed. 1965), at xxv (noting that federal law
``designate[s] the Pharmacopeia as establishing the standards of
strength, quality, and purity of medicinal products recognized therein
when sold in interstate commerce for medicinal use''); \59\ see also
The United States Pharmacopeia 2008, at v (``USP 31 * * * contains
science-based standards for drugs, biologics, dietary, and excipients
used in dosage forms and products. With few exceptions, all articles
for which monographs are provided in USP 31 * * * are legally marketed
in the United States or are contained in legally marketed articles.'');
British Pharmacopoeia 2008, at 4 (``The requirements stated in the
monographs of the Pharmacopoeia apply to articles that are intended for
medicinal use. * * * An article intended for medicinal use that is
described by means of an official title must comply with the
requirements of the relevant monograph.'').
---------------------------------------------------------------------------
\59\ See also European Pharmacopoeia 1, Sec. 1.1 (4th ed. 2001)
(General Statements) (``The active ingredients (medicinal
substances), excipients (auxiliary substances), pharmaceutical
preparations and other articles described in monographs are intended
for human consumption and veterinary use (unless explicitly
restricted to one of these uses)'').
---------------------------------------------------------------------------
In contrast, there are no recognized standards with respect to
herbal marijuana. And consistent with the recognition in almost every
country that marijuana has no accepted medical use, neither marijuana,
cannabis, nor THC is listed in the various pharmacopeias. See The
United States Pharmacopeia 2008, at 1620, 2588-2589, 3366-3367; British
Pharmacopoeia 2008, at 375-376, 1373-1374, 2111-2112; European
Pharmacopoeia, at 777, 1495, 1997. Cf. James Everard's Breweries v.
Day, 265 U.S. 545, 562 (1924) (rejecting contention that Congress
arbitrarily determined that ``intoxicating malt liquors possessed no
substantial and essential medicinal properties''; ``Neither beer nor
any other intoxicating malt liquor is listed as a medicinal remedy in
the United States Pharmacopeia. They are not generally recognized as
medicinal agents. There is no consensus of opinion among physicians and
medical authorities that they have any substantial value as medical
agents. * * * '').
Moreover, it is beyond question that, in the United States,
marijuana has no currently accepted medical use and there are no FDA-
approved medical products consisting of marijuana. See OCBC, 532 U.S.
at 491 (``for purposes of the [CSA], marijuana has `no currently
accepted medical use' at all.''); 66 FR at 20052 (as stated by the FDA,
``[t]here are no FDA-approved marijuana products.''). Thus, by any
plausible application of the term ``medicinal opium'' to cannabis, as a
factual matter, there is currently no such thing in the United States
as ``medicinal cannabis.'' Respondent effectively concedes this point,
by describing the purpose of his proposed registration as being ``to
develop the marijuana plant into an
[[Page 2117]]
FDA-approved prescription medicine.'' GX 3, at 1 (emphasis added).
Finally, even if all the foregoing considerations were ignored and
DEA were to treat the marijuana that Respondent seeks to grow as akin
to ``medicinal opium'' for purposes of the Single Convention,
Respondent's proposed activity would still be inconsistent with the
Convention for the following reason. As the Commentary explains:
``Opium-producing countries may thus authorize private manufacture of,
and private international and domestic wholesale trade in, medicinal
opium and opium preparations. The opium other than medicinal opium
needed for such manufacture must however be procured from the national
opium agency.'' Commentary at 284 (emphasis added). Thus, under the
Convention, even if ``medicinal cannabis'' may be privately traded, the
treaty requires that the raw material needed to produce the ``medicinal
cannabis'' (i.e., the marijuana plant material) must be obtained from
the national cannabis agency. This again reflects the central theme of
cannabis control under the Single Convention--that the national agency
must control the production and distribution of the raw marijuana
material used for research or any other permissible purpose.
Respondent's unwillingness to accept this principle illustrates how his
proposed registration is fundamentally at odds with the treaty.
The ALJ also reasoned that the marijuana Respondent seeks to grow
would qualify under the Convention as ``special stocks'' and thereby be
exempt from the ``exclusive government's right to maintain stocks.''
ALJ at 82. Even Respondent acknowledges the ALJ's error on this point.
See Respondent's Resp. at 12 (``[I]t is evident that [the ALJ] simply
inadvertently referenced the wrong term from Article 1.''). The term
``special stocks'' under the Convention refers to ``drugs held in a
country or territory by the Government of such country or territory for
special government purposes and to meet exceptional circumstances.''
Single Convention, Art. 1, para. 1(w). Neither party is suggesting, and
there is no basis to conclude, that the marijuana Respondent seeks to
produce fits into this definition.\60\
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\60\ The term ``special stocks'' is operative in the Single
Convention only in ways that have no bearing on this adjudication.
See art. 19, paras. 1(d) & 2(d) (requiring parties to furnish the
INCB with annual estimates of, among other things, ``[q]uantities of
drugs necessary for addition to special stocks'' and amounts taken
therefrom); art. 20, para. 3 (parties' statistical returns to INCB
need not address those relating to special stocks); art. 21, para. 2
(explaining how to take into account special stocks for purposes of
countries' limitations on manufacture and importation).
---------------------------------------------------------------------------
While recognizing that the ALJ misread the term ``special stocks,''
Respondent argues that the marijuana he seeks to produce nonetheless
qualifies as retail ``stocks,'' because it is marijuana that will be
held `` `by institutions or qualified persons in the duly authorized
exercise of therapeutic or scientific functions.' '' Id. (quoting
Single Convention, art. 1, para. 1(x)). Respondent thus contends that
the marijuana he seeks to produce is exempt from the government
monopoly provisions of article 23, paragraph 2, subparagraph (e).
Respondent is mistaken. The entire text of the relevant provision
explains that the marijuana Respondent would maintain does not fall
within the exception to the definition of ``stocks.'' What is excluded
under the treaty from the definition of ``stocks'' are those drugs held
``[b]y retail pharmacists or other authorized retail distributors and
by institutions or qualified persons in the duly authorized exercise of
therapeutic or scientific functions.'' Single Convention, art. 1, para.
1(x)(iv). As this provision makes plain, the exemption applies only to
the drugs held by those persons or entities who are authorized to
dispense to ultimate users.
Respondent is not, however, a licensed pharmacist or physician and
obviously cannot legally seek a practitioner's registration, which is
required to dispense. See 21 U.S.C. 823(f). Rather, he is seeking to
produce raw cannabis plant material to supply researchers. His proposed
activity thus does not fall within the exemption for ``qualified
persons in the duly authorized exercise of therapeutic or scientific
functions'' within the meaning of the Single Convention.
Moreover, even with respect to cannabis material acquired for
retail purposes that does fit within the exception of article 1,
paragraph (x)(iv), the treaty still requires that such material be
obtained via the national agency. As the Commentary explains with
respect to opium (and therefore also with respect to cannabis, by
virtue of article 28), while ``[t]he retail trade in, and other retail
distribution of, opium * * * need not be in the hands of the
monopoly[,] [r]etail traders or distributors must, however, acquire
their opium from the'' Government. Commentary at 284. Respondent's
arguments repeatedly fail to acknowledge or accept this concept that
lies at the core of the Single Convention. Yet, there is no escaping
that, by seeking through his application to dismantle the existing
Government control over the distribution of cannabis produced by
growers and turn a share of that control over to MAPS, Respondent's
goal is antithetical to the treaty. For the foregoing reasons, the
provision of article 1, paragraph (x)(iv) exempting certain material
from the definition of ``stocks'' does not support Respondent.
As for Respondent's point that DEA has previously allowed the
University of Mississippi to grow marijuana to produce ``marijuana
extracts that the University then sells to pharmaceutical companies to
develop products'' (Resp. Prop. Findings at 68), it is true that DEA
has previously allowed such activity under a Memorandum of Agreement
(MOA) that was entered into in 1999. GX 78. However, that MOA expressly
states:
In accordance with articles 23 and 28 of the Single Convention
on Narcotic Drugs, 1961 (``Single Convention''), private trade in
``cannabis'' is strictly prohibited. Therefore, the Center shall not
distribute any quantity of marijuana to any person other than an
authorized DEA employee.
The Single Convention does not prohibit private trade in
``cannabis preparations,'' however. A ``cannabis preparation,''
within the meaning of the Single Convention, is a mixture, solid or
liquid containing cannabis, cannabis resin, or extracts or tinctures
of cannabis. The THC that the Center will extract from marijuana
would be considered such a ``cannabis preparation.'' Therefore, the
Center may, in accordance with the Single Convention, distribute the
crude THC extract to private entities (provided such distributions
of THC by the Center comply with all requirements set forth in the
CSA and DEA regulations).
Id. at 2-3 (footnote explaining treaty definition of cannabis omitted).
Thus, the MOA was specifically designed to ensure that the University
of Mississippi would not be distributing cannabis outside of the
Government-controlled system required by the Single Convention. See
Single Convention, art. 23, para. 1(e) (exempting ``preparations'' from
government monopoly on wholesale distribution). In contrast, Respondent
does not seek to distribute a cannabis extract or any other processed
cannabis material that constitutes a ``preparation'' within the meaning
of the Single Convention. Instead, Respondent seeks to grow and
distribute marijuana plant material that has undergone no processing
other than drying (and therefore does not come within the Single
Convention definition of ``preparation'').\61\
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\61\ The above-quoted 1999 MOA was issued with respect to the
University of Mississippi's 1998 application to become registered to
manufacture marijuana for the purposes of product development. GX
78, at 1-2. In 2005, the University of Mississippi applied for a new
registration to manufacture marijuana ``to prepare marihuana extract
for further purification into bulk active [THC] for use in launching
FDA-approved pharmaceutical products.'' 70 FR 47232; see also Tr.
1521. DEA has not yet issued a final order as to this application
and the University therefore does not currently have DEA
authorization to undertake such activity. As with Respondent's
application, DEA may only grant the pending University of
Mississippi application if the agency determines that the University
has demonstrated that the registration would be consistent with
United States treaty obligations and the public interest. See GX 79,
at 3. In making such determinations, DEA will not simply rely on the
prior issuance of registration under the 1999 MOA but will consider
the application anew, in view of the current circumstances and
consistent with this final order. Among other things that must be
considered with respect to the pending University of Mississippi
application, I note that the Commentary to the Single Convention
states the following with respect to the exemption for ``opium
preparations'' under Article 23, paragraph (e): ``Opium-producing
countries may thus authorize private manufacture of, and private
international and domestic wholesale trade in, medicinal opium and
opium preparations. The opium other than medicinal opium needed for
such manufacture must however be procured from the national opium
agency.'' Commentary at 284 (emphasis added). Whether the University
of Mississippi's proposed registration would be consistent with this
aspect of the treaty has not yet been determined by DEA and is not
the subject of this adjudication.
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[[Page 2118]]
As the foregoing demonstrates, while the Single Convention does not
necessarily prohibit the registration of an additional manufacturer,
what it does prohibit is the wholesale distribution of plant-form
marijuana by any entity other than the United States Government.
Respondent is not under contract with HHS to supply it with marijuana
and has made clear that the purpose of his registration is to
distribute marijuana outside of the HHS system. Because it is clear
that Respondent's proposed activity is not within one of the exemptions
from the obligatory government monopoly imposed by the Convention, he
has failed to show that his proposed activities would be consistent
with the Single Convention.\62\ See 21 U.S.C. 823(a). Accordingly, his
proposed registration is precluded under Federal law.
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\62\ Though the above discussion provides ample basis on which
to conclude that Respondent has failed to meet his burden of proving
that his proposed registration is consistent with United States
obligations under the Single Convention, I also note briefly the
following statement in the Commentary regarding the obligation of
the United States under article 23, paragraph 2(a) to designate the
areas in which cultivation takes place: ``It is also suggested that
[such areas] should to the greatest extent possible be located in
the same part of the country, and be contiguous, in order to
facilitate more effective control.'' Commentary at 280. Thus, in a
situation in which a country that is a party to the treaty allows
for multiple growers of opium or cannabis with the national agency
maintaining control over the distribution of such material in
accordance with the Single Convention, the Commentary suggests that
proper adherence to the treaty would result in that country keeping
the growers located as near as possible to one another.
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B. Whether Respondent's Proposed Registration Is Consistent With the
Public Interest
As explained in the preceding section, Respondent's registration is
clearly inconsistent with the United States' obligations under the
Single Convention. While this ground alone compels DEA to deny the
application, as explained below, an analysis of the public interest
criteria of 21 U.S.C. 823(a) leads to the conclusion that Respondent's
registration is inconsistent with the public interest. This provides a
separate basis--independent of the treaty consideration--on which the
application must be denied.
As stated above, under Sec. 823(a), there are six factors that
must be evaluated in determining whether a proposed registration is
consistent with the public interest. The public interest factors ``are
considered in the disjunctive.'' Southwood Pharmaceuticals, Inc., 72 FR
36487, 36497 (2007). I may rely on any one or a combination of factors
and give each factor the weight I deem appropriate in determining
whether to deny an application for a registration. See Green Acre
Farms, Inc., 72 FR 24607, 24608 (2007); ALRA Laboratories, Inc., 59 FR
50620, 50621 (1994). Moreover, I am ``not required to make findings as
to all of the factors.'' Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir.
2005); Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005).
1. Public Interest Factor One
The first public interest factor is the:
maintenance of effective controls against diversion of
particular controlled substances and any controlled substance in
schedule I or II compounded therefrom into other than legitimate
medical, scientific, research, or industrial channels, by limiting
the importation and bulk manufacture of such controlled substances
to a number of establishments which can produce an adequate an
uninterrupted supply of these substances under adequately
competitive conditions for legitimate medical, scientific, research,
and industrial purposes.
21 U.S.C. 823(a)(1) (emphasis added).
As the ALJ observed, DEA has construed paragraph 823(a)(1) in two
different ways in prior final orders, both of which were simultaneously
upheld in a case that was reviewed by a United States Court of Appeals.
ALJ at 82-83. Because of this, I have undertaken an extensive analysis
of this provision, which is found in part C of this discussion.\63\ For
the reasons explained therein, I believe that the most sound reading of
the text of paragraph 823(a)(1) requires DEA to consider limiting the
number of bulk manufacturers and importers of a given schedule I or II
controlled substance to that which can produce an adequate and
uninterrupted supply under adequately competitive conditions. The
Government so asserted in the Show Cause Order and throughout the
proceedings. Although Respondent offered a different interpretation of
paragraph 823(a)(1),\64\ he asserted that, under any interpretation,
this factor weighed in favor of finding the proposed registration
consistent with the public interest.\65\
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\63\ For ease of exposition, the detailed analysis of the
meaning of paragraph 823(a)(1) appears in a separate section of this
discussion (part C), due to its length.
\64\ See note 65, infra, regarding Respondent's proposed
interpretation of paragraph 823(a)(1).
\65\ Because I have concluded, for the reasons set forth in part
C of the discussion, that DEA is obligated under the text of
paragraph 823(a)(1) to consider limiting the number of bulk
manufacturers and importers of a given schedule I or II controlled
substance to that which can produce an adequate and uninterrupted
supply under adequately competitive conditions, I reject
Respondent's alternative reading of paragraph 823(a)(1).
Specifically, I reject the interpretation of paragraph 823(a)(1)
under which ``the registration should be granted without regard to''
adequacy of competition and supply so long as the ``registration
would not interfere with DEA's maintenance of effective diversion
controls.'' See Respondent's Resp. at 13. Respondent cites Noramco
v. DEA, 375 F.3d 1148 (D.C. Cir. 2004) in support of this
interpretation. Id.; Resp. Proposed Findings and Conclusion of Law
at 36. The Noramco decision is examined at length in part C of this
discussion. Because I interpret paragraph 823(a)(1) to require
consideration of the adequacy of supply and competition, I decline
to undertake an analysis of the facts of this case whereby the
adequacy of competition and supply is disregarded. However, as
indicated above, Respondent has alternatively argued that there is a
sufficient basis to grant his application when construing paragraph
823(a)(1) as requiring a showing of inadequate competition or
supply, and that argument is addressed at length in this final
order.
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As discussed at length in part C of this discussion, infra, to
properly construe paragraph 823(a)(1), it must be viewed in comparison
with Sec. 823(d)(1). Whereas Sec. 823(d)(1) contains no requirement
that DEA consider limiting in any way the total number of registered
manufacturers of controlled substances in schedules III, IV, and V,
paragraph 823(a)(1) does require DEA to consider limiting the total
number of bulk manufacturers of schedule I and II controlled
substances. Specifically, paragraph 823(a)(1) calls upon DEA to
consider ``limiting'' (i.e., placing an upper boundary on) the number
of registered bulk manufacturers of a given schedule I or II controlled
substance to that ``which can produce an adequate
[[Page 2119]]
and uninterrupted supply of these substances under adequately
competitive conditions for legitimate medical, scientific, research,
and industrial purposes.''
Thus, an applicant seeking to become registered to bulk manufacture
a schedule I or II controlled substance bears the burden of
demonstrating that the existing registered bulk manufacturers of a
given schedule I or II controlled substance are unable to produce an
adequate and uninterrupted supply of that substance under adequately
competitive conditions. As a threshold matter, Respondent misconstrues
this provision as placing the burden on DEA, whenever someone applies
for registration under 21 U.S.C. 823(a), to demonstrate that
competition is already adequate within the meaning of paragraph
823(a)(1). See Resp. Proposed Findings and Conclusion of Law at 47 (in
which Respondent contends that the ``requirement'' of ``adequately
competitive conditions'' ``is not met by the by the current NIDA
monopoly''). In fact, the DEA regulations plainly state that every
applicant seeking registration under Sec. 823(a) has ``the burden of
proving that the requirements for such registration pursuant to [this
section] are satisfied.'' 21 CFR 1301.44(a).
Accordingly, the analysis under paragraph 823(a)(1) (and
Respondent's burdens thereunder) must be divided into the following
parts: (a) an analysis of the adequacy of supply and (b) an analysis of
the adequacy of competition. If Respondent can demonstrate by a
preponderance of the evidence that either supply or competition is
inadequate within the meaning paragraph 823(a)(1), this weighs heavily
in favor of granting the registration. If, however, Respondent fails to
meet his burden with respect to both supply and competition, this
weighs heavily against granting the registration. (See part C of this
discussion.)
(a) Adequacy of Supply Within the Meaning of Paragraph 823(a)(1)
The first question under paragraph 823(a)(1) is whether Respondent
has demonstrated that the existing supply of marijuana is inadequate to
meet the legitimate needs of the United States. As the parties
essentially agree, the adequacy of supply of marijuana must be
evaluated in two respects: (i) quantity and (ii) quality.
(i) Adequacy of the Quantity of the Existing Supply
With respect to the adequacy of the quantity of supply, the record
establishes that as of the date of the hearing, there were
approximately 1055 kg of marijuana of various potencies in the NIDA
vault. RX 53. Moreover, some of this marijuana apparently had been
harvested as early as 1997, and it appears that as of the date of the
hearing, no marijuana had been grown since 2001. Id. For the following
reasons, this amount of existing supply far exceeds any present demand
for research-grade marijuana as well as any reasonably anticipated
demand for such marijuana in the foreseeable future.
Lawful research involving marijuana can be divided into two
categories: NIH-funded and privately funded. See GX 31, at 3. With
respect to NIH-funded research, Respondent does not contend, and there
is no basis in the record to conclude, that NIDA has failed to provide,
or is incapable of providing, an adequate quantity of marijuana.
Rather, to the extent Respondent is claiming that NIDA is unable to
provide an adequate quantity of marijuana,\66\ this claim relates to
privately funded researchers. Yet, even as to this claim, the evidence
indicates otherwise.
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\66\ Respondent appears to challenge the process by which NIDA
supplies marijuana to researchers and the quality of the marijuana,
rather than the quantity. See, e.g., Respondent's Resp. at 15-16.
The ALJ's recommendation regarding the adequacy of supply also
focused on the process by which NIDA supplies marijuana, and she was
not of the opinion actual quantity of marijuana supplied by NIDA was
inadequate. See ALJ at 84. Nonetheless, for the sake of
completeness, and in accordance with 21 U.S.C. 823(a)(1), I am
addressing the adequacy of supply from a quantitative perspective.
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The record reflects that since HHS changed its policies in 1999 to
make marijuana more readily available to researchers (by, among other
things, allowing privately funded researchers to obtain marijuana),
every one of the 17 CMCR-sponsored pre-clinical or clinical studies
that requested marijuana from NIDA was provided with marijuana. GX 31,
at 3; Tr. 694-95. Significantly, according to one of the witnesses who
testified on behalf of Respondent, CMCR funding of research involving
marijuana has currently ended and it appears doubtful that a resumption
of such funding is ``on the horizon.'' Tr. at 397-402, 441. Thus, the
witness testified, once the research projects sponsored by CMCR that
utilize NIDA marijuana reach their conclusion, ``[i]t's likely that the
[CMCR] research is done.'' Id. at 401-02. Other than the CMCR-sponsored
research, the record reveals only one other instance in which a
privately funded researcher sought marijuana from NIDA after HHS
changed its policies in 1999 to make marijuana more readily available
to researchers. That one other instance was the MAPS-sponsored request
submitted by Chemic to obtain marijuana to conduct research on the
Volcano. See RX 52B. According to Mr. Doblin, Chemic ``applied to NIDA
to purchase ten grams'' of marijuana. Tr. 531; RX 14. Although, as
discussed above, HHS denied that request on scientific grounds (see RX
52B), there is no basis to conclude that NIDA was incapable of
providing Chemic with the quantity of marijuana it was seeking. Indeed,
the ten grams of marijuana that Chemic requested is less then one
100,000th of the amount of marijuana that NIDA has available to supply
researchers. See RX 53.
Accordingly, the evidence overwhelmingly establishes that NIDA is
capable of providing an adequate quantity of marijuana to meet all
current and foreseeable research needs of the United States. And while
NIDA's existing system for supplying marijuana is quantitatively
adequate regardless of how much or how little additional marijuana
Respondent seeks to produce, it is notable that the approximately 1055
kg of marijuana currently on hand is more than 90 times the amount of
marijuana that Respondent proposes to grow.
Respondent nonetheless contends that the process by which HHS
provides marijuana to researchers--which involves a peer review of the
scientific merits of the research proposal \67\--results in a barrier
to research that effectively renders the supply of marijuana
inadequate. Respondent points to three prior incidents to support his
contention that the HHS scientific review process impedes research. As
discussed above, the first two of these incidents (those involving Dr.
Abrams and Dr. Russo) are irrelevant as they occurred before HHS
adopted its new procedures in 1999 for making marijuana more widely
available to researchers.\68\ The third incident involved the
application of Chemic to obtain marijuana to conduct research on the
Volcano. As discussed above, HHS
[[Page 2120]]
declined to supply Chemic with marijuana in 2005 based on scientific
considerations, finding that Chemic's then-latest proposed study was
duplicative of prior and ongoing research and not likely to provide
useful data. Thus, the success of Respondent's claim that the HHS
scientific review process renders the existing supply of marijuana
inadequate depends on whether one accepts Respondent's assumption that
anyone in the United States who has a proposed research project
involving marijuana should be entitled to obtain marijuana--regardless
of whether the competent Government authority finds the research to be
lacking in scientific merit.\69\
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\67\ Tr. at 1626-28, 1635. In his testimony, Dr. Gust explained
the term ``peer review'' as follows: ``Peer review is a process that
has been used, certainly by NIH, and I think in other agencies in
the Department of Health and Human Services, and probably the
Federal Government, where outside expertise is acquired and outside
opinions on the scientific merit of specific research proposals.''
Id. at 1627. Dr. Gust added that the NIH peer review committees
``review proposals three times a year for the NIH, and there are--
occasionally a Federal employee participates in one of those
reviews, but probably 90 percent or more of the participants are
researchers who are in the private sector, for the most part in
academic institutions.'' Id. at 1627-28.
\68\ Further, as discussed above, the evidence indicates that
the denials involving of Dr. Abrams and Dr. Russo were based on HHS
finding their protocols to be lacking in scientific merit.
\69\ It is not even clear whether Respondent continues to cite
the Chemic situation of an example of supposedly ``legitimate
research'' for which HHS declined to provide marijuana. While
Respondent did so characterize the Chemic situation in his proposed
findings of fact and conclusions of law (at 14), in his subsequently
filed response to the Government's exceptions to the ALJ
recommendation, he listed only Dr. Abrams and Dr. Russo as examples
of ``legitimate research'' for which marijuana was not supplied.
Respondent's Resp. at 16. As noted, the incidents involving Dr.
Abrams and Dr. Russo occurred prior to HHS's promulgation of the
1999 guidelines. As such, these incidents are not probative of the
current availability of research-grade marijuana from HHS.
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Respondent's assumption about who is entitled to conduct research
with marijuana is directly undercut by the text of the CSA. As set
forth in 21 U.S.C. 823(f), persons seeking to conduct research with
schedule I controlled substances (such as marijuana) may only obtain a
DEA registration ``for the purpose of bona fide research'' (emphasis
added), with the Secretary of HHS being responsible for determining
``the qualifications and competency'' of the applicant ``as well as the
merits of the research protocol.'' The process HHS has established to
assess the scientific merit of proposed research studies involving
marijuana is that described in the 1999 HHS announcement of its new
procedures.\70\ GXs 24 & 31; Tr. at 1626-35. That Respondent finds this
process to be scientifically rigorous \71\--and thereby not
automatically accepting of any proposed study sponsored by MAPS--
provides no basis for any valid objection or any contention that the
HHS supply of marijuana is inadequate.\72\
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\70\ Respondent points out that the Secretary of HHS has
delegated to the FDA Commissioner the Secretary's functions under 21
U.S.C. 823(f) relating to research with controlled substances in
schedule I. Respondent's Resp. at 4-5 (citing FDA Staff Manual
Guides 1410.10). While this is correct as a general matter for
schedule I controlled substances, the record plainly indicates that
with specific regard to research involving marijuana, HHS has
retained its authority to determine the qualifications and
competency of the researcher, as well as the merits of the research
protocol, for purposes of Sec. 823(f). See GX 24. Indeed, the 1999
HHS announcement of its policies for providing marijuana to
researchers expressly states: ``To receive such a registration
[under Sec. 823(f)], a researcher must first be determined by HHS
to be qualified and competent, and the proposed research must be
determined by HHS to have merit.'' Id. at 1 (emphasis added). Dr.
Gust's testimony confirms that, in fact, HHS--through its peer
review process--does make these determinations for persons seeking
to conduct research with marijuana. Tr. 1626-35.
Moreover, as discussed above, Respondent produced no evidence
showing that HHS has denied marijuana to any clinical researcher
with an FDA-approved protocol subsequent to the adoption of the 1999
guidelines. The lone applicant whose post-1999 request for marijuana
was denied (Chemic) submitted its request to, and had it reviewed by
HHS--not FDA. See GXs 49 & 52B. For all these reasons, it is
unfounded for Respondent to suggest that the supply of marijuana is
somehow inadequate because HHS has not assigned FDA sole
responsibility for determining what research proposals involving
marijuana are scientifically meritorious.
\71\ Any suggestion that the HHS scientific review process is
unduly rigorous is belied by the testimony of Dr. Gust that the
``scientific bar has been set very low, [so] that any project that
has scientific merit is approved,'' and that ``anything that gets
approved gets NIDA marijuana'' (Tr. at 1700-01) as well as the
uncontroverted evidence that every one of the 17 CMCR-sponsored
research protocols submitted to HHS was deemed scientifically
meritorious by HHS and was supplied with marijuana (GX 31, at 3; Tr.
694-95).
\72\ For the same reasons, I find wholly unpersuasive the ALJ's
recommended finding that the supply of marijuana is inadequate
because of the HHS scientific review process.
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(ii) Adequacy of the Quality of the Existing Supply
As for Respondent's contention that the quality of marijuana
supplied by NIDA is unsatisfactory and that this renders the supply of
marijuana inadequate within the meaning of 21 U.S.C. 823(a)(1), the ALJ
rejected this contention, finding that a preponderance of the evidence
established that ``the quality is generally adequate.'' ALJ at 84. In
this regard, Respondent contended that NIDA's marijuana was of
inconsistent potency, that it was of too low a potency, that it
included stems and seeds, that it was not fresh, and that some of the
patients had complained that it ``was the worst marijuana they had ever
sampled.'' Resp. Proposed Findings at 16-27 & 49.
As found above, Respondent's contentions rest largely on snippets
taken from questionnaires which were completed by a number of
researchers. On balance, however, the researchers indicated their
overall satisfaction with NIDA's marijuana and noted that the agency
had been accommodating and responsive to their concerns. See, e.g., GX
16, at 6 & 19. Moreover, most of the researchers indicated that the
potency of NIDA's product was adequate and had not compromised their
research. See, e.g., GX 16, at 6 & 15; GX 17, at 9. Furthermore, while
Respondent notes that several researchers stated that it would be
beneficial to evaluate a higher potency product, he produced no
evidence that any researcher had obtained approval from FDA and other
reviewing authorities to conduct clinic trials with such a product. See
GX 21, at 9 (researcher explaining that he ``wanted to use a higher
potency product but there were questions from the [scientific review
board] and the'' CMCR). In any event, the evidence establishes that
NIDA's stock includes substantial quantities of high THC content
marijuana and that its contractor is capable of producing marijuana
with a THC content of up to twenty percent.\73\ Tr. 1203-05.
---------------------------------------------------------------------------
\73\ Despite Respondent's suggestion that human research
subjects should be given marijuana of higher potencies than that
supplied by NIDA (see, e.g., Tr. 552, 567 (testimony of Mr.
Doblin)), there is no basis in the record to conclude that it would
be medically or scientifically appropriate to do so. To the
contrary, Dr. ElSohly testified that he was told by CMCR researchers
that they did not want Dr. ElSohly to supply them with marijuana
with a THC content as high as eight percent because, based on their
prior observations of research subjects being given NIDA marijuana
containing eight percent THC, ``the subject couldn't tolerate that,
and if we can make a six percent, that would be more appropriate.''
Tr. 1280. Dr. ElSohly also testified that other scientists expressed
the same opinion that six percent THC content was preferable because
the research subjects ``would not tolerate'' marijuana with eight
percent THC. Tr. 1295. Large doses of marijuana (in terms of the
amount of THC administered) have been found to cause adverse mood
reactions, including anxiety, paranoia, panic, depression,
dysphoria, depersonalization, delusions, illusions, and
hallucinations. RX 1, at 102. A primary reason that researchers are
required to submit an IND to FDA prior to engaging in research with
human subjects is ``to assure the safety and rights of subjects.''
21 CFR 312.22(a).
---------------------------------------------------------------------------
Related to this argument, Respondent also contends that NIDA's
marijuana has stems and seeds and that some patients complained that
``that the marijuana is inferior in sensory qualities (taste,
harshness) than the marijuana they smoke outside the laboratory. Some
have stated it was the worst marijuana they had ever sampled.'' Resp.
Proposed Findings at 20 (other citation omitted); see also id. at 49.
The evidence establishes, however, that the contractor has rectified
the problem with respect to the stems and seeds. Tr. 1301.
As for the complaints regarding the sensory qualities of NIDA's
products, only a small percentage of the numerous studies' subjects
complained about the harshness of NIDA's marijuana, and as one
researcher explained, it is not clear whether it was placebo or actual
marijuana that was the cause of the complaints. GX 18, at 7. Relatedly,
it seems a strained argument for Respondent to make that experienced
[[Page 2121]]
marijuana smokers reported, after consuming a hallucinogenic substance,
that they found NIDA's marijuana to be less pleasing to their senses
than the marijuana they had illegally obtained and used. People
generally take medicines--which marijuana is not--for their therapeutic
benefits and not their taste. And in any event, Respondent has not
established that NIDA's products were unsuitable for their intended
use.\74\
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\74\ Moreover, Respondent presented no evidence to show that he
is capable of producing marijuana with any degree of quality
control--let alone the type of evidence that would allow an
inference that he could improve upon the quality of marijuana
produced at the University of Mississippi. To the contrary, as
explained below in the discussion of public interest factor five,
Respondent's lack of experience in growing marijuana is in stark
contrast to Dr. ElSohly's decades of experience in manufacturing,
analyzing, and publishing scientific articles on the subject.
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For these reasons, I accept the ALJ's recommended finding that
Respondent did not meet his burden of demonstrating that NIDA is
incapable of providing marijuana of sufficient quality to meet the
legitimate research needs of the United States.
Thus, I conclude that the evidence does not support Respondent's
contention that the supply of marijuana is inadequate--in terms of
quantity or quality--within the meaning of paragraph 823(a)(1).
(b) Adequacy of Competition Within the Meaning of Paragraph 823(a)(1)
The second question under paragraph 823(a)(1) is whether Respondent
has demonstrated that the existing supply of marijuana is not being
produced under adequately competitive conditions to meet the legitimate
needs of the United States. Again, as explained below in part C of this
discussion, paragraph 823(a)(1) does not require DEA simply to register
as many bulk manufacturers of a given schedule I or II controlled
substance as the market will bear. Nor does paragraph 823(a)(1) require
the registration of an additional bulk manufacturer based merely on the
assertion the additional registration will result in some vague,
theoretical incremental increase in competition. If such a theoretical
assertion would suffice, then the language of paragraph 823(a)(1)
requiring DEA to consider ``limiting'' the number of registered bulk
manufacturers would be rendered meaningless. This is because every
person seeking to enter the market as a new bulk manufacturer of a
given schedule I or II controlled substance could make the theoretical
claim that every new registrant increases the overall amount of
competition.
Thus, to avoid reading the limiting language of paragraph 823(a)(1)
in a superfluous manner, in final orders where DEA has analyzed
competition under paragraph 823(a)(1), DEA has looked to empirical
data; specifically, DEA has focused on the historical and present
prices charged to those who lawfully acquire the controlled substance
from the existing registered bulk manufacturers.\75\ This approach is
consistent with the following statement made by the Department of
Justice stated during Congressional hearings leading up to the
enactment of the CSA:
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\75\ See Penick Corporation Inc., 68 FR 6947 (2003); Roxane
Laboratories, Inc., 63 FR 55891 (1998).
There is no reason to assume that the Attorney General will
prejudice his primary objectives of effective control by excessive
licensing. Nor will he undertake direct price control. He will be
empowered to take cognizance of evidence showing that prices are
clearly and persistently excessive. The criteria for determining
whether prices far exceed that which is reasonable relate to
reasonable costs and reasonable profits. * * * If evidence indicates
that additional licensing will result in more reasonable prices with
no significant diminution in the effectiveness of drug control, the
Attorney General should be able to license the additional
manufacturers.\76\
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\76\ Hearings Before the Subcomm. to Investigate Juvenile
Delinquency of the Comm. on the Judiciary, United States Senate,
91st Cong. 372 (1969) (discussed more fully in part C of this
discussion).
Here, the evidence demonstrates that NIDA has always provided
marijuana to researchers at cost or for free--and at no profit to NIDA.
Privately funded researchers receive marijuana at NIDA's cost \77\ and
HHS-funded researchers (who have historically comprised the bulk of the
marijuana recipients) receive the marijuana at no cost. GX 24, at 2; GX
31, at 3; Tr. 1212, 1633, 1670-71. Thus, there is no basis to suggest
that the cost to any researcher under the existing supply arrangement
is unreasonable. Respondent himself does not so contend; nor does he
claim that the cost to any researcher of obtaining marijuana would be
lower if Respondent became registered to grow marijuana. Respondent
hypothesizes that ``if another manufacturer could produce suitable
medical marijuana for a lower cost, competitive conditions would, as
they usually do, benefit the researcher-consumer.'' Resp. Prop.
Findings at 48. However, Respondent provides no evidentiary basis for
the proposition that he (or anyone else) could produce marijuana at a
lower cost than NIDA. Moreover, Mr. Doblin acknowledged that MAPS would
have a ``profit-making'' motivation as part of its ``operation'' to
supply marijuana for the purposes of drug development, and that this
would impact ``costs.'' Tr. 605-606. In contrast, there is no evidence
that HHS or NIDA is driven in any respect by a profit motive in
deciding to whom and at what cost to supply marijuana. Even accepting,
arguendo, Mr. Doblin's testimony that ``we [MAPS] would either provide
[marijuana] free or at cost through donations to MAPS to other
researchers who are not doing MAPS funded projects'' (Tr. at 589), this
would still not demonstrate a lowering of the cost to researchers. This
is because, if MAPS were so willing to fund all researchers, they could
do so under the existing system by paying NIDA on a cost-reimbursable
basis for the marijuana, allowing the researchers to obtain the
marijuana at no cost to the researchers. Thus, Respondent has not
demonstrated that competition is inadequate in the way that other
applicants for registration under Sec. 823(a) have successfully done
in prior final orders; i.e., by focusing on prices charged by the
existing registrants that supply the market for the schedule I or II
controlled substance in question and showing those prices to be
unreasonable.\78\
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\77\ According to Dr. ElSohly, where marijuana is supplied to
privately funded researchers, ``the researchers would just pay the
production costs.'' RX 5, at 2.
\78\ See Penick Corporation, supra; Roxane Laboratories, supra
(both of which are examined in part C of this discussion). As one
DEA scientist testified in this proceeding, based on his experience,
when the agency has historically considered the adequacy of
competition within the meaning of paragraph 823(a)(1), the analyses
``all seem to be geared around the economics.'' Tr. at 945.
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Respondent also claims that the process by which the NIDA contract
is awarded is not adequately competitive because the contract requires
not only that the contractor manufacture marijuana, but also that it
analyze marijuana samples sent in by law enforcement agencies. Id. at
48. Respondent further contends that the NIDA process ``does not ensure
that researchers pay a competitive price [because] NIDA sets the price
and there is no evidence as to how that price is set.'' Id. Finally,
Respondent rehashes his argument regarding the quality of NIDA's
marijuana contending that granting his application would promote
competition and improvement in the quality of research marijuana. Id.
at 49.
The ALJ agreed with Respondent and rejected the Government's
contention that the NIDA process provides for adequate competition
because demand for research grade marijuana is limited, the contract is
periodically put up for
[[Page 2122]]
competitive bidding, and the Convention requires that the Government
maintain a monopoly on the wholesale distribution of the substance.
More specifically, the ALJ reasoned that ``[t]he question is not * * *
whether the NIDA process addresses that agency's needs, but whether
marijuana is made available to all researchers who have a legitimate
need for it in their research.'' ALJ at 85. Based on her finding that
NIDA denied marijuana to two researchers, the ALJ ``answer[ed] that
question in the negative.'' Id.
The ALJ also reasoned that analyzing marijuana samples was ``a
separate activity from cultivating marijuana for research purposes and
a requirement that a qualified cultivator may not be able to fulfill.''
Id. The ALJ thus concluded that ``the NIDA contractual process does not
* * * render competition in the manufacture of marijuana adequate.''
Id.
I reject both the ALJ's legal conclusions and Respondent's
arguments. As for the ALJ's (and Respondent's) reasoning that the NIDA
contractual process does not render competition adequate because the
contract requires the analyzing of marijuana samples, in executing its
authority under Sec. 823(a), DEA does not act as a board of contract
appeals. In any event, the contract does not prohibit the contractor
from subcontracting this function. See GX 15, at 4 (Request for
Proposal) (``As this procurement may require expertise in several
scientific areas, offerors are encouraged to solicit subcontractors or
expert consultants as appropriate.'') (emphasis added).\79\
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\79\ The University of Mississippi subcontracts to another
entity, Research Triangle Institute (RTI), the responsibilities
under the contract to produce the marijuana cigarettes (using
marijuana supplied by the University of Mississippi) and deliver
them to authorized recipients. Tr. 1162-65, 1168-69; see also 72 FR
73369 (notice of registration for RTI).
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Finally, as for the contention that granting his application would
provide for competition and thereby promote improvement in the quality
of research-grade marijuana,\80\ if Respondent believes that he can
produce a higher-quality product than the current contractor, he should
bid on the contract.\81\ If he prevails, and demonstrates that his
project will implement effective controls against diversion, he can
establish that his registration would be consistent with the public
interest. Respondent, however, has not been awarded a contract to
supply NIDA, which, consistent with the Single Convention, is the only
lawfully authorized wholesale distributor of plant-form marijuana.
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\80\ As discussed above, Respondent failed to put forth any
evidence demonstrating that he is capable of any type of quality
control relating the manufacture of marijuana and his lack of
experience and expertise in this field compared to that of Dr.
ElSohly suggests that he is incapable of improving on the quality of
marijuana produced by the University of Mississippi.
\81\ I also note Respondent's contention that the NIDA process
``does not ensure that researchers pay a competitive price [because]
NIDA sets the price and there is no evidence as to how that price is
set.'' Resp. Prop. Findings at 48. Even if marijuana were not
subject to the Convention's requirement, I would still reject the
argument because Respondent had the burden of proving that the
prices are excessive.
---------------------------------------------------------------------------
Thus, whether viewing the competition aspect of paragraph 823(a)(1)
by considering the reasonableness of prices paid by those who lawfully
acquire bulk marijuana for research or by considering the adequacy of
the competitiveness of the process by which persons may bid to become
the grower of marijuana for NIDA, Respondent has failed to meet his
burden. This combined with his failure to meet his burden of
demonstrating inadequate supply within the meaning of paragraph
823(a)(1) weighs heavily against granting his application. Nonetheless,
Respondent raises a host of arguments under the heading of paragraph
823(a)(1) which--though not actually germane to paragraph 823(a)(1)--
are addressed below.
(c) Additional Arguments Raised by Respondent Under the Heading of
Paragraph 823(a)(1)
In lieu of presenting evidence to show that competition is
inadequate by virtue of unreasonable prices for research-grade
marijuana or any other economic data, Respondent argues that
competition should be deemed inadequate within the meaning of paragraph
823(a)(1) based on his objection to the to ``government monopoly''
whereby HHS distributes marijuana to researchers. In other words, the
very monopoly over the wholesale distribution of marijuana that is
mandated by the Single Convention (indeed, the element that is at the
heart of the structure of cannabis control under the treaty) is the
central basis on which Respondent relies in attempting to meet his
burden of demonstrating inadequate competition within the meaning of
paragraph 823(a)(1). This argument is flawed in the following respects.
As explained above and in part C of this discussion, the competition
analysis set forth in paragraph 823(a)(1) must be based on actual
economic considerations in the existing market--not policy questions
about the wisdom of having the Federal Government control the wholesale
distribution of marijuana.
In addition, Respondent's suggestion that paragraph 823(a)(1) can
be used to defeat the Single Convention's requirement of a government
monopoly over wholesale marijuana distribution mistakenly construes the
treaty criterion Sec. 823(a) as being in competition with the public
interest criterion. In fact, as explained above, an applicant for
registration under Sec. 823(a) must demonstrate that the proposed
registration is consistent with both the Single Convention and the
public interest--and neither criterion is at odds with the other. Both
the Single Convention and the United States Code are the ``supreme law
of the land,'' U.S. Const. art VI, and in enacting the CSA, Congress
made clear that Sec. 823(a) should be interpreted in a manner that is
consistent with the United States' obligations under the Convention.
The Agency's interpretation of paragraph 823(a)(1) must therefore
recognize not only the Convention's specific provisions applicable to
marijuana, which expressly prohibit competition in the wholesale
distribution of the substance, but also the background principles which
underlie both the Convention and the CSA. Accordingly, I reject
Respondent's invitation to interpret Sec. 823(a) in a manner that
would abrogate the United States' obligation under the Convention to
maintain a monopoly in the wholesale trade of marijuana.
While Sec. 823(a) was enacted subsequent to the Convention--indeed
it implements the Convention \82\--it is a provision of general
applicability and contains no explicit reference to marijuana. Under
settled principles of statutory construction, while a later enacted law
can sometime repeal an earlier provision, `` `[r]epeals by implication
are not favored' and will not be presumed unless the `intention of the
legislature to repeal [is] clear and manifest.' '' National Ass'n of
Home Builders v. Defenders of Wildlife, 127 S.Ct. 2518, 2532 (2007)
(quoting Watt v. Alaska, 451 U.S. 259, 267 (1981)). Accordingly, courts
``will not infer a statutory repeal `unless the later statute expressly
contradict[s] the original act' or unless such a construction is
`absolutely necessary * * * in order that [the] words [of the later
statute] shall have any meaning at all.' '' Id. (quoting Traynor v.
Turnage, 485 U.S. 535, 548 (1988) (int. quotations and other citations
omitted)).
---------------------------------------------------------------------------
\82\ See H.R. Rep. 1444 (91st. Cong., 2d Sess.), reprinted at
1970 U.S.C.C.A.N. 4566, 4572.
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[[Page 2123]]
Here, this rule applies with added force for two reasons. First,
Respondent's construction would derogate the sovereign authority of the
United States. See, e.g., E. I. Du Pont de Nemours & Co. v. Davis, 264
U.S. 456, 462 (1924) (noting that in taking over the railroads, ``the
United States did so in its sovereign capacity * * * and it may not be
held to have waived any sovereign right or privilege unless plainly so
provided''); cf. Federal Power Comm'n v. Tuscarora Indian Nation, 362
U.S. 99, 120 (1960) (quoting United States v. United Mine Workers of
America, 330 U.S. 258, 272 (1947) (``There is an old and well-known
rule that statutes which in general terms divest pre-existing rights or
privileges will not be applied to the sovereign without express words
to that effect.''); Sea-Land Service, Inc., v. The Alaska R.R., 659
F.2d 243, 245 (D.C. Cir. 1981) (holding that ``[t]he Sherman Act * * *
does not expose United States instrumentalities to liability, whether
legal or equitable in character, for conduct alleged to violate
antitrust constraints'').
Second, Respondent's construction would result in the abrogation of
the Convention's provision. While Congress may abrogate a treaty, the
``legislation must be clear to ensure that Congress--and the
President--have considered the consequences.'' Roeder v. Islamic
Republic of Iran, 333 F.3d 228, 238 (D.C. Cir. 2003). The D.C. Circuit
has further explained that ``[t]he `requirement of [a] clear statement
assures that the legislature has in fact faced, and intended to bring
into issue, the critical matters involved in the judicial decision.' ''
Id. (quoting Gregory v. Ashcroft, 501 U.S. 452, 461 (1991)). See also
Vimar Seguros y Reaserguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 539
(1995) (``If the United States is to be able to gain the benefits of
international accords and have a role as a trusted partner in
multilateral endeavors, its courts should be most cautious before
interpreting its domestic legislation in such manner as to violate
international agreements.''); George E. Warren Corp. v. U.S. E.P.A.,
159 F.3d 616, 624 (D.C. Cir. 1998) (upholding agency rule which
``avoid[ed] an interpretation that would put a law of the United States
into conflict with a treaty obligation of the United States,'' and
observing that that ``[s]ince the days of Chief Justice Marshall, the
Supreme Court has consistently held that congressional statutes must be
construed wherever possible in a manner that will not require the
United States to violate the law of nations'') (internal quotations and
other citations omitted).
As explained above, Sec. 823(a) is not limited to applicants who
seek a registration to manufacture marijuana, but rather is a provision
that applies to every person who seeks a registration to manufacture
any one of the hundreds of other controlled substances listed in
schedules I and II. Paragraph 823(a)(1)'s direction to the Attorney
General to consider the adequacy of competition does not provide a
clear statement of congressional intent to abrogate the Convention's
requirement that the United States Government maintain a monopoly on
the wholesale trade in marijuana. Absent the requisite clear statement,
I conclude that to the extent the CSA seeks to promote adequate
competition in the supply of marijuana, the NIDA process satisfies
Congress' purpose by putting the contract up for competitive bidding at
periodic intervals then supplying the marijuana to researchers for free
or at NIDA's cost.
Respondent also contends that the current NIDA supply is
``inadequate because a pharmaceutical developer could not reasonably
rely on NIDA marijuana to take [plant-form] marijuana through the FDA
new drug approval process.'' Respondent's Resp. at 16; see also
Respondent Proposed Findings at 45 (``no rational drug sponsor seeking
to develop botanical marijuana as an FDA-approved product could proceed
without seeking a source of supply alternative to NIDA's''). Of note in
this regard, Mr. Doblin testified that MAPS could take plant-form
marijuana through the FDA-approval process for a cost of $5 to $10
million notwithstanding ample evidence that the actual costs would be
considerably more, and that he ``disagree[d]'' with the IOM's
conclusion that defined and purified cannabinoid compounds ``are
preferable to plant products, which are of variable and uncertain
composition.'' Tr. 654; RX 1, at 22. See also GX 53 (letter of GW
Pharmaceuticals; ``[H]erbal cannabis should comprise only the starting
material from which a bona fide medical product is ultimately
derived.''). Mr. Doblin also testified that the safety of smoked
marijuana would be only ``slightly different'' from that of drugs
containing cannabinoid extracts, Tr. at 605, notwithstanding the IOM's
further conclusion that smoking ``is a crude THC delivery system that
also delivers harmful substances'' such as those found in tobacco, and
that ``there is little future in smoked marijuana as a medically
approved medication.'' RX 1, at 195.
Mr. Doblin's testimony hardly suggests that he is a ``rational drug
developer.'' But even ignoring his testimony, Respondent's argument is
meritless. Respondent's contention that ``MAPS can have no confidence *
* * that NIDA would authorize MAPS to rely on'' NIDA's Drug Master
File, Resp. Proposed Findings at 44-45, ignores that under the HHS
Guidance, NIDA is required to ``provide the researcher with
authorization to reference'' it. GX 24, at 4. Moreover, neither Federal
law nor FDA's regulations require that a drug developer submit a Drug
Master File. FDA, Guideline for Drug Master Files, at 2.
Respondent further contends that NIDA would not be willing to serve
as supplier to a drug developer because doing so is not part of its
mission. It is, however, HHS, and not NIDA (which is only a
subcomponent therein) which sets policy on whether to provide
marijuana. As for Respondent's insinuation that HHS is biased against
research that seeks to develop plant-form marijuana into a prescription
medicine, it is true that Dr. Gust testified that HHS ``strongly
endorse[s]'' the IOM's view that if marijuana is to provide the basis
for a prescription medicine, it will be in a medicine which uses ``a
purified constituent'' and a non-smokable delivery system. Tr. 1722. A
view based on science is not bias. Moreover, Dr. Gust's testimony made
clear that PHS does not have a bias against research that is directed
at developing plant-form marijuana, id. at 1719-20, 1722; and that
whether plant-form marijuana should be approved as a prescription
medicine is a question for the FDA-approval process. Id. at 1720.
Respondent's contention to this effect is therefore rejected.
In sum, under the text of 21 U.S.C. 823(a)(1), to maintain
effective controls against diversion, DEA is obligated to consider
limiting the number of registered bulk manufacturers of any given
schedule I or II controlled substance to that which can produce an
adequate and uninterrupted supply of the substance under adequately
competitive conditions. Thus, every applicant for registration under
Sec. 823(a) bears the burden of demonstrating that either the existing
supply or competition is inadequate within the meaning of paragraph
823(a)(1). For the reasons provided above, Respondent has failed to
meet this burden. Accordingly, factor one weighs heavily against
granting his application.
2. Public Interest Factor Two
The second public interest factor is ``compliance with applicable
State and local law.'' 21 U.S.C. 823(a)(2). The ALJ stated: ``There is
neither evidence nor
[[Page 2124]]
contention that Respondent has not complied with applicable laws and I
therefore find that this factor weighs in favor of granting
Respondent's application.'' ALJ at 85. In view of this statement, it
must be repeated that at any hearing on an application to manufacture a
schedule I or II controlled substance, the applicant has the burden of
proving that the requirements for registration under 21 U.S.C. 823(a)
are satisfied. 21 CFR 1301.44(a). Moreover, the issue under the second
public interest factor is not merely whether an applicant has complied
in the past with applicable State and local law, but also whether the
applicant will do so if he becomes registered. Thus, it was imprecise
for the ALJ to suggest that the absence of evidence regarding past
compliance with applicable State and local law constitutes a favorable
showing on behalf of the applicant for purposes of the second public
interest factor. However, the record is not entirely silent with
respect to this factor. As the ALJ noted (ALJ at 57), and as Respondent
has emphasized (Resp. Prop. Findings at 57), Respondent did testify
that he met with ``state investigators'' who told him that ``a state
permit would depend on a federal permit being granted.'' Tr. 45. Given
that the Government did not contest this part of Respondent's
testimony, I will give Respondent the benefit of the doubt by inferring
that what he intended to convey was that Massachusetts state officials
indicated to him that he would be able to obtain a ``registration''
under Massachusetts law to manufacture marijuana if and when he were to
obtain a DEA registration to do so.\83\ I do so despite the fact that
Respondent did not indicate in his testimony or through the submission
of any documentary exhibits whether he had actually filed an
application with the state and submitted the appropriate fee for such
state registration. Thus, consistent with the ALJ's recommendation, I
find Respondent has put forth some evidence which (being unrefuted)
allows for a conclusion that his proposed activities would be in
compliance with State and local law.
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\83\ Analogous to federal law, Massachusetts law provides that
``every person who manufactures * * * any controlled substance
within the commonwealth shall upon payment of a fee, * * * register
with the commissioner of public health, in accordance with his
regulations, said registration to be effective for one year from the
date of issuance.'' Mass. Gen. Laws Ann. ch. 94C, Sec. 7(a) (West
2008). Massachusetts has adopted the CSA schedules of controlled
substances, making marijuana a schedule I controlled substance under
state law. See Mass. Gen. Laws Ann. ch. 94C, Sec. 2(a).
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The Government took exception, however, to the ALJ's recommendation
that this factor (paragraph 823(a)(2)) be weighed in favor of granting
Respondent's application. Gov. Exceptions at 12-13. The Government
argues that this factor ``is most often relevant'' in cases in which
practitioners have lost their state controlled substance authorization.
Id. at 13. Further, the Government contends, ``[w]hile the failure to
have a required state or local license would prove fatal to an
application, * * * an expectation by Respondent that the required state
license will ineluctably follow the granting of a DEA registration and
a promise to comply with state and local law in the future simply
renders this factor irrelevant and does not weigh in favor of either
party.'' Id. In response thereto, Respondent asserts that the lack of
evidence of noncompliance with state or local law should indeed support
a finding that this factor weighs in favor of registration.
Respondent's Resp. at 18-19.
It is certainly true, as both parties agree, that the evidence
relating to Respondent's proposed activities cannot be deemed as
weighing against the pubic interest for purposes of paragraph
823(a)(2). However, whether one characterizes the evidence relevant to
this factor as weighing in favor of granting Respondent's application
or simply neutral seems somewhat a matter of semantics. Given the
nature of the evidence here (Respondent's mere testimony that he
anticipates authorization from the state and that he promises to comply
with state law), I accept the characterization that the evidence is
favorable as to the second public interest factor, with the caveat that
this factor is of limited weight commensurate with the nature of the
evidence.
3. Public Interest Factor Three
The third public interest factor is ``promotion of technical
advances in the art of manufacturing these substances and the
development of new substances.'' 21 U.S.C. 823(a)(3). The ALJ found
that Respondent has ``considerable experience in cultivating medicinal
plants, which might promote technical advances in the cultivation of
marijuana or developing new medications from it.'' ALJ at 85-86. The
ALJ nonetheless found that ``there is not sufficient evidence in the
record on which to base a finding as to whether granting Respondent's
registration would promote technical advances.'' Id. at 86. When asked
by his own counsel how his registration would promote technical
advances, Respondent answered in a vague manner:
Well, I think there is two answers to that as far as I'm
concerned. One is that, yes, it would make an advance in the
understanding any possible clinical use of marijuana if we were able
to supply this to investigators to run trials, and, secondly, as
I've explained to DEA agents that visited, that we would learn more
about how the environment affects the constituents in the plant
material which would enable, if this does become at some stage down
the road here, becomes a useful drug, and that the manufacturer of
it has to be controlled under security conditions, they would know
the environment it needs to be grown under to produce a clinical
marijuana, medical marijuana.
Tr. at 75-76. In the first part of the above answer, it appears that
Respondent is simply accepting the word of his sponsor, Mr. Doblin,
that his obtaining a DEA registration would result in marijuana being
provided to researchers who would not otherwise obtain it. If so,
Respondent is relying on a false premise. As discussed at length above,
the evidence demonstrates that not one bona fide researcher within the
meaning of the CSA (i.e., one whose protocol has been determined by HHS
to be scientifically meritorious) has ever been denied marijuana \84\
and that, under the new procedures adopted by HHS in 1999, the
``scientific bar'' has been set relatively low, allowing marijuana to
be provided to 17 privately funded researchers. As for the second part
of his answer, in which Respondent attempted to explain how his
registration would result in learning ``more about how the environment
affects the constituents in the plant material,'' this explanation is
noticeably lacking in detail and without any discernable scientific
basis. By his own admission, Respondent is ``not experienced in growing
this plant (marijuana).'' Tr. at 40. In comparison, Dr. ElSohly, who
has been the principal investigator under the NIDA contract and has
overseen the National Center's work with marijuana since 1980
(employing a wide variety of
[[Page 2125]]
manufacturing techniques),\85\ has at least seven patents relating to
the manufacture and identification of marijuana and its derivatives,
and has authored numerous articles on these subjects that have been
published in scientific journals. Tr. 1136-38, 1331-36; GXs 65-71, 93.
Respondent's lack of experience in growing marijuana does not preclude
a finding under paragraph 823(a)(3) that his proposed activities would
promote technical advances in the art of manufacturing marijuana and
developing new substances. Nor does Respondent's lack of expertise in
this area compared to that of Dr. ElSohly preclude such a finding as it
is conceivable that a newcomer to a field could make scientific
discoveries that others have failed to make. However, Respondent's lack
of experience and expertise combined with the vagaries of his testimony
as to how he would promote technical advances in the art of
manufacturing marijuana and developing new substances do not support a
finding that he would do so. Thus, I concur with the ALJ's
recommendation as to this factor and conclude that Respondent has
failed to meet his burden of demonstrating that his proposed activities
would promote technical advances in the art of manufacturing marijuana
and developing new substances.
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\84\ Even with respect to Dr. Abrams--who MAPS seems to believe
was improperly denied marijuana in the pre-1999 era (before HHS
changed its policy for providing marijuana to researchers)--
Respondent produced no evidence that HHS's denial was lacking in
scientific basis. To the contrary, as indicated above, the evidence
indicates that NIDA initially denied Dr. Abrams' request based on
valid concerns about the design and scientific merit of his
protocol. See note 24, supra, and accompanying text. The record
further reflects that Dr. Abrams corrected these deficiencies to
NIDA's satisfaction upon submitting a revised protocol and, as a
result, received marijuana from NIDA in 1997; NIDA also supplied Dr.
Abrams with marijuana for subsequent studies. Id.
\85\ The National Center grows marijuana both indoors and
outdoors and has done so using conventional soil planting from seeds
and seedlings, as well as using hydroponics (without soil),
vegetative propagation (using cuttings to retain the genetic
identity of the ``mother plant''), and micropropagation (vegetative
propagation using a very small part of plant material rather than a
cutting). Tr. 1187-1263, 1328-30. It has also utilized a variety of
harvesting, drying, fertilization, and storage methods to affect the
THC content of the marijuana, to promote more effective rolling of
cigarettes, and to isolate certain cannabinoids. Id. It also has in
its inventory seeds from different parts of the world, which can
produce marijuana of various potencies. Id. Respondent did not
identify any cultivation, harvesting, or other manufacturing
techniques relating to marijuana in which the National Center lacks
expertise.
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4. Public Interest Factor Four
The fourth public interest factor is ``prior conviction record of
applicant under Federal and State laws relating to the manufacture,
distribution, or dispensing of such substances.'' 21 U.S.C. 823(a)(4).
I adopt the ALJ's recommended finding that it was ``undisputed that
Respondent has never been convicted of any violation of any law
pertaining to controlled substances'' and therefore this factor weighs
in favor of granting the application. I reject the Government's
contention that the historical and ongoing activities of Mr. Doblin and
MAPS relating to controlled substances (which the Government asserts
are improper but for which there is no evidence in the record of any
criminal convictions) should be considered under this factor.
5. Public Interest Factor Five
The fifth public interest factor is ``past experience in the
manufacture of controlled substances, and the existence in the
establishment of effective control against diversion.'' 21 U.S.C.
823(a)(5). Both parties and the ALJ agree that Respondent has no past
experience in the manufacture of controlled substances, and I so
find.\86\ Consideration of such experience serves two purposes. First,
the review of an applicant's track record provides substantial
information as to prior violations and the likelihood of its future
compliance with the Act and regulations. See ALRA Laboratories, Inc. v.
DEA, 54 F.3d 450, 452 (7th Cir. 1995) (``An agency rationally may
conclude that past performance is the best predictor of future
performance.''). Second, the experience factor recognizes that the
regulatory scheme is complex and that having effective controls against
diversion requires more than simply having a secure building and a
policy and procedures manual.\87\ Rather, having effective controls
requires that those controls be properly performed. Thus, Respondent's
lack of experience in the manufacture of controlled substances cannot
be dismissed as inconsequential.\88\ Indeed, there is agency precedent
for concluding, in appropriate circumstances, that lack of such
experience can be an independent basis for denial of registration.\89\
However, I find in this case that Respondent's lack of experience in
handling controlled substances--while a factor weighing against
granting his application--should not disqualify him from obtaining a
registration to bulk manufacture marijuana.
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\86\ While the ALJ correctly observed that Respondent has no
experience in the in the manufacture of controlled substances, she
stated that Respondent ``does have experience in growing medicinal
plants.'' ALJ at 86. It is unclear whether the ALJ was taking this
into account for purposes of factor 5, or simply noting it in
passing, because she ultimately recommended that I conclude ``there
is not sufficient evidence in the record on which to base a finding
as to whether granting Respondent's registration would promote
technical advances.'' Id. In any event, under the text of paragraph
823(a)(5), experience in the manufacture of anything other than
``controlled substances'' is immaterial for purposes of factor 5.
\87\ The CSA and DEA regulations impose a complex and
comprehensive scheme to protect against diversion. These include not
only requirements pertaining to the physical security of
manufacturing facilities, see 21 CFR 1301.73, and employee screening
procedures, id. 1301.90, but also extensive inventory, record
keeping, and reporting requirements. See 21 CFR 1304.04 (maintenance
of records and inventories); id. 1304.11 (inventory requirements);
1304.22(a) (records for manufacturers); 1304.33 (ARCOS reports);
1301.74(c) (reporting of theft).
\88\ Respondent notes the Government's argument that `` `[i]n no
case involving applications to handle controlled substances, has
`prior experience' with non-controlled substances ever been
considered as support for granting an application.' '' Respondent's
Resp. at 24. Respondent maintains that ``this argument is simply
wrong,'' and that ``[i]n Chattem Chemicals, Inc., 71 FR 9834, 9838
(2006) * * * the applicant had no prior experience in processing
opium alkaloids, the controlled substance for which it sought a
manufacturer's registration.'' Respondent's Resp. at 24-25. That
much is true. Respondent ignores, however, that Chattem already held
registrations to manufacture schedule II controlled substances
including morphine, codeine and oxycodone, and to import other
controlled substances. See 71 FR at 9836. In contrast to Respondent,
who has no relevant experience, Chattem had extensive experience in
the regulatory scheme and the effective implementation of controls
against diversion.
Respondent also notes Dr. ElSohly's testimony to the effect that
when the University of Mississippi first applied in 1968 for the
contract to grow marijuana for NIDA's predecessor, ``he lacked
experience and expertise in security measures relating to controlled
substances.'' Respondent Resp. at 27. Respondent ignores, however,
that the registration belongs to the University of Mississippi and
was issued to it 12 years before Dr. ElSohly took over the project
and under a different statutory scheme and further that Dr. ElSohly
had been working on the marijuana project for four years at the time
he succeeded his predecessor. See Tr. at 1131-32, 1152.
\89\ Cf. Stephen J. Heldman, 72 FR 4032, 4034 (2007) (noting
that even ``[w]ere there no evidence of Respondent having engaged in
illicit activity * * * his lack of experience bars his
registration'').
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As to whether there would be, within Respondent's establishment,
effective control against diversion,\90\ Respondent testified that,
although he ``did not have a full-blown plan when [he] applied for the
[DEA registration],'' when DEA personnel conducted an on-site
inspection of his premises, he assured them that he ``understood the
need for security'' and that they thought that his proposed room for
growing marijuana ``could be made secure with no problems.'' Tr. 44-45,
355-56. Respondent further testified that he
[[Page 2126]]
agreed to meet all DEA security requirements. Tr. 79. The Government
did not dispute these assertions. I therefore find that Respondent has
met his burden of demonstrating that, if the registration were granted,
he would have in place effective controls against diversion.\91\ In
sum, the evidence bearing on factor five weighs both in favor of and
against Respondent's application: it indicates that he has no past
experience in the manufacture of controlled substances but that he will
have in the establishment effective controls against diversion.
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\90\ As explained in part C of the discussion section, this
aspect of paragraph 823(a)(5) requires DEA to consider, among other
things, whether Respondent has demonstrated that he will have in
place appropriate physical security and employee screening as
required by the DEA regulations and as confirmed through a DEA on-
site inspection of the premises. Also as explained in part C, this
aspect of paragraph 823(a)(5)--which involves an evaluation of the
applicant's particular facility, proposed security measures, and
other controls against diversion to be implemented by the
applicant--is best viewed as being distinguished from the
requirement under paragraph 823(a)(1) that DEA maintain effective
controls against diversion ``by limiting the importation and bulk
manufacture of such controlled substances to a number of
establishments which can produce an adequate and uninterrupted
supply of these substances under adequately competitive
conditions.''
\91\ Because the DEA regulations require all registered
manufacturers of controlled substances to have certain control
measures in place at all times (21 CFR 1301.71-.74, .76), DEA may
not issue a certificate of registration to a new applicant until the
required security measures are actually in place.
Moreover, while I acknowledge that Respondent testified that he
would secure the growing area and meet ``appropriate security
conditions'' (Tr. 79), and I find it is highly unlikely that
Respondent would personally divert, this does not establish that the
risk of diversion is minimal. Respondent testified that he usually
does not go down to the greenhouse to water the plants but leaves
this task to a technician. Tr. at 254. Moreover, the graduate
students and technicians ``would probably do the transplanting'' and
the ``daily check on any environmental controls.'' Id. at 254-55.
Respondent's testimony begs the question of who would be supervising
these workers. Furthermore, while Respondent has promised to meet
appropriate security conditions, it is undisputed that he has no
experience in the manufacture of controlled substances and the
regulatory scheme. As he testified: ``I have no experience in the
control against diversion.'' Tr. 79.
Thus, my finding under factor five that Respondent would have in
place effective controls against diversion might be viewed as being
generous toward Respondent.
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6. Public Interest Factor Six
The sixth and final public interest factor is ``such other factors
as may be relevant to and consistent with the public health and
safety.'' 21 U.S.C. 823(a)(6). At the outset, it should be noted that,
because the text of this provision calls on me to consider ``such other
factors,'' I will not restate in the discussion of factor six the
evidence that I have already taken into account for purposes of the
first five public interest factors--even though such evidence might be
relevant to the determination of whether Respondent's proposed
registration would be consistent with the public health and safety.
The most notable evidence relevant to factor six is that relating
to Mr. Doblin.\92\ Before addressing this evidence, it needs to be made
clear that I consider irrelevant for purposes of this application
whether Mr. Doblin, in the expression of his political viewpoints,
supports the legalization of marijuana and other controlled substances.
I also consider irrelevant the political activities of the organization
he heads, MAPS. The expression of political viewpoints enjoys the
protection of the first amendment. However, it is certainly relevant
for purposes of factor six whether a person who might be in a position
to directly influence the activities of a registrant has engaged in
actual conduct involving controlled substances that fails to comply
with the federal or state law.
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\92\ By its terms, paragraph 823(a)(6) is not limited to conduct
on the part of the applicant. Rather, its broad wording indicates
that it is a catchall provision that calls on the agency to consider
``such other factors [not covered by factors (a)(1) through (a)(5)]
as may be relevant to and consistent with the public health and
safety.''
---------------------------------------------------------------------------
The evidence indicates that Mr. Doblin has been significantly
involved in Respondent's application process and plans to retain a key
role in Respondent's activities if the registration is granted. Mr.
Doblin came up with the idea of sponsoring an applicant for a DEA
registration who would be a supplier of marijuana other than NIDA, and
he selected Respondent to be that applicant. Tr. 210-12, 219. Mr.
Doblin assisted Respondent in filling out the application, supplied
answers to DEA's supplemental written questions, and agreed, on behalf
of MAPS, to ``cover all the costs'' associated with the registered
activities, including the costs of equipment, manufacturing, and
security installations. Tr. 221-22, 351-52; 383, 583; GX 3, at 1.
Respondent has agreed that Mr. Doblin, in his role as head of MAPS,
will take an active role in deciding to whom Respondent will supply the
marijuana. Tr. 224-26, 358-360. Respondent described the process of
applying for the DEA registration and the ``project of developing
marijuana'' as a ``joint effort'' by Mr. Doblin and himself. Tr. 390-
91. Indeed, Respondent testified that his ``understanding'' of his
``role,'' as well as that of Mr. Doblin, was that dictated to him by
Mr. Doblin.\93\ Id. at 358. Another part of Mr. Doblin's role would be
to ``route'' the ``investigators'' (those seeking marijuana for
research) to Respondent. Id. Mr. Doblin would also decide for
Respondent the ``strains'' of marijuana to produce and ``allocate'' the
marijuana produced in accordance with MAPS's priorities. Tr. 589.
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\93\ Further indication that MAPS is the driving force behind
this application is that, when asked to explain the meaning of one
of his written answers to the questions submitted by DEA as a follow
up to the application, Respondent admitted that he had ``no idea''
whether he was referring to Chemic when he answered that one of the
proposed recipients of the marijuana that he seeks to produce would
be an entity that would use ``marijuana delivered through a
vaporizer device.'' Tr. at 225-26. Nor did Respondent know if this
entity was authorized under the law to conduct such research or the
amount of marijuana that would be needed for this research. Id. at
229. Respondent said that such questions would have to be referred
to Mr. Doblin. Id. at 226. Respondent acknowledged that the only
entity he had in mind as a recipient of the marijuana he seeks to
grow was the researcher that would test the vaporizer. Tr. at 235.
---------------------------------------------------------------------------
In short, Mr. Doblin has mapped out and assisted in most acts, if
not every act, that Respondent has taken toward applying for a
registration to manufacture marijuana and, if the registration were
granted, Mr. Doblin would continue to maintain responsibility for
managing and monitoring the activities of the registrant. Given this
level of involvement by Mr. Doblin--and the passive, if not
subservient, nature of Respondent's involvement--it is appropriate
under factor six to consider the following conduct by Mr. Doblin
relating to controlled substances. First, Mr. Doblin admits that he
smokes marijuana for ``recreational use'' on a weekly basis. Tr. 716,
718-19. Thus, Mr. Doblin violates federal and state laws relating to
controlled substances on a weekly basis.\94\ This demonstrates that Mr.
Doblin has disregard for the controlled substances laws. It is simply
inconceivable that DEA would--consistent with its obligations under the
CSA--grant a registration to engage in certain activities involving
controlled substances where it is clear that a person who will have any
role in the oversight and management of such activities routinely
engages in the illegal use of controlled substances. It is still more
untenable where that person has the level of oversight and management
that Mr. Doblin would have--and where the controlled substance he
illegally uses is the very controlled substance the applicant seeks to
produce. Indeed, it is remarkable that Mr. Doblin would--given his
admitted illegal involvement in controlled substances--ask DEA to
effectively grant him permission to take on such a prominent role in
the manufacture of the most widely abused illegal controlled substance
in the United States.
---------------------------------------------------------------------------
\94\ 21 U.S.C. 844; Mass. Gen. Laws Ann. ch. 94C, Sec. 34 (West
2008). Mr. Doblin lives in Massachusetts. Tr. 472.
---------------------------------------------------------------------------
Respondent points to Mr. Doblin's testimony that MAPS has
previously sponsored research by DEA registrants involving schedule I
controlled substances other than marijuana. Respondent's Resp. at 23
(citing Tr. 482-491). Respondent characterizes such research as having
taken place ``all without a hint of * * * diversion.'' Id. at 23-24.
However, there is nothing in the record that confirms or refutes this
[[Page 2127]]
characterization; nor does the record indicate exactly what role Mr.
Doblin played in the prior MAPS-sponsored research.\95\ In any event,
even assuming that MAPS has previously sponsored DEA-registered
researchers without incident, this does not undo the legitimate
concerns that came to light in this proceeding about Mr. Doblin's
fitness for directing, at least in part, the activities of a DEA-
registered bulk manufacturer of marijuana, given Mr. Doblin's routine
illegal use of marijuana.
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\95\ Respondent does not appear to contend that DEA granted the
prior registrations to MAPS-sponsored researchers knowing that MAPS
was the sponsor with Mr. Doblin having the same level of involvement
that he seeks here, and he cites no part of the record for such a
proposition.
---------------------------------------------------------------------------
Thus, Mr. Doblin's ongoing illegal marijuana use, by itself (i.e.,
even putting aside the treaty considerations and Respondent's failure
to demonstrate inadequate supply or competition within the meaning of
paragraph 823(a)(1)), provides a sufficient independent basis upon
which DEA may deny the application.
Accordingly, based on a consideration of all six pubic interest
factors set forth in 21 U.S.C. 823(a), I conclude the Respondent has
failed to meet his burden of demonstrating that his proposed
registration is consistent with the public interest. To the contrary,
the evidence is compelling that the registration is inconsistent with
the public interest.
C. The Meaning of 21 U.S.C. 823(a)(1)
This section of the discussion contains a far more extensive
analysis of 21 U.S.C. 823(a)(1) (hereafter, ``paragraph 823(a)(1)'')
than DEA has previously published. As indicated above, for ease of
exposition, due to the length of this analysis, it is being presented
here as a separate section of the discussion rather than inserting it
directly into the above discussion of the public interest factors.
1. The Text of the Statute
The appropriate starting point for the analysis of any statute is
the text of the statute itself. The text of Sec. 823(a) remains the
same today as it was when the CSA was enacted by Congress in 1970. It
states:
(a) Manufacturers of controlled substances in schedule I or II
The Attorney General shall register an applicant to manufacture
controlled substances in schedule I or II if he determines that such
registration is consistent with the public interest and with United
States obligations under international treaties, conventions, or
protocols in effect on May 1, 1971. In determining the public
interest, the following factors shall be considered:
(1) Maintenance of effective controls against diversion of
particular controlled substances and any controlled substance in
schedule I or II compounded therefrom into other than legitimate
medical, scientific, research, or industrial channels, by limiting
the importation and bulk manufacture of such controlled substances
to a number of establishments which can produce an adequate and
uninterrupted supply of these substances under adequately
competitive conditions for legitimate medical, scientific, research,
and industrial purposes;
(2) Compliance with applicable State and local law;
(3) Promotion of technical advances in the art of manufacturing
these substances and the development of new substances;
(4) Prior conviction record of applicant under Federal and State
laws relating to the manufacture, distribution, or dispensing of
such substances;
(5) Past experience in the manufacture of controlled substances,
and the existence in the establishment of effective control against
diversion; and
(6) Such other factors as may be relevant to and consistent with
the public health and safety.
Thus, the statute allows DEA to register an applicant to bulk
manufacture a schedule I or II controlled substance only if the Deputy
Administrator \96\ determines that the proposed registration would be
consistent with both (i) the Single Convention and (ii) the public
interest. In determining whether the proposed registration is
consistent with the public interest, the statute requires DEA to
evaluate the above six factors. The first factor, set forth in 21
U.S.C. 823(a)(1) (referred to in this discussion as ``paragraph
823(a)(1)''), requires the Deputy Administrator to consider
``maintenance of effective controls against diversion * * * by limiting
the * * * bulk manufacture of such controlled substances to a number of
establishments which can produce an adequate and uninterrupted supply
of these substances under adequately competitive conditions for
legitimate medical, scientific, research, and industrial purposes.''
(Emphasis added.) Thus, Congress stated in paragraph 823(a)(1) that--in
order to maintain effective controls against diversion of a given
schedule I or II controlled substance--DEA must consider limiting the
number of registered bulk manufactures of the substance to that ``which
can produce an adequate and uninterrupted supply of these substances
under adequately competitive conditions.''
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\96\ Pursuant to 21 U.S.C. 871(a), functions vested in the
Attorney General by the CSA have been delegated to the Administrator
of DEA. 28 CFR 0.100(b). The function of issuing final orders
regarding applications for registration has been further delegated
to the Deputy Administrator. 28 CFR 0.104, appendix to subpart R,
sec. 7(a).
---------------------------------------------------------------------------
While the above-quoted text of paragraph 823(a)(1) is relatively
straightforward, consulting the dictionary helps to confirm the
meaning. The word ``limiting'' (or ``limit''), when used as a verb, is
defined as ``to assign certain limits to; prescribe,'' ``to restrict
the bounds or limits of,'' or ``to curtail or reduce in quantity or
extent.'' \97\ The word ``limit,'' when used as a noun, is defined as
``something that bounds, restrains or confines'' or ``the utmost
extent.'' \98\ Thus, the command under paragraph 823(a)(1) that DEA
consider ``limiting'' the number of registered bulk manufacturers of a
given schedule I or II controlled substance can be construed to mean
that the upper boundary on the number of such manufacturers is that
``which can produce an adequate and uninterrupted supply of these
substances under adequately competitive conditions for legitimate
medical, scientific, research, and industrial purposes.''
---------------------------------------------------------------------------
\97\ Merriam-Webster OnLine, http://www.merriam-webster.com/
dictionary (2008).
\98\ Id.
---------------------------------------------------------------------------
It is notable that, by requiring DEA to consider limiting the
number of bulk manufactures of a given schedule I controlled substance
to that ``which can produce an adequate and uninterrupted supply * * *
under adequately competitive conditions,'' paragraph 823(a)(1) does not
allow DEA simply to register as many bulk manufacturers of a given
schedule I or II controlled substance as the market will bear. Rather,
DEA is obligated under paragraph 823(a)(1) to consider disallowing
additional entrants into the schedule I and II bulk manufacturing
market unless DEA concludes that addition of a particular applicant is
necessary to produce ``an adequate and uninterrupted supply of [a given
substance] under adequately competitive conditions.''
This reading of paragraph 823(a)(1) is also consistent with the
overall structure of the CSA. The Act places each controlled substance
into one of five schedules based on: whether the substance has a
currently accepted medical use in the United States; the substance's
relative potential for abuse; and the extent to which abuse of the
substance may lead to psychological or physical dependence.\99\ As the
United States Supreme Court has stated, ``[t]he Act then imposes
restrictions on the
[[Page 2128]]
manufacturing and distribution of the substance according to the
schedule in which it has been placed.'' \100\ ``Schedule I,'' as the
Court observed, ``is the most restrictive schedule.'' This is
commensurate with the fact that schedule I controlled substances are
the only controlled substances with no currently accepted medical use
in treatment in the United States. Schedule II restrictions are the
next most restrictive (less restrictive than those for schedule I
controls but more restrictive than those for schedules III, IV, and
V)--commensurate with schedule II substances having the highest
potential for abuse of those controlled substances that have a
currently accepted medical use (those in schedules II through V).
---------------------------------------------------------------------------
\99\ 21 U.S.C. 812(b).
\100\ OCBC, 532 U.S. at 492 (2001).
---------------------------------------------------------------------------
Consistent with this basic CSA principle of applying greater
controls to the substances that are most subject to abuse and most
harmful when abused, the CSA is structured to apply certain critical
control provisions to schedule I and II substances but not to those in
schedules III, IV, and V. For example, the CSA imposes quota
restrictions and order form requirements for schedule I and II
controlled substances but not for those in schedules III, IV, and
V.\101\ Paragraph 823(a)(1) is another example of this principle. The
required consideration in paragraph 823(a)(1) of limiting the number of
bulk manufacturers of schedule I and II controlled substances (to that
which can produce an adequate and uninterrupted supply of a given
substance under adequately competitive conditions) is noticeably absent
from paragraph 823(d)(1), which governs the registration of
manufacturers of schedule III, IV, and V controlled substances. This
contrast between the presence of the ``limiting'' language in paragraph
823(a)(1) and its absence from paragraph 823(d)(1) underscores the
importance of this requirement--particularly in view of Congress's
overall scheme of placing the greatest restrictions on substances in
schedules I and II.
---------------------------------------------------------------------------
\101\ 21 U.S.C. 826 & 828.
---------------------------------------------------------------------------
Another consideration when interpreting the language of paragraph
823(a)(1) is a comparison of its terms with those of paragraph
823(a)(5). As indicated above, paragraph 823(a)(5) is one of the six
factors DEA must consider when evaluating an application for
registration to bulk manufacture a schedule I or II controlled
substance. Paragraph 823(a)(5) requires consideration of, among other
things, ``the existence in the establishment of effective control
against diversion.'' (Emphasis added.) The plain meaning of this
language is that the Deputy Administrator must evaluate whether the
particular facility in which the applicant proposes to manufacture the
schedule I or II controlled substance will have in place effective
safeguards to prevent diversion. This would include, among other
considerations, appropriate physical security and employee screening as
required by the DEA regulations \102\ as confirmed through a DEA on-
site inspection of the premises. That paragraph 823(a)(5) expressly
requires the Deputy Administrator to consider ``the existence in the
establishment of effective control against diversion'' is a further
indication that paragraph 823(a)(1) is not intended to cover precisely
the same consideration. To restate this interpretation somewhat,
whereas paragraph 823(a)(1) can be viewed as preventing diversion on a
registrant-wide scale (by directing the agency to consider limiting the
total number of registered bulk manufacturers and importers of schedule
I and II controlled based on the principle--discussed below--that fewer
registrants decreases the likelihood of diversion), paragraph 823(a)(5)
can be viewed as preventing diversion on an individual-registrant basis
(by directing the agency to consider whether the applicant will have in
place, in its particular establishment, effective controls against
diversion).\103\
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\102\ See 21 CFR 1301.71-1301.93.
\103\ As discussed below, some prior DEA final orders have
construed paragraph 823(a)(1) to require consideration of the
existence in the establishment of effective control against
diversion. While this factor must be considered in evaluating any
application for registration under Sec. 823(a), it is best
considered only for purposes of paragraph 823(a)(5) and not mingled
with the analysis under paragraph 823(a)(1).
---------------------------------------------------------------------------
In sum, for the preceding reasons, examining the text of paragraph
823(a)(1) can lead squarely to the conclusion that it requires DEA to
maintain effective controls against diversion by considering ``limiting
the * * * bulk manufacture of [schedule I and II] controlled substances
to a number of establishments which can produce an adequate and
uninterrupted supply of these substances under adequately competitive
conditions.''
2. Legislative History of the Statute
Congress derived paragraph 823(a)(1) from the Narcotics
Manufacturing Act of 1960 \104\ (which was superseded by the CSA in
1970). Under the 1960 Act, a person seeking to manufacture a basic
class of narcotic drugs was required to obtain a license from the
Secretary of the Treasury Department. Within the Treasury Department,
this function was delegated to the Commissioner of the Bureau of
Narcotics (a predecessor of DEA). Section 8 of the 1960 Act set forth
the criteria that the Commissioner was required to consider in
determining whether to issue a narcotics manufacturing license.
Paragraph (a)(1) of section 8 of the 1960 Act was the analog to
paragraph 823(a)(1) of the CSA. Paragraph (a)(1) provided that, in
determining whether to issue a license to an applicant seeking to
manufacture a basic class of narcotic drug, the Commissioner was
required to consider:
Maintenance of effective controls against the diversion of the
particular basic class of narcotic drug and of narcotic drugs
compounded therefrom into other than legitimate medical and
scientific channels through limitation of manufacture of the
particular basic class of narcotic drug to the smallest number of
establishments which will produce an adequate and uninterrupted
supply of narcotic drugs of or derived from such basis class of
narcotic drugs for medical and scientific purposes, consistent with
the public interest.
(Emphasis added.)
---------------------------------------------------------------------------
\104\ 74 Stat. 55 (1960).
---------------------------------------------------------------------------
As the italicized language above indicates, the 1960 Act reflected
the then-policy of the United States to limit the number of licensed
manufacturers ``to the smallest number of establishments which will
produce an adequate and uninterrupted supply''--without regard to
whether there was adequate competition. Plainly, there are both
similarities to and distinctions between this provision of the 1960 Act
and its counterpart in the CSA. The CSA carried forward the concept of
``limiting'' the number of registered manufacturers (with respect to
schedule I and II controlled substances). However, the CSA modified
this requirement by providing that this limitation on the number of
manufacturers be based not only on that which can produce ``an adequate
and uninterrupted supply,'' but also on that which provides for
``adequately competitive conditions.'' Put slightly differently, when
Congress enacted the CSA, it raised the ceiling on the number of
manufacturers from that which can produce ``an adequate and
uninterrupted supply'' to a consideration of that which can produce
``an adequate and uninterrupted supply * * * under adequately
competitive conditions.'' \105\ The policies underlying
[[Page 2129]]
this change in the law are summarized in the following exchange during
the Congressional hearings on the enactment of the CSA. The exchange
was between Senator Hruska (one of the co-sponsors of the various bills
that led up to the CSA) and then-Attorney General Mitchell:
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\105\ To be precise, the text of the CSA (in contrast to that of
the 1960 Act) does not unambiguously impose an absolute ceiling on
the number of registered manufacturers (that which can produce an
adequate and uninterrupted supply under adequately competitive
conditions). Rather, as indicated above, the text of the CSA
requires DEA to ``consider * * * limiting'' the number of
manufacturers to such a number (along with considering the other
public interest factors). It should also be noted that, whereas the
1960 Act referred to allowing only ``the smallest number of
establishments which will produce an adequate and uninterrupted
supply'' (emphasis added), the CSA does not contain the term
``smallest'' in paragraph 823(a)(1). Nonetheless, as explained
above, the use of the term ``limiting'' in paragraph 823(a)(1) can
be construed to mean that DEA, when evaluating an application under
Sec. 823(a), must consider keeping as the upper boundary on the
number of manufacturers that which can produce an adequate and
uninterrupted supply under adequately competitive conditions. In
other words, even though Congress when it enacted the CSA did not
carry forward from the 1960 Act the term ``smallest,'' because it
did carry forward the term ``limiting,'' it retained the concept of
an upper limit on the number of manufacturers as a factor to be
considered when evaluating an application for registration under
Sec. 823(a).
Senator Hruska: We have two national policies involved here. One
is the anticompetitive situation policy. The antitrust law is a very
well-established concept * * * . We also have another national
policy have we not, Mr. Attorney General? We have entered into a
global series of agreements in which we undertake in joint action
with other nations the business of controlling the manufacture and
distribution of the opiates and final derivatives of opium. Among
those agreements is this principle: That we urge upon nations to
keep the number of producers down to as low a point as possible to
facilitate and to make more certain their ability to control and
supervise the output and to keep it in normal and proper legal
channels. We have these two national policies involved here, have we
not?
Mr. Mitchell: Yes sir, you have both of them, and there is no
intention on the part of the Justice Department nor the Bureau of
Narcotics and Dangerous Drugs by this provision to expand beyond
necessity, and of course those are the key words, any manufacturers
in this particular area. We felt it was necessary to maintain the
protection of the consumer from the price structure point of view
and that is why the additional provisions have been added.\106\
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\106\ Hearings Before the Subcomm. to Investigate Juvenile
Delinquency of the Comm. on the Judiciary, United States Senate,
91st Cong. 261-262 (1969).
During that same hearing, the Department of Justice submitted in
writing its position regarding a proposed version of what would become
paragraph 823(a)(1). In that document, the Department of Justice stated
the following with respect to the then-pending proposal to deviate in
the CSA from the 1960 Act by adding the consideration of adequacy of
competition, and how the Department would carry out such proposal, if
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enacted:
There is no reason to assume that the Attorney General will
prejudice his primary objectives of effective control by excessive
licensing. Nor will he undertake direct price control. He will be
empowered to take cognizance of evidence showing that prices are
clearly and persistently excessive. The criteria for determining
whether prices far exceed that which is reasonable relate to
reasonable costs and reasonable profits. No explicit statement of
criteria is needed. If evidence indicates that additional licensing
will result in more reasonable prices with no significant diminution
in the effectiveness of drug control, the Attorney General should be
able to license the additional manufacturers.\107\
---------------------------------------------------------------------------
\107\ Id. at 372. Although this statement by the Department of
Justice was commenting on an earlier version of the bill, the
modified version of the bill that ultimately was enacted retained
the same principles as the earlier version under which the adequacy
of competition would become a consideration in determining whether
to grant applications to become registered to manufacture schedule I
or II controlled substances.
Consistent with the foregoing statements made during the Senate
hearings, a subsequent Senate report contained the following statement,
which echoes the language of what is now in paragraph 823(a)(1):
``[T]he Attorney General must limit the importation and manufacture of
schedules I and II substances to a number of establishments which can
produce an adequate and uninterrupted supply under adequately
competitive conditions for legitimate purposes.'' \108\
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\108\ Controlled Dangerous Substances Act of 1969: Report of the
Comm. on the Judiciary, United States Senate, 91st Cong. 7 (1969).
---------------------------------------------------------------------------
Thus, the legislative history reaffirms several principles already
evident from the text of paragraph 823(a)(1) and expands upon those
principles. The legislative history confirms that paragraph 823(a)(1)
indeed was designed to require the Attorney General to take into
account limiting the number of bulk manufacturers (and importers) of
schedule I and II controlled substances. However, this limit was not as
restrictive as under the law that preceded the CSA. Whereas under the
1960 Act, additional manufacturers could only be added if supply was
inadequate, the CSA added the consideration of adequacy of competition.
Nonetheless, as the legislative history reflects, Congress under the
CSA placed the burden on the applicant seeking to become registered to
bulk manufacture a schedule I or II controlled substance to put forth
evidence demonstrating either inadequate supply or inadequate
competition.
The legislative history also reflects the recognition by Congress
of a crucial principle underlying paragraph 823(a)(1): That the risk of
diversion tends to increase with each new registered bulk manufacturer
of a schedule I or II controlled substance. At the same time, the
language of paragraph 823(a)(1) reflects the determination by Congress
that--despite the increased risk of diversion resulting from the
addition of each new registered manufacturer--it is beneficial to the
public interest to allow the registration of additional manufacturers
where the Attorney General finds that doing so is necessary to produce
an adequate and uninterrupted supply of a given substance under
adequately competitive conditions.\109\
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\109\ As the statute states, an application for registration
under Sec. 823(a) may only be granted if DEA determines that such
registration is consistent with both the public interest and United
States obligations under the Single Convention. Thus, even if a
proposed registration were found by DEA to be consistent with the
public interest based on a consideration of the six public interest
factors of Sec. 823(a), the registration must be denied if DEA
finds it would be inconsistent with United States obligations under
the Single Convention.
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3. Treaty Considerations
The principle that limiting the number of producers of narcotics
and other schedule I and II controlled substances tends to promote more
effective control has long been a part of United States policy and
incorporated into the international drug control treaties to which the
United States has been a party and which predate the CSA. Under the
Single Convention, article 29 addresses the manufacture of narcotic
drugs. Paragraph 2(b) of article 29 requires parties to the treaty to
``[c]ontrol under license the establishment and premises in which such
manufacture may take place.'' With respect to this provision, the
Commentary to the Single Convention states: ``It is suggested that, in
order to facilitate control, the licensing system under subparagraph
(b) should be employed to ensure that the manufacture of drugs, their
salts and preparations is restricted to as small a number of
establishments and premises as is practicable.'' Commentary at 322
(emphasis added); see also id. at 319 (discussing how the concept of
limiting the number of manufacturers of narcotic drugs was inherent in
the international drug control treaties that preceded the Single
Convention).\110\ This is the same
[[Page 2130]]
principle as that referred to in the legislative history of the CSA (in
the above-quoted exchange between Senator Hruska and the then-Attorney
General).
---------------------------------------------------------------------------
\110\ Also illustrative of this point are the following
statements contained in a 1979 resolution issued by the United
Nations Commission on Narcotic Drugs, which DEA has cited in a prior
Federal Register publication: ``Recalling the relevant provisions of
the Single Convention * * * to limit cultivation, production,
manufacture and use of narcotic drugs to an amount required for
medical and scientific purposes * * *'' and ``Bearing in mind that
the treaties which establish this system are based on the concept
that the number of producers of narcotic materials for export should
be limited in order to facilitate effective control. * * *'' Cited
in 44 FR 33695 (1979) and available at http://daccessdds.un.org/doc/
RESOLUTION/GEN/NR0/638/29/IMG/NR063829.pdf?OpenElement.
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4. Pertinent Provision of the DEA Regulations
The only applications for registration for which the DEA
regulations require the agency to publish notice in the Federal
Register are those by persons seeking to bulk manufacture and import
schedule I and II controlled substances. 21 CFR 1301.33(a) &
1301.34(a). These are the applications governed by 21 U.S.C. 823(a). In
the cases of such applications, the regulations further require DEA to
mail (simultaneously with the publication in the Federal Register) a
copy of the Federal Register notice to each person registered as a bulk
manufacturer of the particular schedule I or II controlled substance
and to each person who has submitted a pending application therefor.
Id. Any such person may also file written comments or objections to the
proposed registration. Id.
That the regulations provide the foregoing procedures in the case
of applications filed pursuant to 21 U.S.C. 823(a)--and for no other
categories of applications--is indicative of the distinction between
the statutory factors for registration contained in subsection 823(a)
and those contained in all other subsections of Sec. 823. As explained
above in the discussion of the text of the statute, whereas paragraph
823(a)(1) requires DEA to consider limiting the number of registered
bulk manufacturers and importers of a given schedule I or II controlled
substance to that which can produce an adequate and uninterrupted
supply under adequately competitive conditions, this consideration
appears nowhere else in Sec. 823 (i.e., it is inapplicable to all
other applications for registration). Moreover, the consideration of
adequacy of supply and competition is the only factor that is unique to
subsection 823(a). It is therefore implicit that the notice-and-comment
provisions of the regulations listed above (those contained in 21 CFR
1301.33(a) and 1301.34(a)) are designed to effectuate the consideration
by DEA of adequacy of supply and competition. This implication is also
consistent with the view that, in addition to DEA and the applicant
itself, those registrants that constitute the existing suppliers (bulk
manufacturers) of a given schedule I or II controlled substance have
the requisite knowledge to comment on whether the existing market is
capable of producing an adequate and interrupted supply under
adequately competitive conditions.
Thus, the notice-and-comment provisions of 21 CFR 1301.33(a) and
1301.34(a) provide further support for interpreting paragraph 823(a)(1)
as requiring DEA to consider, for purposes of determining the public
interest, limiting the number of registered bulk manufacturers and
importers of schedule I and II controlled substances to that which can
produce an adequate and uninterrupted supply under adequately
competitive conditions.
Another provision of the regulations that warrants discussion is 21
CFR 1301.33(b), which states:
In order to provide adequate competition, the Administrator
shall not be required to limit the number of manufacturers in any
basic class to a number less than that consistent with maintenance
of effective controls against diversion solely because a smaller
number is capable of producing an adequate and uninterrupted supply.
Although this provision is somewhat awkwardly phrased, a careful
examination reveals that it is merely a corollary to paragraph
823(a)(1). In construing subsection 1301.33(b), it is important to bear
in mind that an agency regulation cannot deviate from any mandate
imposed by Congress under the statute that the regulation implements.
Thus, any reading of subsection 1301.33(b) must be consistent with
Congress's direction in paragraph 823(a)(1) that DEA consider limiting
the number of bulk manufacturers of schedule I and II controlled
substances to that which can produce an adequate and uninterrupted
supply under adequately competitive conditions.
With the foregoing principles in mind, subsection 1301.33(b) can be
broken down into its constituent elements for purposes of analysis as
follows:
[squarf] ``In order to provide adequate competition''; i.e., if it
has been determined under paragraph 823(a)(1) that granting a
particular applicant a registration to bulk manufacture a given
schedule I or II controlled substance is necessary to provide an
adequate and uninterrupted supply of that substance under adequately
competitive conditions,
[squarf] ``The Administrator shall not be required to limit the
number of manufacturers in any basic class to a number less than that
consistent with maintenance of effective controls against diversion'';
i.e., if granting the applicant's registration (based on a finding of
inadequate competition) will bring the total number of registered bulk
manufacturers of a given schedule I or II controlled substance to a
number which remains consistent with maintenance of effective controls
against diversion, DEA is not obligated to keep the total less than
that number,
[squarf] ``Solely because a smaller number is capable of producing
an adequate and uninterrupted supply''; i.e., based solely on the fact
that the existing number of manufacturers already produces an adequate
and uninterrupted supply (but under inadequately competitive
conditions).
Viewing these elements together, it is apparent that subsection
1301.33(b) merely states what are direct outgrowths of 21 U.S.C.
823(a)(1):
(1) That the existence of an adequate and uninterrupted supply of a
given schedule I or II controlled substance is not a sufficient basis
to deny an application by a person seeking to become an additional
manufacturer of that substance (since inadequate competition may
provide an independent basis for registration under paragraph
823(a)(1)) and
(2) That DEA need not keep the number of registered bulk
manufacturers to a number below that which is consistent with
maintenance of effective controls against diversion where adding an
additional manufacturer is necessary to provide for adequate
competition.
Thus, 21 CFR 1301.33(b) can be reconciled with the statutory text
(paragraph 823(a)(1))--as must be the case for the regulation to be
valid.\111\
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\111\ It is unclear why subsection 1301.33(b) was written in the
manner that it was. Given that the regulation was promulgated
shortly after the enactment of the CSA in 1970, it is possible that
it was written to emphasize how paragraph 823(a)(1) represented a
departure from the provision it superseded in the 1960 Narcotic
Manufacturing Act. As explained above, the 1960 Act limited the
number of licensed manufacturers ``to the smallest number of
establishments which will produce an adequate and uninterrupted
supply''--without regard to whether there was adequate competition.
In contrast, when Congress enacted the CSA, it raised the ceiling on
the number manufacturers to that which can produce an adequate and
uninterrupted supply under adequately competitive conditions.
Subsection 1301.33(b) seems to emphasize this distinction between
the 1960 Act and the CSA by pointing out that, under the latter, DEA
may not deny an application based solely on the existence of an
adequate and uninterrupted supply.
In 2004, the Department of Justice provided Congress with an
explanation of subsection 1301.33(b) that is consistent with the
explanation provided in the text above. See Marijuana and Medicine:
The Need for a Science-Based Approach: Hearing Before the Subcomm.
on Criminal Justice, Drug Policy and Human Resources, 108th Cong.
208 (2004) (letter from Assistant Attorney General William Moschella
to Subcomm. Chairman Rep. Souder) (``The meaning of [21 CFR
1301.33(b)] can be restated as follows: If DEA determines there is
inadequate economic competition among the existing manufacturers of
the particular controlled substance that the applicant seeks to
produce (e.g., substantial overcharging by the existing
manufacturers due to an insufficient number of competing
manufacturers of that controlled substance), and provided further
that granting the applicant's registration (and thereby increasing
the total number of manufacturers) is consistent with maintenance of
effective controls against diversion, DEA is not required to deny
the application solely because the number of manufacturers currently
registered can adequately supply the market for that controlled
substance in terms of quantity and quality of product.'') (emphasis
in original).
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[[Page 2131]]
5. Prior DEA Statements Regarding the Meaning of Paragraph 823(a)(1)
As discussed above, I now conclude that the text of paragraph
823(a)(1) indicates a directive, which is confirmed by the legislative
history, that the agency consider limiting the number of registered
bulk manufacturers and importers of controlled substances in schedules
I and II to that which can produce an adequate and uninterrupted supply
under adequately competitive conditions. Yet, in various final orders
and other statements issued by DEA over the years, the agency has at
times followed this approach and at other times failed to do so.
For example, in Roxane Laboratories, Inc., 63 FR 55891 (1998), the
agency applied paragraph 823(a)(1) consistent with the interpretation
that requires the applicant to demonstrate that the existing
manufacturer of the controlled substance in question is unable to
provide an adequate and uninterrupted supply of the substance under
adequately competitive conditions. Roxane Laboratories, Inc. (Roxane)
was a company that applied to become registered to import cocaine
hydrochloride, a schedule II controlled substance, for use in
pharmaceutical products. As Sec. 823(a) states, both an application to
import a schedule I or II controlled substance and an application to
bulk manufacture such a substance must be evaluated under the same
criteria set forth in Sec. 823(a).\112\ Thus, in Roxane, the Acting
Deputy Administrator had to evaluate whether the proposed registration
was consistent with the public interest in view of the six public
interest factors of Sec. 823(a), including paragraph 823(a)(1).
---------------------------------------------------------------------------
\112\ See also 21 U.S.C. 958(a) (a registration to import a
schedule I or II controlled substance must be consistent with the
public interest, based on consideration of the six criteria of Sec.
823(a)). Further, 21 U.S.C. 952(a)(2)(B) requires a person seeking
to become registered to import a schedule I or II controlled
substance to demonstrate not only that competition among domestic
manufacturers of the particular substance is inadequate but also
that competition ``will not be rendered adequate by the registration
of additional [domestic] manufacturers under section 823.'' Thus, an
applicant to import a schedule I or II substance must make an
additional showing beyond that required for an applicant to bulk
manufacture such a substance. However, as Sec. 823(a) indicates,
both the applicant seeking to import and the applicant seeking to
bulk manufacture are subject to the same 823(a) criteria, including
the same determination under paragraph 823(a)(1) regarding the
adequacy of competition.
---------------------------------------------------------------------------
Consistent with the interpretation of paragraph 823(a)(1) under
which the adequacy of supply and competition must be considered, the
parties in Roxane presented extensive evidence as to whether there was
adequate competition within the meaning of the statute.\113\ Toward
that end, much of the testimony and other evidence introduced in the
proceedings focused on the historical and prevailing prices for bulk
cocaine hydrochloride charged by what was then the only registered
importer of that substance. In addition to presenting factual evidence
regarding such prices, each side presented its own economic expert to
testify whether, in view of the prices, competition in the market was
adequate within the meaning of paragraph 823(a)(1).\114\ Ultimately,
the Acting Deputy Administrator found that the applicant had met its
burden under paragraph 823(a)(1) of demonstrating that competition was
inadequate and, in view of all the applicable statutory factors,
granted Roxane's application to become registered as an importer of
cocaine hydrochloride.
---------------------------------------------------------------------------
\113\ That the existing supply of cocaine hydrochloride was
adequate within the meaning of paragraph 823(a)(1) was not in
dispute in Roxane.
\114\ As indicated above, because Roxane involved an application
to import a schedule II controlled substance, the applicant was
required demonstrate that competition was inadequate not only within
the meaning of paragraph 823(a)(1), but also within the meaning of
21 U.S.C. 952(a)(2)(B). As to the latter, the DEA regulations
require consideration of the factors set forth in 21 CFR 1301.34(d).
These factors are specifically designed to assess competition in the
context of an import application. However, as Sec. 823(a)
indicates, an application to import a schedule I or II controlled
substance must also be evaluated under paragraph 823(a)(1) regarding
the adequacy of competition.
---------------------------------------------------------------------------
Four years later, in Johnson Matthey, Inc., 67 FR 39041 (2002), DEA
again addressed the paragraph 823(a)(1) issue. As in Roxane, Johnson
Matthey had applied to become registered as, among other things, an
importer of schedule II controlled substances. Thus, as in Roxane, one
of the central issues in Johnson Matthey was whether granting the
application was necessary to provide adequate competition within the
meaning of paragraph 823(a)(1).\115\ The application was opposed by two
firms that were already registered as importers of the same substances
that Johnson Matthey sought to import. These competing firms contended
at the administrative hearing that they maintained an adequate and
uninterrupted supply of the substances under adequately competitive
conditions. The two firms therefore objected to the proposed
registration under paragraph 823(a)(1), among other grounds.
---------------------------------------------------------------------------
\115\ As Johnson Matthey had applied to import narcotic raw
materials, the application also had to be evaluated under 21 U.S.C.
952(a)(1).
---------------------------------------------------------------------------
The final order in Johnson Matthey contains no description of the
evidence presented by the parties during the administrative hearing on
the competition issue as the final order expressly declared such
evidence to be irrelevant. Nor does the Johnson Matthey final order
contain a recitation of the text of paragraph 823(a)(1) or an
independent analysis of the statutory text. Instead, the Johnson
Matthey final order simply adopted a proposed rule that was published
18 years earlier by DEA and subsequently withdrawn by the agency. In
that subsequently withdrawn 1974 proposed rule (39 FR 12138 (1974)),
DEA proposed to revise its regulations to state that, during an
administrative hearing on an application to manufacture a controlled
substance in schedule I or II, if the ALJ determines that the
registration would be consistent with maintenance of effective controls
against diversion, he shall exclude as irrelevant evidence bearing on
whether existing manufacturers are capable of producing an adequate and
uninterrupted supply under adequately competitive conditions.
The Johnson Matthey final order failed to state that, two months
after DEA published the aforementioned proposed rule in 1974, the
agency published a notice in the Federal Register that three firms
(which were then registered bulk manufacturers under Sec. 823(a))
filed objections to, and requested a hearing on, the proposed rule,
asserting that ``the Controlled Substances Act requires a finding
respecting the adequacy of competition prior to registering any person
to engage in the bulk manufacture of a schedule I or II substance.'' 39
FR 20382 (1974). These objections that were submitted in response to
the 1974 proposed rule reflect precisely the same conclusion regarding
the meaning of paragraph 823(a)(1) that I find--for the reasons
discussed above--to be most
[[Page 2132]]
reconcilable with the text of the statute. That DEA withdrew the 1974
proposed rule a month after publishing these objections (39 FR 26031
(1974)) is consistent with the conclusion that the proposed rule could
not be firmly reconciled with the statute.\116\
---------------------------------------------------------------------------
\116\ The notice of withdrawal of the proposed rule stated that
DEA was in the midst of reviewing and revising all the agency
regulations in their entirety and that the proposed amendments
regarding the competition issue ``are withdrawn so that all proposed
changes to the regulations may be published together.'' However, DEA
never again proposed to amend its regulations to eliminate the
consideration--that paragraph 823(a)(1) mandates--of adequacy of
supply and competition.
---------------------------------------------------------------------------
Thus, the Johnson Matthey final order appears to have been flawed
both procedurally (by relying entirely upon a proposed rule that was
withdrawn) and substantively (by relying on an interpretation of
paragraph 823(a)(1) that is, in my view, difficult to reconcile with
the statutory text). Nonetheless, it must be recognized that the
Johnson Matthey final order was upheld on appeal in Noramco v. DEA, 375
F.3d 1148 (D.C. Cir. 2004). Examining the Noramco decision is therefore
warranted. Before doing so, however, it is necessary to review another
DEA final order that was issued shortly after Johnson Matthey.
In Penick Corporation Inc., 68 FR 6947 (2003), DEA evaluated the
paragraph 823(a)(1) issue in a different manner than it had done eight
months earlier in the Johnson Matthey final order. As in Roxane and
Johnson Matthey, Penick had applied with DEA to become registered as,
among other things, an importer of schedule II controlled substances.
Also as in Roxane and Johnson Matthey, the applicant's competitors (who
were already in the market as registered importers of the same
substances) objected to the proposed registration contending, among
other things, that the applicant had failed to demonstrate the
existence of inadequate competition within the meaning of paragraph
823(a)(1). However, in contrast to the Johnson Matthey final order, the
Penick final order did not disregard the competition issue as
irrelevant. Nor did the Penick final order mention the 1974 proposed
rule (that was subsequently withdrawn), which was relied upon in
Johnson Matthey. Rather, the Penick final order did examine the
evidence presented on the competition issue and ultimately concluded:
``Having found that the market is not adequately competitive, the
Deputy Administrator concludes that this factor weighs in favor of
granting Penick's application, even though Noramco and Mallinckrodt are
capable of maintaining an adequate and uninterrupted supply.'' \117\
The Penick final order did not address the Johnson Matthey final order
or why the two final orders took a differing approach as to the
competition issue.
---------------------------------------------------------------------------
\117\ 68 FR at 6950.
---------------------------------------------------------------------------
Both the Johnson Matthey final order and the Penick final order
were challenged by a competitor (Noramco) in Noramco v. DEA. The United
States Court of Appeals for the D.C. Circuit consolidated Noramco's two
petitions for review into one appellate proceeding. With respect to the
Johnson Matthey final order, Noramco contended that DEA erred by
failing to consider the adequacy of competition and limit the number of
importers to that which can produce an adequate and uninterrupted
supply under adequately competitive conditions as paragraph 823(a)(1)
requires. The D.C. Circuit panel reviewed DEA's decision ``under the
familiar two-step Chevron framework.'' \118\ Under this framework, if
the reviewing court finds that the statute does not directly address
``the precise question at issue'' (step one), the court must sustain
the agency's interpretation if it is ``based on a permissible
construction of the statute'' (step two).\119\ The court of appeals in
Noramco upheld the Johnson Matthey final order, under Chevron step two,
finding that DEA's decision to disregard competition to be a
``permissible interpretation'' of paragraph 823(a)(1).\120\
Simultaneously, the court of appeals in Noramco upheld the Penick final
order after reciting how DEA did consider the competition issue as
paragraph 823(a)(1) directs. That the final orders in Johnson Matthey
and Penick were inconsistent with one another as to the interpretation
of paragraph 823(a)(1) was rejected by the court of appeals as a basis
for reversal.\121\
---------------------------------------------------------------------------
\118\ 375 F.3d at 1152 (citing Chevron U.S.A, Inc. v. Natural
Res. Def. Council, 467 U.S. 837, 842-43 (1983)).
\119\ Id.
\120\ 375 F.3d at 1153.
\121\ 375 F.3d at 1157 n.8.
---------------------------------------------------------------------------
It is especially important to note here that, under Chevron step
two, ``[t]he court need not conclude that the agency construction was
the only one it permissibly could have adopted to uphold the
construction, or even the reading the court would have reached if the
question initially had arisen in a judicial proceeding.'' \122\
Accordingly, when the court in Noramco upheld the final order in
Johnson Matthey, it was not offering an opinion whether that final
order had interpreted paragraph 823(a)(1) in the best manner; rather,
the court was merely stating that DEA (being owed the measure of
Chevron deference accorded to an agency that administers a statute) had
put forth a ``permissible interpretation'' of the statute. This point
is underscored by the fact that the court in Noramco also upheld the
Penick final order, which interpreted paragraph 823(a)(1) in a notably
different manner than did the Johnson Matthey final order.
---------------------------------------------------------------------------
\122\ 467 U.S. at 843 n.11.
---------------------------------------------------------------------------
Thus, nothing in the Noramco decision constrains DEA from
concluding, as I now do, that the most sound reading of the text of
paragraph 823(a)(1) is that which requires the agency to consider
limiting the number of bulk manufacturers and importers of schedule I
and II controlled substances to that which can produce an adequate and
uninterrupted supply of a given substance under adequately competitive
conditions.
In 2006, another final order was issued involving the competition
issue. In Chattem Chemicals, Inc., 71 FR 9834 (2006), petition for
review denied, Penick Corp., Inc. v. DEA, 491 F3d 483 (D.C. Cir. 2007),
the applicant sought to become registered to import a schedule II
controlled substance, just as Roxane, Johnson Matthey, and Penick had
previously done. In the final order, which I issued, I followed the
Johnson Matthey approach of declining to consider the adequacy of
competition or supply. In doing so, I expressly noted that this
approach had been ``approved by the appellate court in Noramco.'' \123\
Upon review of the Chattem final order, the court of appeals likewise
reaffirmed that, under Noramco, this approach of not considering
adequacy of competition was a permissible reading of the statute.
Penick, 491 F.3d at 491 n.11. However, for the reasons discussed at
length above, I now believe that this approach--though deemed
permissible upon Chevron review--must be rejected in favor of that
which more accurately follows the text of the statute; i.e., the
approach that was taken in Roxane and Penick of considering limiting
the number of bulk manufacturers and importers of a given schedule I or
II controlled substance to that which can produce an adequate and
uninterrupted supply under adequately competitive conditions.\124\ In
addition
[[Page 2133]]
to finding this interpretation to be that which most closely mirrors
the text of the statute, I believe that, upon consideration of the
legislative history and treaty considerations discussed above, this
interpretation most effectively achieves the principles underlying the
statutory text: Balancing the overarching goal of preventing the United
States from being a source of domestic and international diversion by
limiting the number of bulk manufacturers of schedule I and II
controlled substances with the desire to ensure a level of competition
adequate to prevent legitimate purchasers of these substances from
being charged unreasonable prices.\125\ The alternative interpretation,
though found to be permissible, does not give full effect to these
principles and provides no mechanism to prevent the proliferation of
bulk suppliers of schedule I and II controlled substances beyond that
necessary to adequately supply the legitimate United States demand for
these materials under adequately competitive conditions. It is
axiomatic that the proliferation of suppliers of bulk schedule I and II
controlled substances heightens the risk of oversupply, which in turn
increases the risk of diversion. The alternative interpretation,
therefore, does not effectuate the statute and its underlying purposes
as well as the interpretation followed in this final order.
---------------------------------------------------------------------------
\123\ 71 FR at 9838.
\124\ While it is certainly preferable that an agency interpret
a statutory provision that it administers in a consistent manner
throughout the agency's existence, the head of an agency ``is not
estopped from changing a view she believes to have been grounded
upon a mistaken legal interpretation.'' See Thomas Jefferson
University v. Shalala, 512 U.S. 504, 517 (1994); cf. Chevron, 467
U.S. at 863 (``The fact that the agency has from time to time
changed its interpretation of [a statutory provision] does not * * *
lead us to conclude that no deference should be accorded the
agency's interpretation of the statute.'').
\125\ DEA has never invoked the ``limiting'' language of
paragraph 823(a)(1) as a basis to revoke the registration of an
existing bulk manufacturer that is currently utilizing its
registration to supply the market for a given schedule I or II
controlled substance, and this final order should not be construed
as suggesting a departure from such practice.
---------------------------------------------------------------------------
D. Summary of the Discussion
For the reasons indicated above, I have determined that
Respondent's proposed registration is inconsistent with United States
obligations under the Single Convention and with the public interest
based on a consideration of the factors set forth in 21 U.S.C. 823(a).
With respect to the Single Convention, Respondent's desire to become
registered in order to achieve MAPS's goal of ending the Federal
Government's monopoly on the wholesale distribution of marijuana cannot
be squared with the requirement under the Convention that there be
precisely such a monopoly. With respect to the public interest,
Respondent's failure to demonstrate that the longstanding existing
system in the United States of producing and distributing research-
grade marijuana under the oversight of HHS and NIDA is inadequate
within the meaning of 21 U.S.C. 823(a)(1) weighs heavily against
granting his application. Also with respect to the public interest, the
admitted conduct relating to controlled substances of Respondent's
sponsor, Mr. Doblin (in particular, Mr. Doblin's past and ongoing
conduct relating to marijuana) is unacceptable for anyone seeking to
have a prominent role in overseeing the controlled substance activities
of a DEA registrant--especially where the registrant's proposed
activities are the manufacture and distribution of the very drug
marijuana. In sum, there are three independent grounds, any of which,
standing alone, provide a sufficient (indeed, compelling) legal basis
for denying Respondent's application.
Order
Pursuant to the authority vested in me by 21 U.S.C. 823(a), as well
as 28 CFR 0.100(b) & 0.104, appendix to subpart R, sec. 7(a), I order
that the application of Lyle E. Craker, Ph.D., for a DEA certificate of
registration as a manufacturer of marijuana be, and hereby is, denied.
This order is effective February 13, 2009.
Dated: January 7, 2009.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E9-521 Filed 1-13-09; 8:45 am]
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