The DEA Announce 25% Reduction to Opioid Controlled Substances Aggregate Production Quota for 2017; Invistics' Quota Management Software Solution Can Help.

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With the DEA's announcement to reduce Opioid quota by at least 25% across the board, the Flowlytics® Quota Management suite can help companies calculate and prepare Quota requests, track Quota inventory electronically, and streamline ARCOS and Year-End reporting.

Flowlytics Quota Management Suite

United States Drug Enforcement Administration (DEA) dramatically decreased the amount of Schedule II opiate and opioid drugs that may be manufactured in 2017. Almost all of the reductions were 25% or more, with 33% reduction to hydrocodone.

Yesterday, the United States Drug Enforcement Administration (DEA) dramatically decreased the amount of Schedule II opiate and opioid drugs that may be manufactured in 2017. Almost all of the reductions were 25% or more, with 33% reduction to hydrocodone.

The DEA’s 2017 Aggregate Production Quota (APQ) is the total amount of a Controlled Substance necessary to meet the estimated medical, scientific, research, industrial, and export needs for the year as well as the maintenance of reserve stocks. DEA establishes APQs for more than 250 Schedule I and II controlled substances annually. The 2017 APQ has been reduced for oxycodone, hydrocodone, fentanyl, hydromorphone, morphine, and other such medications.

In announcing these reductions, the DEA cited data showing demand for these opioid medicines has reduced, and stated that much of the reduction is due to the elimination of a 25 percent buffer that had been previously added to the APQ in 2013 and extended through 2016 to guard against shortages.

After the aggregate quota is set, DEA allocates individual manufacturing and procurement quotas to those companies that apply for it. What does this mean for pharmaceutical companies who manufacture Schedule II controlled substances?

1.) Expect pharmaceutical company’s quotas to drop significantly in 2017. With the aggregate quota dropping 25% or more, the average company’s procurement quota will also drop by 25% or more. A company’s quota may be cut to the point where it will not meet its 2017 revenue/sales forecasts.

2.) Review Quota Management Processes now. Pharma companies and their competitors will be competing for a shrinking aggregate quota in 2017. Timely, accurate quota requests that are aligned with DEA review policies and calculations are critical to success.

3.) Companies should plan to track quota even more carefully in 2017 than in the past, so that they can properly document and request supplemental quota requests when needed as soon as possible in 2017. Supplemental quota can be requested mid-year as quota is consumed for product development needs, production losses, and changes in inventory levels.

4.) Review and confirm the accuracy of controlled substance inventory tracking systems. With tighter quotas, each gram across the supply chain will be more precious. Any delays in compiling inventory records will mean delays in quota tracking and supplemental quota requests.

5.) Look for ways to increase inventory turns for Schedule II controlled substances. Increasing turns will help in two ways: First, the reduction in inventory will lead to a corresponding one-time increase in revenue/sales. Second, the DEA formulas for procurement grants will INCREASE a company's 2018 procurement quota by the reduction of inventory in 2017.

6.) Look for ways to streamline and accelerate DEA reporting. For example, companies that are still using paper or spreadsheets to track Controlled Substance inventory should invest in software systems that prepare automated reports to the DEA’s Automation of Reports and Consolidated Orders System (ARCOS). This investment allows companies to convert from quarterly ARCOS submissions to monthly ARCOS submissions, thereby strengthening the data DEA will use to approve mid-year supplemental quota requests during 2017.

Invistics provides software solutions for strengthening the Quota Management Processes. This includes:

  • Quota Calculations & Requests – to prepare quota requests that are timely, accurate, well documented, and aligned with DEA review policies.
  • Quota Tracking – to ensure accurate and “readily retrievable” records, and to track every gram across the supply chain.
  • Quota Reporting – to streamline the preparation of DEA reports such as Automation of Reports and Consolidated Orders System (ARCOS) and the year End Reporting System (YERS).

Please contact us to learn more about our Quota Management software solutions.

About Invistics
Invistics provides software solutions and supporting consulting services that enable controlled substance registrations to track their inventory electronically with electronic data records, real-time dashboards, and smart reporting. The software comes with the support from IMS Health, a business partner, and leader in the world of controlled substance consulting.

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