Larry A. Watts 
We often receive questions from ketamine clinics regarding who needs DEA registration to dispense controlled substances. There are two candidates to consider – the health care providers who work at the clinic and the clinic itself. Often there is a misconception as to whether a clinic should hold a DEA registration. We wrote about this briefly previously and also about a specific DEA record exception. But today, we are discussing DEA enrollment requirements in more detail.
Who must hold a DEA registration?
The general rule for who should hold a DEA registration is set forth in the Federal Code of Federal Regulations (CFR), which provides the following:
Any person who manufactures, distributes, distributes, imports or exports a controlled substance or who proposes to engage in the manufacture, distribution, distribution, import or export of any controlled substance must obtain registration unless be exempted by law or pursuant to [21 CFR] §§ 1301.22 to 1301.26. Except as provided in paragraph (b) of this section, only persons actually engaged in such activities are required to obtain registration; related or affiliated persons who are not engaged in such activities are not required to be registered. (For example, a shareholder or parent company of a company manufacturing controlled substances is not required to obtain registration.)” 21 CFR 1301.11(a).
The operative question is who manufactures, distributes, dispenses, imports or exports ketamine for a ketamine clinic? This can include a lot of people! Some components can be quickly eliminated for most ketamine clinics, including manufacturing, importing, or exporting ketamine. These functions are generally left to other entities, not the ketamine clinic or the healthcare providers who prescribe and dispense the ketamine itself.
However, like most things under the law, the answers are not always so obvious. Thus, an examination of certain definitions makes it possible to analyze these questions. Important definitions include:
- “Distribute” which means to deliver “a controlled substance to the end user”. 21 U.S.C. 802(10).
- In turn, an “end user” “means a person who legally obtained and possesses a controlled substance for their own use or for the use of a member of their household…”. 21 U.S.C. 802(27)).
- A “dispenser” is “an individual practitioner, institutional practitioner, pharmacy or pharmacist who dispenses a controlled substance”. 21 CFR § 1300.01(b)(11).
- An “Individual Practitioner” is defined as “a physician, dentist, veterinarian, or other person licensed, registered, or otherwise authorized, by the United States or the jurisdiction in which they practice, to dispense a controlled substance during the course of professional, but does not include a pharmacist, pharmacy or residential practitioner. 21 CFR § 1300.01(b)(17).
- An “institutional practitioner” is defined as an authorized or registered hospital. 21 CFR § 1300.01(b)(18).
Applying the above to health care providers shows why such providers must hold a DEA registration. A health care provider “dispenses” ketamine to the “end user” which is the patient. In addition, a revision of the other definitions stated above is often necessary.
Do ketamine clinics need to hold DEA registration?
Unlike health care providers, most clinics do not require separate DEA registrations. Instead, these clinics can rely on their health care provider’s DEA registration (if, among other things, health care providers register the location of each clinic or office with the DEA).
The reasons why a ketamine clinic does not need to hold a DEA registration requires the same analysis as described above. A ketamine clinic does not “dispense” ketamine to the “end user” – only a supplier can dispense medication to a patient. While the clinic and its employees can order controlled substances and help ensure that the health care provider complies with all DEA laws and regulations, the clinic cannot then dispense the drug to the patient.
Although the ketamine clinic may be able to register with the DEA, it is often not necessary to do so.
The InterDent Case records and AEDs
We were only able to find one case to define these requirements, Kim vs. Interdent, Inc.2010 WL 3155011 (ND Ca. 2010) (the “InterDentcase). InterDent was a managed services organization (MSO) that worked with professional companies (PCs) owned by dentists. In the InterDent decision, “The plaintiff alleges that InterDent had to be registered under the [Controlled Substances Act], that InterDent failed to provide effective controls and procedures, and that Dr. Bae was among the class of people the regulations were meant to protect. The court in InterDent performed the same analysis described above to determine that InterDent did not need to be registered with the DEA.
Another question raised in the InterDent decision was whether InterDent was involved in the distribution of a controlled substance. The court noted:
The [Controlled Substances Act] states that “distribute” means to deliver (other than by administration or distribution) a controlled substance or listed chemical. The term “distributor” means a person who thus delivers a controlled substance or a listed chemical. 21 USC § 802(11). “Delivering,” in turn, is defined as “the actual, constructive, or attempted transfer of a controlled substance or scheduled chemical, whether or not an agency relationship exists.” 21 USC § 802(8). Here, InterDent employees placed orders and paid for controlled substances on behalf of Dr. Bae and other licensed dentists, for use in the dental practice. However, the registration requirement is waived “for any agent or employee of a person who is registered to carry on a group of self-employed activities, if that agent or employee is acting in the ordinary course of his business or employment” . 21 CFR § 1301.22(a). Under the Dental Group Management Agreement between InterDent and PCs, InterDent “serves[s] as a purchasing agent for [PCs]and does not have dental licenses or certificates. [….] Thus, pursuant to the terms of the management agreements and 20 CFR § 1301.22(a), InterDent is exempt from the registration requirement because its employee acted as a purchasing agent for dentists.
The last part of the quote above is an important lesson for writing management service agreements (MSAs). The court obviously ruled that the MSA between InterDent and the PCs was very material. If your ketamine clinic uses an MSO, it would be prudent to ensure that the MSA includes language that reflects the responsibilities of the parties when it comes to ordering ketamine. The operational language of the MSA should include that the MSO “serves[s] as a purchasing agent for [PCs]”.
These are not easy questions. An analysis of the MSO/PC relationship and responsibilities will determine who should hold a DEA registration for ketamine. A thorough review of the MSA, the underlying facts, and the law should provide the answers regarding who should hold a DEA record.
