Controlling Opinions: The Outlook for Controlled Substances in 2025

On this episode of Ropes & Gray’s podcast series Controlling Opinions, life sciences regulatory and compliance partner Josh Oyster and counsel Beth Weinman are joined by health care partner Brett Friedman and litigation and enforcement partner Andrew O’Connor to discuss what’s to come in 2025 under the new Trump administration on key issues relating to controlled substances. The discussion covers:

• The DEA’s potential rescheduling of cannabis and the ongoing administrative hearing process.
• Updates on telemedicine flexibilities for prescribing controlled substances, including new rules and proposed regulations.
• Latest enforcement developments from the DOJ related to controlled substance prescribing via telemedicine, including notable cases and implications for the future.

Tune in for an insightful conversation on these critical topics and stay informed about the latest legal and regulatory changes in the life sciences and health care industries.

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Transcript:

At a glance: Click the links below to advance directly to the corresponding sections of the transcript:

• [1:35] DEA Administrative Hearing for Cannabis Rescheduling
• [9:15] Telemedicine Flexibilities for Controlled Substance Prescriptions
• [25:30] Latest Enforcement Developments Related to Controlled Substance via Telemedicine—Cerebral Settlement

Josh Oyster: Hi, I’m Josh Oyster, a partner in the life sciences regulatory and compliance practice in Ropes & Gray’s Washington, D.C. office. I’m excited to be with you today for this episode of our podcast series Controlling Opinions, which is focused on current trends and developments related to controlled substances that affect the health care and life sciences industries. I’m joined today by Beth Weinman, a Washington, D.C.-based counsel in our life sciences regulatory and compliance practice; Brett Friedman, a New York-based partner in our health care group; and Andrew O’Connor, a Boston-based partner in our litigation and enforcement group and co-chair of our life sciences and health care industry group.

Today, we’ll be looking at what’s to come in 2025 under the new presidential administration on a number of hot-button issues relating to controlled substances. We’ll start with the DEA’s potential rescheduling of cannabis, check in on the regulatory status of prescribing controlled substances via telemedicine, and finally, discuss the latest enforcement developments from DOJ related to controlled substance prescribing. Let’s get started. Welcome Beth, Brett, and Andrew.

Beth, I’ll start with you first on the topic of cannabis rescheduling. This is an issue that has attracted the attention of huge sects of the health care and life sciences industries, as well as the mainstream media. Our Ropes & Gray team covered DOJ’s notice last year proposing to reschedule cannabis from schedule I to schedule III under the Federal Controlled Substances Act (“CSA”). But what’s happened since then? Can you bring our listeners up to date?

[1:35] DEA Administrative Hearing for Cannabis Rescheduling

Beth Weinman: Sure, happy to. As you noted, in May 2024, the Department of Justice announced its intention to reschedule cannabis from schedule I to schedule III on the CSA schedules that classify drugs based on their acceptable medical use and abuse or dependency potential. That rescheduling is a down classification from schedule I, where drugs have no accepted medical uses and are considered highly addictive, to schedule III, a schedule for drugs that do have accepted medical uses and fewer controls. This announcement came through a notice of proposed rulemaking (“NPRM”) since rescheduling is subject to formal rulemaking procedures under the Administrative Procedure Act (“APA”), and that means that in addition to the public comment period that’s typical for rulemaking by federal agencies, there also has to be an opportunity for a hearing before an administrative law judge (“ALJ”). Then, the administrative law judge will make a recommendation to the DEA administrator who issues a final decision.

The DEA received numerous requests for an administrative hearing and more than 42,000 public comments on the proposed rule. In late August of last year, DEA agreed to hold the hearing and they sought notice from persons who wanted to participate. In November, the assigned administrative law judge ruled on the list of “designated participants” for the hearing, and that ruling has kicked off quite a bit of back-and-forth, sniping, legal process, and frankly, significant delay because the parties that were tapped as designated participants were largely opponents of cannabis rescheduling, and that did not sit well with the few pro-rescheduling designated participants. Some of those pro-rescheduling designated participants went so far as to ask the ALJ to disqualify and remove the DEA administrator. As part of its motion before the ALJ, the pro-rescheduling parties alleged that certain DEA officials had engaged in improper ex parte communications with an organization that was against the rescheduling proposal. The ALJ denied that motion in late November, but the back-and-forth, before any evidentiary hearing had even started, is illustrative of the heated arguments already ongoing in this proceeding.

Josh Oyster: That’s fascinating, Beth. So, when do we think the formal hearing is actually going to kick off?

Beth Weinman: Short answer is we really don’t know—the schedule that had been in place was recently thrown out, and, of course, we don’t really know anything about what’s likely to happen in government these days. But to trace the background, on December 2, a preliminary hearing was held, and the ALJ set January 21 as the date for the beginning of the hearing on the merits. However, the start of that hearing was postponed in mid-January after further sniping between pro-rescheduling participants and the DEA. The pro-rescheduling parties had asked the ALJ to reconsider his earlier denial of the motion regarding the DEA’s alleged ex parte communications. The ALJ denied the motion to reconsider because the ALJ thought that “the outcome of the proceedings will not be adversely affected by the facts alleged.” The ALJ further stated that “[he] can no more remove or re-designate the Administrator than [he] can hold parties in contempt and fine them.” Despite the denial, the ALJ elected to allow the parties to pursue an interlocutory appeal. The absurdity of the situation is that the interlocutory appeal goes to the DEA administrator, meaning that the DEA leadership would have full control over the outcome of that appeal. So, pro-rescheduling parties are attempting to have the DEA administrator removed from a DEA administrative hearing and, for one reason or another, thought it was prudent to have this issue appealed to that very same DEA leadership rather than have the hearing proceed as scheduled.

The ALJ’s decision allowing for the appeal calls into question the logic of the approach taken by the pro-rescheduling parties. The ALJ also commented, “Notwithstanding the pleas of the Designated Participants that they are anxious for action on the proposed rescheduling of marijuana, the Movants are eager to trade a timely disposition and recommended decision for the dubious advantage of piling on more DPs.” The ALJ also advised that “sometimes litigants and their representatives should be mindful of what they wish for,” given that the appeal they requested would take the matter back to the control of DEA leadership and given that a plain language reading of the term “interested persons” under the hearing regulations could actually result in all pro-rescheduling parties being excluded from the administrative hearing, so certainly not an outcome that they would want.

Josh Oyster: That’s quite the saga already, especially when the real merits of the hearing haven’t even begun. Assuming that does eventually happen, what is the hearing process like?

Beth Weinman: When the hearing eventually happens (if it happens, which is likely to be several months down the road, if at all), that will be a time for the designated participants to present witness testimony and other evidence. The original hearing schedule that had been proposed contemplated that proceedings would run for six weeks with three days of hearings each week. Then, based on what was heard during the hearing, the ALJ would make a recommendation to the DEA, which the DEA could then ultimately choose to accept or reject.

Josh Oyster: Thanks, Beth. The other aspect of this that we haven’t touched on yet is the potential impact of new leadership in the Trump administration. The proposed rule issued last year, while technically issued by both DOJ and DEA, was signed only by the attorney general and not by the DEA administrator, as these things usually are, and the proposed rule did not contain any express DEA endorsement of rescheduling. Proponents of cannabis rescheduling have been hopeful that they might benefit from a more supportive DEA administrator under President Trump. However, that may not be the case. While President Trump has not announced his nominee to be the DEA administrator over the long term, the administration announced on January 21 that Derek Maltz, a former DEA special agent, would serve as Acting DEA Administrator for the time being. Maltz expressed opposition to the cannabis rescheduling process last year, noting via social media that, “The Justice Department hijacked the rescheduling process, placing politics above public safety.”

Additionally, while U.S. Attorney General Pam Bondi hasn’t been very specific about her thoughts on rescheduling, in her past role she supported tough-on-crime policies and also opposed a Florida constitutional amendment related to cannabis legalization. Hence, it’s not clear how supportive of rescheduling she will be at the helm of DOJ. All of this is to say that the process of rescheduling cannabis from schedule I to schedule III, despite a lot of interest from a lot of people, is unlikely to be completed any time soon, if it is completed at all. But there will undoubtedly be a lot of action at DEA that’s worth watching over the course of 2025.

Switching gears, let’s pivot to discussing telemedicine flexibilities for controlled substance prescriptions and how the new administration may manage what’s next on that issue. Brett, thanks for joining us. At the end of the Biden administration, there were some new updates from DEA that dropped—we’ve spoken about this issue before. Can you give us a quick status update about these newly proposed and finalized rules?

[9:15] Telemedicine Flexibilities for Controlled Substance Prescriptions

Brett Friedman: For sure, Josh. It’s good to be back here on the podcast as we track the ongoing saga of these telehealth rules that arise under something called the Ryan Haight Act. As some very brief background, these are flexibilities that were initially afforded during the COVID-19 pandemic that would allow for the prescription of controlled substances without a prior in-person examination—that was the big gatekeeping element here that limited controlled substances to be prescribed over telemedicine channels. During the pandemic, through a series of waivers, which were recently extended through temporary rules, first to November 2023 and then to December 2024, allowed prescribers—we’ll talk about who those are—to prescribe schedules II-V controlled substances via telemedicine without having this initial in-person visit. That’s critical flexibility that’s now been around for a number of years that is really helping a lot of our clients and companies provide these necessary medications without having this physical infrastructure or this physical in-person examination that was the historical requirement.

By way of an update, just recently, in November 2024, the DEA, along with HHS, issued a third extension of these telemedicine flexibilities for prescribing controlled substances for another year, so now, we’re good through December 31, 2025. This went into effect at the first of the year, but just as the Biden administration was about to leave office, on January 16, the DEA announced two new final rules as well as one proposed rule that will really dictate the future of how controlled substances are prescribed via telehealth. These three rulemakings are really important because just at the outset, under something called the Congressional Review Act (“CRA”), this allows Congress to review and potentially hold their implementation in advance—anything since August is subject to review—so we’ll see if these stick under the new presidential administration. But if they do, it’s important to know what they cover. Let me talk about first, the two final rules because they’re really narrow in nature and discrete, so relatively easy to digest. Then, the proposed rule, which is more expansive and really dictates how telemedicine and controlled substances could work long term, I’ll discuss next.

The first final rule, which is called the Expansion of Buprenorphine Treatment via Telemedicine Encounter, is intended to facilitate access to buprenorphine, the critical medicine used as part of medication-assisted treatment (“MAT”) for people with substance use disorder and allows for the prescription in remote locations. Under the final rule, after a prescriber reviews a patient’s prescription drug monitoring program data, which we’ll talk about in a bit, for the state in which the patient is located, that prescriber may issue a six-month supply of buprenorphine through audio-only means—the lowest form of telehealth, just a phone call. Then, additional prescriptions of controlled substances can be issued via other forms of telemedicine authorized under the Controlled Substances Act or after an in-person medical evaluation is conducted—the traditional Ryan Haight rule. This final rule does not affect the prescriber-patient relationships where an in-person medical evaluation had previously occurred. So, this is a very narrow rule and really speaks to only buprenorphine, which has been really widespread accepted as something that is necessary for substance use disorder (“SUD”) treatment and can be prescribed through audio-only, the lowest means of telehealth.

The second final rule, also similarly narrow, which is called the Continuity of Care via Telemedicine for Veterans Affairs Patients—even the name shows that it’s a niche rule that is looking to address controlled substances for VA practitioners. Here, VA practitioners are permitted to prescribe controlled substances to VA patients via telemedicine if another VA practitioner has, at any time, previously conducted an in-person medical evaluation of the VA patient, so it’s building on VA as a whole. If there’s an in-person examination, you can then prescribe via telehealth.

Josh Oyster: Thanks, Brett. Certainly, a lot to digest there. What about the proposed rule that DEA announced? That one will have a much broader impact if it’s finalized, correct?

Brett Friedman: Completely. If this rule’s finalized, called Special Registrations for Telemedicine and Limited State Telemedicine Registration, it would really reorient how this issue is confronted at the federal level for the foreseeable future. The proposed rule would allow practitioners with a new special registration process issued by the DEA to prescribe controlled substances in schedules III-V, and in some instances, II-V, via telemedicine. Individual practitioners that receive this special DEA registration would still need to obtain state DEA registrations where they prescribe or dispense controlled substances, but the proposed rule would streamline and create a limited “State Telemedicine Registration” for this purpose that would theoretically be less expensive to the traditional DEA registration for an individual practitioner. If finalized, the special registration process created by this proposed rule would provide a way for practitioners to prescribe controlled substances through telemedicine when the current telemedicine flexibilities expire on December 31, 2025.

Josh Oyster: What are the categories of special registrations that the DEA is proposing that you were alluding to a moment ago? What would they enable practitioners and prescribers to do?

Brett Friedman: It’s a great question. It’s a 58-page rule—it’s very dense and covers a lot of categories and sub-categories. But for the purposes of this podcast, let me give a very brief overview of these registration categories, set the stage, and hopefully generate some interest on what these could be if this rule ultimately becomes final.

• The first category is what the DEA simply calls Telemedicine Prescribing Registration. This category would authorize clinicians who can prescribe controlled substances—physicians or nurse practitioners (“NPs”)—to prescribe schedules III -V controlled substances. So, very simply, you get a DEA telemedicine prescribing registration, you’re an authorized prescriber and you can do schedules III-V controlled substances via telemedicine in perpetuity.
• The second category is what the DEA terms the Advanced Telemedicine Prescribing Registration. This category would authorize certain specialized clinical providers—not just your basic physicians and NPs, but psychiatrists, hospice care physicians, and palliative care physicians—to prescribe controlled substances in schedules II-V. Just a quick comparison: first category, general clinical prescribers schedules III-V; this special advanced category are specialized clinical providers and schedules II-V.
• Then, you have a third special registration category, which is a Platform Registration. This category would authorize covered telemedicine online platforms to dispense schedules II-V controlled substances through a clinician practitioner prescribing controlled substances under the first two categories. This category, to me, is in many ways, the most significant and interesting, because it’s the first time when you’re not looking to the prescriber but to the platform. Think of an app or a digital directory that connects patients with the medical providers for the purposes of prescribing controlled substances in connection with drug treatment. As patients with substance use disorder increasingly rely on these platforms, this registration category could be an additional layer of regulation, but also, in some ways, provides a DEA endorsement, if you will, of these platforms doing what they say they could do without relying on individual registrations. So, really fascinating thinking about it from a platform rather than an individual prescriber standpoint.
• Finally, as I mentioned a few minutes ago, in addition to obtaining one of the special registrations from DEA, the individual practitioners and platform practitioners would need to obtain new DEA state telemedicine registrations in each state in which they intend to prescribe or dispense controlled substances via telemedicine. (Note that the special “State Telemedicine Registration” terminology is a bit of a misnomer because these would be DEA-issued registrations that would be separate from and in addition to any applicable state-issued registrations that would be required.) Just stepping back, there are many layers of registration depending on which DEA category you’re falling into: a platform category, a DEA state registration, and then, any of the individual states in which the prescriber is currently seeking registration.

Josh Oyster: Thanks, Brett, for walking us through that. Sounds like a maze of registrations to navigate, at the individual level, the platform level, and federal and state. It’ll certainly be a lot for companies doing telemedicine to be thinking through. What are some of the other highlights of the proposed rule in terms of the requirements or conditions for prescribing under one of these special registrations?

Brett Friedman: I think there are just two more critical points to highlight as companies or individuals use the proposed rule to think about what the future registration of prescribing controlled substances via telemedicine looks like. These two things are:

1. what limitations would exist on prescribing schedule II controlled substances, in particular, and
2. (this one I think is really important) the onerous requirements for checking state prescription drug monitoring programs (“PDMP”) data in connection with providing appropriate checks on when you’re issuing the controlled substances prescription.

On schedule II prescribing, here, even if a practitioner gets that Advanced Telemedicine Prescribing—that second category that expands the specialized physician types to do schedules II-V—such schedule II prescriptions would only be permitted when the practitioner’s physically located in the same state as the patient at the time of the telemedicine encounter. This is different than typical telemedicine rules where, so long as the prescribing provider is licensed in the patient’s state, the originating site of counsel, now, regardless of the licensure, you can be via telemedicine but physically located in the same state—that’s a very unique element of any telemedicine rules. Additionally, the proportion of schedule II controlled substances prescribed via telemedicine averaged monthly would have to be limited to less than 50% of the practitioner’s total schedule II prescriptions, whether those occur over telemedicine or non-telemedicine channels. DEA said it intends to impose one or both of these requirements depending on the feedback. So, just thinking about how you would monitor that 50% test for telemedicine on telemedicine prescribing of schedule II prescriptions would be a nightmare, I think, of implementation, but something that the DEA was considering.

The second issue around PDMP, this one, I think, also would be incredibly burdensome and impractical for practitioners or platforms to operationalize. Very quick background: as most people listening probably know, states have created these PDMPs, which are electronic databases that track controlled substances prescriptions. PDMP information can help clinicians identify patients who may be at risk for overdose or who maybe should not be prescribed additional controlled substances—a really good check-in, looking at the totality of an individual patient’s prescriptions. Given the importance of PDMP data, DEA proposes that for the first three years following the effective day of the final rule—should this proposal become a final rule—a clinician special registrant would be required to conduct a PDMP check of the patient’s controlled substances prescription data in multiple states:

1. the state or territory where the patient is located,
2. the state or territory where the clinician is located if that’s different, and
3. any state or territory that has PDMP reciprocity with the state or territory corresponding to one of the first two categories.

After three years, DEA would require the special registrant to check the PDMPs of all 50 states and any district or territory that maintains its own PDMP. A nationwide PDMP check would be basically impossible today because there’s no nationwide PDMP database or really PDMP database interoperability. The DEA’s discussion of the proposed rule acknowledges that this isn’t the current reality, but really something they’d like to see, and they want to push through these efforts on interoperability as part of issuance of the final rule. So, a really good future business idea for someone to think about PDMP interoperability, which doesn’t exist and would be necessary for widespread permanent telemedicine prescribing of schedules II-V controlled substances.

Josh Oyster: Much like the cannabis issues we were talking about earlier, it remains to be seen what approach the new administration is going to take. You also mentioned the Congressional Review Act and the potential that Congress could take action to undo some of these rulemakings from late in the Biden administration. Do you have a sense about the new administration’s approach to telemedicine policies? Do we think the administration will be more amenable than what the DEA just proposed?

Brett Friedman: Like everything else, it’s very hard to predict where the Trump administration will land with these flexibilities. Although one note, it’s good to remember that a lot of these original telemedicine flexibilities arose under the first Trump administration as part of their comprehensive set of COVID-19 actions and flexibilities. Even though we don’t know who’s going to be leading the DEA over the long term, this is likely something the new administration will want to consider pretty early on in the transition, one, because the current rules will expire on December 31, 2025, so they have to do something, and two, this is a really important way for people to access services when they’re encountering substance use disorder or other psychiatric conditions that require the prescription of these controlled substances. Even if the DEA decides to move forward with the finalization of the proposed rule, as we mentioned for some of the challenges earlier, implementation can’t happen overnight, even before the current flexibilities expire at the end of 2025. This means that we’re likely going to see some action in the next six to eight months that will give a firmer indication of where the Trump administration comes out with a slight expectation that they will continue to push towards telemedicine flexibilities and access which arose under the first Trump administration.

Josh Oyster: Thank you, Brett. We’ll continue to watch for developments in this area in 2025.

Last on today’s episode, but certainly not least, I’ll turn to you, Andrew, as we touch on some of the latest enforcement developments related to controlled substance prescribing via telemedicine. As Brett was talking about, the policymaking that DEA has been working on, DOJ has not been quiet on the enforcement side. We’ve talked a little bit about this in a prior episode, but there continues to be significant DOJ enforcement involving telehealth companies and controlled substances. Can you share the latest with our listeners?

[25:30] Latest Enforcement Developments Related to Controlled Substance via Telemedicine—Cerebral Settlement

Andrew O’Connor: Sure, Josh. Towards the end of 2024, the DOJ entered a non-prosecution agreement (“NPA”) with Cerebral Inc., which is an online telehealth company, and they had a multi-million dollar fine in connection with the NPA around allegations that there was improper prescribing of ADHD medications over the telehealth platform. Specifically, the government had alleged that the defendant had internal plans to increase the amount of ADHD prescriptions to around 100% of patients, and there was also some discussion about whether providers would be rewarded for high prescribing and maybe even disciplined for not hitting certain metrics. In addition to the prescribing issues, the defendant also allegedly had shortcomings in their controls against diversion under the relevant DEA regulations, including, for example, duplicate patient accounts, which would allow one patient potentially to get prescriptions from multiple providers within the same company, even though that patient was being prescribed the same drug elsewhere and perhaps even had been flagged for potential misuse of ADHD drugs. Now, under the terms of the NPA, the company’s going to pay around $3 million and potentially pay an additional fine that was deferred due to ability to pay. Perhaps more relevant or equally relevant, the NPA requires substantial remedial measures, including a voluntary decision to stop prescribing controlled substances altogether.

Josh Oyster: Thanks for sharing the details of that Cerebral case, Andrew. We’ll continue to monitor that one. In a prior episode, we discussed a similar scheme involving executives from a company called Done Global, another digital health company operating in this area. Have there been any updates on that front?

Andrew O’Connor: Yes, there has been a bit of movement there. Just as a refresher, last June, the government arrested the founder/CEO and the clinical president of that company as part of the DOJ’s first-ever criminal drug distribution prosecutions that relate to a digital health company involving telemedicine and the prescriptions of controlled substances. The trial against those two defendants is currently scheduled to begin in July 2025. But the government is also prosecuting a number of other individuals in connection with these issues, including the nurse practitioner and others who allegedly were involved in prescribing Adderall and other controlled substances, and several of those individuals have already pleaded guilty.

Josh Oyster: Very interesting. We’ll continue to monitor that matter as well. What does the DOJ enforcement that we saw initiated last year mean in light of the fact that we now have a new presidential administration and new DOJ and DEA leadership?

Andrew O’Connor: I think we should expect to continue to see DOJ and DEA focus on telemedicine platforms and controlled substances prescribing. The enforcement examples we’re just seeing should really prompt those kinds of platforms to take a look in the mirror, if they haven’t already, and ensure that they have appropriate controls in place. Historically, particularly in the opioid space, this issue has been fairly bipartisan—both Republicans and Democrats have been active in the enforcement space. President Trump’s Attorney General Pam Bondi, when she was attorney general in Florida, was very active on anti-diversion issues and fighting the opioid epidemic. So, first, I don’t expect to see much of a dip in enforcement at the federal level. But just as importantly, much of the most impactful enforcement in the opioid space has come at the state level—state AGs on both sides of the aisle. When you think about the multi-billion-dollar resolutions that have been reached over the last several years, those have been driven in large part by state AGs, so regardless of whether DOJ or DEA enforcement increases, decreases, or holds steady, I would expect to see continued focus at the state level on inappropriate prescribing.

Josh Oyster: Thanks so much, Andrew, and thanks, Beth and Brett. That’s all the time we have for today, and I want to thank our listeners for tuning in. We look forward to diving into more of these issues and sharing updates as the year progresses. If you have any feedback on today’s episode or suggestions for future episodes, please don’t hesitate to contact one of us. You can find our contact info and more information about our practices on www.ropesgray.com. You can listen to Controlling Opinions and other RopesTalk podcasts through our ropesgray.com website, or you can subscribe wherever you listen to podcasts, including on Apple and Spotify. Thanks again for listening.