Controlled Substances/Precursors

A wide variety of chemicals are regulated based on their potential to be abused as illicit drugs ( e.g. , narcotics or psychotropic substances) or as precursors in the production of such drugs.  In the case of precursor chemicals, the applicable regulations have the potential to affect an extremely broad range of companies, because many of the chemicals ( e.g. , acetone, methyl ethyl ketone (“MEK”), sulfuric acid, gamma-butyrolactone (“GBL”), and toluene)  have common legitimate uses in industrial and even consumer products.  The potential consequences of failing to comply with controlled substance or precursor requirements can be significant due to the potential linkage to criminal drug production and trade.   

In the U.S., the relevant federal regulations have been issued by the Drug Enforcement Administration (“DEA”) under the Controlled Substances Act.  In addition, virtually all states have corresponding regulations of their own, which frequently depart significantly from the federal rules ( e.g. , by expanding the scope of covered chemicals or mixtures and/or by imposing additional requirements on covered materials).  Internationally, the framework for regulating controlled substances has been established through three main treaties:  the Single Convention on Narcotic Drugs, the Convention on Psychotropic Substances, and the UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (focused on precursor chemicals).   Laws and regulations implementing these treaties have been issued in virtually all countries around the world.

Beveridge & Diamond counsels numerous clients on these controlled substance/precursor issues, at the U.S. federal and state levels.  We also have substantial experience providing advice and advocacy relating to the global regulatory requirements for controlled substances, building on our in-depth experience with national controlled substances laws and our unique expertise in handling matters in the multilateral chemicals treaties.

Representative matters highlighting our work in this area are provided below:

  • We represent a group of more than 300 research-based and generic pharmaceutical companies on emerging pharmaceutical product take-back laws.  We assist with the preparation of early organizational documents and formal bylaws that address membership criteria and dues, voting structure, board of directors, committees, limitations of liability, and data confidentiality.  We also prepare vendor contracts, product stewardship plans (including protocols addressing applicable DEA and other requirements), and other regulatory submissions.
  • We advised a major high-tech trade association on a strategy to respond to a World Health Organization ("WHO") recommendation to the UN Commission on Narcotic Drugs (“CND”) to list two chemicals that are widely used in industrial applications under Schedule I of the Psychotropic Substances Convention.  If the CND had accepted the WHO recommendation, the impact would have led to draconian controls at the global level on the production and use of those substances, even for legitimate uses.  We led a multi-sectoral outreach strategy to the U.S. Department of State and helped coordinate global outreach in order to ensure that country officials understood the potential impacts of the proposed listing decision.  The CND voted to reject the WHO’s proposal.
  • For a manufacturer and distributor of industrial products containing controlled substance precursors ( i.e. , GBL and MEK), we reviewed the status of the products under U.S. federal law, the laws of all 50 states, international treaties, and the laws in numerous countries worldwide (in some cases working with local counsel). Where necessary, we helped the client obtain regulatory clarifications from the relevant authorities, exemptions from applicable requirements, or required permits.
  • We worked with a waste services company in the development of a nationwide program for collection and disposal of unused pharmaceuticals, helping to ensure that it would be consistent with applicable DEA regulations (as well as regulations governing transport of hazardous materials and disposal of hazardous wastes).
  • We helped a leading chemical manufacturer develop and implement a plan for reporting an apparent regulatory non-compliance involving a controlled substance precursor to DEA and correcting the problem in a way that limited any disruptions to distribution of the relevant products.
  • We reviewed and designed improvements to the purchasing and fulfillment processes of a major raw materials distributor to ensure compliance with California controlled chemical substance requirements. We also prepared materials to educate the company’s suppliers regarding the California requirements.
  • We assisted a major petrochemical company in evaluating the applicable U.S. federal and state requirements for handling controlled substances and precursors at its laboratories around the country, and in developing strategies for ensuring compliance (including contracting with a third party for certain compliance obligations).
  • We advised an oil and gas services company on state requirements applicable to precursor chemicals and laboratory apparatus.
  • We prepared self-disclosures to the California Department of Justice Controlled Chemical Substances Program regarding errors in controlled chemical reporting, including descriptions of actions taken to address reporting errors and improve overall processes.
  • We helped a client determine the requirements applicable to exports of a precursor chemical intended to be used as a solvent in connection with its other products.
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