Operation Bottleneck: DEA versus FDA in a Regulatory War

A record number of drugs are in shortage across the United States. In any particular case, it’s difficult to trace out the exact causes of the shortage but health care is the US’s most highly regulated, socialist industry and shortages are endemic under socialism so the pattern fits. The shortage of Adderall and other ADHD medications is a case in point. Adderall is a Schedule II controlled substance which means that in addition to the FDA and other health agencies the production of Adderall is also regulated, monitored and controlled by the U.S. Drug Enforcement Administration (DEA).

The DEA aims to “combat criminal drug networks that bring harm, violence, overdoses, and poisonings to the United States.” Its homepage displays stories of record drug seizures, pictures of “most wanted” criminal fugitives, and heroic armed agents conducting drug raids. With this culture, do you think the DEA is the right agency to ensure that Americans are also well supplied with legally prescribed amphetamines?

Indeed, there is a large factory in the United States capable of producing 600 million doses of Adderall annually that has been shut down by the DEA for over a year because of trivial paperwork violations. The New York Magazine article on the DEA created shortage has to be read to be believed.

Inside Ascent’s 320,000-square-foot factory in Central Islip, a labyrinth of sterile white hallways connects 105 manufacturing rooms, some of them containing large, intricate machines capable of producing 400,000 tablets per hour. In one of these rooms, Ascent’s founder and CEO — Sudhakar Vidiyala, Meghana’s father — points to a hulking unit that he says is worth $1.5 million. It’s used to produce time-release Concerta tablets with three colored layers, each dispensing the drug’s active ingredient at a different point in the tablet’s journey through the body. “About 25 percent of the generic market would pass through this machine,” he says. “But we didn’t make a single pill in 2023.” (...)

The causes of the DEA’s crackdown appears to be precisely the contradiction in its dueling missions. Ascent also produces opioids and the DEA crackdown was part of what it calls Operation Bottleneck, a series of raids on a variety of companies to demand that they account for every pill produced.

To be sure, the opioid epidemic is a problem but the big, multi-national plants are not responsible for fentanyl on the streets and even in the early years the opioid epidemic was a prescription problem (with some theft from pharmacies) not a factory theft problem (see figure at left). Maybe you think Adderall is overprescribed. Could be but the DEA is supposed to be enforcing laws not making drug policy. The one thing one can say for certain is that Operation Bottleneck has surely been a success in creating shortages of Adderall.

The DEA’s contradictory role in both combating the illegal drug trade and regulating the supply of legal, prescription drugs is highlighted by the fact that at the same as the DEA was raiding and shutting down Ascent, the FDA was pleading with them to increase production!

by Alex Tabarrok, Marginal Revolution | Read more:
Image: Ascent drug vault. Thomas Prior