Good Doc, Bad Doc: Supreme Court Finds Prescriber Knowledge Counts

On June 27, 2022, in one of the last opinions issued during its current term, a majority of the U.S. Supreme Court (six justices) issued a noteworthy opinion on criminal liability related to prescribers of controlled substances. This consolidated case has implications not only for prescribers of controlled substances but also for pharmacists and pharmacies who are subject to a “corresponding responsibility” to only fill prescriptions issued for a legitimate medical purpose pursuant to the Controlled Substances Act (21 U.S.C. § 841) and its implementing regulations (21 C.F.R. § 1301.74)).

The following is a brief summary based on an initial review of the case.  Please stay tuned for further thoughts as we consider the potential broader implications of this important decision.

In Ruan v. United States, No. 20-1410 and Kahn v. United States, No. 21-5261, 597 U.S. ____ (2022), the Supreme Court ruled that the government must prove — beyond a reasonable doubt — that a prescriber knew or intended that a prescription was not lawful in order to subject that prescriber to criminal penalties under the federal Controlled Substances Act (CSA).  Over the years, the government has pursued a number of criminal (and civil) cases against doctors based on the theory that doctors did not act in “good faith” and, equally as important, acted contrary to the responsibilities applicable to both pharmacies and pharmacists based on the government’s argument that both the pharmacy and the prescriber should have objectively known that the prescriptions were not legitimate.

Ruan is a consolidation of two cases involving two doctors (Ruan and Kahn) that were found guilty of issuing prescriptions that violated 21 U.S.C. § 841 because they were not “authorized:” That is, the prescriptions were not issued for a legitimate medical purpose.  The relevant CSA provision provides:

(a)  Unlawful acts

Except as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally—

(1) to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance; or

(2) to create, distribute, or dispense, or possess with intent to distribute or dispense, a counterfeit substance.

21 U.S.C. § 841 (emphasis added).

On appeal, the Eleventh Circuit upheld the conviction of Dr. Ruan, stating that “[w]hether a prescriber is acting in the usual course of professional practice must be evaluated based on an objective standard, not a subjective standard.”  In the case involving Dr. Kahn, the Tenth Circuit upheld his conviction stating that the government must prove the prescriber “either: (1) subjectively knew a prescription was not issued for a legitimate medical purpose: or (2) issued a prescription that was objectively not in the usual course of professional practice.”  The Supreme Court granted certiorari to resolve the Circuit split.

Writing for the majority, Justice Breyer stated that the Court holds that the statutory language “knowing or intentionally” (mens rea) applies to the “except as authorized“ clause  under section 841,  meaning that if the prescriber was otherwise authorized to issue the prescription (e.g., appropriately licensed, etc.) the government must prove beyond a reasonable doubt that the prescriber knowingly or intentionally acted illegally in issuing the prescription.  In other words, the government must prove beyond a reasonable doubt that the prescriber issued a prescription that he or she  knew or intended was not for a legitimate medical purpose.  The Court noted that applying the general scienter provision of section 841 to whether a prescription is in fact authorized “helps separate wrongful from innocent acts.” The Court also stated the strong scienter requirement diminishes the risk of “overdeterrence;” or, more specifically, punishing “close calls” in prescribing.  The Court’s comment here is particularly relevant given the years-long debate related to setting and considering (and potentially criminalizing) the standards or limits for appropriate prescribing of opioid substances (i.e., MMEs) for pain treatment.

The majority also rejected the government’s argument that it could criminally convict a prescriber by merely  showing that the prescriber did not make an “objectively reasonable” effort to meet the appropriate medical standard.  In doing so, the Court stated that to apply a “good faith” or “reasonable” standard would base the extent of criminal liability on a “reasonable doctor” standard, rather than on the “mental state of the doctor himself or herself.”  This ruling has broader implications given that many of the government’s recent criminal and civil penalty cases against pharmacies related to opioid prescribing and dispensing are based on claims that the pharmacies “should have known” that a prescription was not valid based on an “objective standard.”

Three justices concurred in the decision of the Court to remand the case; however, the concurring opinion disagreed with the majority concerning the basis for the decision, arguing that the “authorized exceptions” under the CSA are really “affirmative defenses.” And to that point, the concurring opinion stated that a prescriber could invoke the CSA’s “authorization” defense by showing that the prescriber  acted in subjective good faith when prescribing controlled substances.

More to come.